March 13, 2000

Nippon Paper decide to reorganize Sales Organization to become a real "Customer Focused Company". New Sales Organization starts from April 1, 2000.

Nippon Paper Industries Co., Ltd.

We set up Business Reengineering Promotion Office in October 1998 and it has been reviewing our business process and company organization for the purpose of making the company a real "Customer Focused Company". As the first step of this reform, the senior management has decided to implement the organizational reform and this new sales organization will be formed on April 1, 2000.
We define "Customer Focused Company" as the company where not only sales force but every member of the company continuously pursues customers' best interest.
1. Reorganization: from product-supply focused structure to customer focused one
•For the purpose of developing closer relationship with customers which enables us to identify customers' needs and deliver superior products and services timely, we will introduce customer oriented sales organizational structure.
•Our sales organization consists of three divisions, namely Newsprint Sales Division, Paper Sales Division and Communication Paper Sales Division. Each division is currently divided into several departments according to products they sell, but under the new organization , Paper Sales Division will consist of customer-based departments. The current Paper Sales Div. has Fine Paper Dept., Coated Paper Dept. and so on. The new one will consist of Publisher Dept., Wholesalers Dept. and Special Customers Dept. etc. Another example is that Newsprint Sales Div. will be called Newspaper Div. and it will sell newspaper publishers not only newsprint but also printing and writing paper.
2. Newly established Marketing Division
•We will establish Marketing Division. It is a cross-divisional organization that will formulate marketing strategies and provide three sales divisions with support services in order to help them execute those strategies.
•Marketing Division will consist of Marketing Planning Dept., Operational Planning Dept., Logistics Dept. and Quality Assurance Dept.
•Marketing Planning Dept. will formulate marketing strategies including product development plan and also coordinate sales, production and product development organizations to implement those strategies. It will also promote more customer focused sales activities by introducing information technologies and management system for customer satisfaction etc.
•Operational Planning Dept. will centrally control production and delivery planning to achieve the optimal operation of the company as a whole.
•Quality Assurance Dept., which used to belong to Technical and Engineering Div. will become a part of Marketing Div. and work more closely with sales force to provide better technical services to customers.
As we mentioned above, this reorganization is the first step of our business reform. We have just formed the project team to implement other recommendations made by Business Reengineering Promotion Office on the basis of the concept of Supply Chain Management. This team will reform business process including order taking, production planning, logistic planning and delivery service by introducing a new computer information system in to improve customer satisfaction as well as to realize optimal corporate operation.
To become a real "Customer Focused Company", we will also inspire customer oriented shared value to every single member of the company. We further continuously try to cope with rapidly changing business environment proactively by using the most advanced information-technology related business tools including e-commerce trading.