May 18, 2000

Electronic Commerce between Paper and Paperboard Product Manufacturers

Japan Pulp and Paper Co., Ltd.
Kokusai Pulp and Paper Co., Ltd.
Oji Paper Co., Ltd.
Nippon Paper Industries Co., Ltd.

Japan Pulp and Paper Co., Ltd. (Chuo-ku, Tokyo; President: Kyoichiro Hirato), Kokusai Pulp and Paper Co., Ltd. (Chuo-ku, Tokyo; President: AkioTakanashi), Oji Paper Co., Ltd. (Chuo-ku, Tokyo; President: Masahiko Ohkuni), and Nippon Paper Industries Co., Ltd. (Chiyoda-ku, Tokyo; President: Masao Kobayashi) have agreed to jointly establish a new B2B electronic commerce business for paper and paperboard products. The new company will use the Internet to conduct electronic commerce in Japan and eventually overseas, particularly other Asian nations.
The four companies have already extensively studied the implementation of B2B electronic commerce for paper and paperboard products, but they finally agreed to form this joint enterprise in order to increase the efficiency of future paper and paperboard commerce and globalize their operations. This new company formed through joint investment will be the first full-fledged B2B electronic commerce business in the Japanese paper pulp industry. In addition, the four companies will each establish a company-wide support system for promoting electronic commerce at the new company.
1. Overview of New Company
Company name :
Established : July, 2000
Start of operations : Planned for April 2001
Capital : 300 million yen
Investment : Japan Pulp and Paper Co., Ltd. 40%
    Kokusai Pulp and Paper Co., Ltd. 40%
    Oji Paper Co., Ltd. 10%
    Nippon Paper Industries Co., Ltd. 10%
2. New Company's Objectives
A number of electronic marketplaces for paper and paperboard have already been build overseas, but there has never been a true electronic marketplace for paper and paperboard in Japan. The buying and selling of paper and paperboard as a raw material demands careful attention to the distribution stage including stable supply and quality control as well as multiple product, small-lot delivery. Responding to the coming globalization of paper and paperboard commerce requires improved distribution efficiency that facilitates user convenience.
The new company will increase distribution efficiency, from ordering to manufacturing and sales, by building a speedy ordering system over the Internet. It will also stimulate the market through business expansion that prioritizes individual user convenience above all else and contribute to further advancing the paper pulp industry.
3. New Company's Business Content
The new company will build a brand new marketplace for conducting full-fledged paper and paperboard commerce over the Internet as well as manage and operate a variety of commerce-related functions including distribution, account settlement, and credit. In addition, Japan Pulp and Paper and Kokusai Pulp and Paper will support the management and operation of the new company.
The new company will contract Oji Paper and Nippon Paper Industries to manufacture Net Exclusive Brand Products that will initially be sold only over the Internet. These products will be the initial target of electronic commerce once the company starts operating. Net Exclusive Brand Products will initially consist of multiple brands of printing paper, and the new company will provide products after selecting the best manufacturers and mills according to the user's region and desired delivery date.
The new company will rationalize distribution and drastically curtail the time and cost of order reception, manufacturing, stocking, sales, and transport by selling Net Exclusive Brand Products only over the Internet. Through the buying and selling of Net Exclusive Brand Products over the Internet, the new company will develop new forms of paper and paperboard commerce and create new markets for paper and paperboard that benefit the user in every way. Along with expanding commerce, the new company will also increase the number of products suppliers and manufacturers, including those overseas, thereby providing a product supply system that is even more advantageous to users.
The new company's Web site will be accessible to anyone, but transactions will be limited to registered users. It will provide an easy-to-use environment that can be customized for each user. The Web site will also offer substantial paper pulp-related information including industry and new product news, making it a highly valuable destination for users.
Initially, we will build an Internet marketplace focused on domestic wholesalers and major users, but we plan to gradually increase the number of participating users. We also want to open up new markets by spreading Net Exclusive Brand Products over the Internet and obtaining brand recognition from end users consisting of companies outside of the paper industry. Finally, we have our sights set on global expansion as an international brand in overseas markets.
4. Scale of Operations
In the first year, we expect sales of about 10 billion yen, primarily in Japan. After five years, we are aiming for 50 billing yen in sales, including overseas expansion.