June 18, 2001

Nippon Paper Industries and Japan Pulp and Paper Start Paperboard Production Business in China
- With equity participation in Zhejiang Jingxing Paper Group, the two companies bolster papermaking operations in China -

Nippon Paper Industries Co., Ltd.

June 18, 2001 - Nippon Paper Industries Co., Ltd. (Nippon Unipac Holding Group) and Japan Pulp and Paper Co., Ltd. jointly announced today a collaborative venture in China with Shanghai Matsuoka Co., Ltd. to start production of linerboard and containerboard at Zhejiang Jingxing Paper Group Co., Ltd. The new production collaboration was formed in response to an increasingly growing demand for paperboard in Zhejiang province.
 
Nippon Paper Industries and Japan Pulp and Paper will each purchase 5.5 percent of Zhejiang Jingxing Paper Group, while Shanghai Matsuoka will acquire 41 percent. Together, the three companies will become the majority shareholders. Zhejiang Jingxing Paper Group plans to list its shares in the Shanghai Stock Exchange in the near future.
 
Based in Pinghu city in Zhejiang province, some 100 kilometers southwest of Shanghai, Zhejiang Jingxing Paper Group will install a 200-thousand-ton linerboard machine by the end of this year to accelerate its production. Annual production is expected to rise from the present 120 thousand tons of linerboard and corrugated medium material to 1 million tons by the year 2005.
 
In the meantime, Nippon Paper Industries, in cooperation with its subsidiary, Japan Paperboard Industries Co., Ltd., will provide technical assistance to Zhejiang Jingxing Paper Group. Japan Pulp and Paper will supply to its Chinese partner pulp, materials, and parts for linerboard products.
 
Nippon Paper Industries and Japan Pulp and Paper have been operating another venture in China as well. In 1995, the two companies set up in Shandong province a joint venture company, Shouguang Liben Paper Making Co., Ltd., which has been producing and marketing carbon-less base papers. The new venture in Zhejiang province represents the bolstered business of paperboard production in China. It also plays an important role in future expansion in new paper products, involving specialty papers and business papers, while building a stronger relationship with Shanghai Matsuoka, whose printing business for airline tickets and checkbooks has an unparalleled competitive edge in China. For Shanghai Matsuoka, which has expanded its printing business and clothing export to Japan, the equity participation in Zhejiang Jingxing Paper Group marks the further diversification of its businesses into paper production. Shanghai Matsuoka had net sales of 1.4 billion yuan RMB (Renminbi) in 2000, and its shares have been listed in the Shanghai Stock Exchange since January 1999.