December 3, 2002

Announcement of Plans to Build a Scrap Wood Fueled Electric Generator
- Annual reduction of 100,000 tons of fossil fuel emissions -

Nippon Paper Industries Co., Ltd.

Nippon Paper Industries Co., Ltd., Japan's leading paper and pulp manufacturing company and core member of Nippon Unipac Holding, is proud to announce plans for the construction of a fluidized bed boiler and a 15,000 kilowatt turbine at the Nakoso Mill (Iwaki City, Fukushima Prefecture) to be fueled primarily by discarded wood scraps. With a capital investment of approximately 3.8 billion yen, construction is set to commence April 2003, and completion is scheduled for August 2004.
Presently, 75% of illegally abandoned industrial waste is discarded construction material, presenting a serious environmental problem. The newly constructed boiler will use approximately 90,000 tons of this discarded scrap wood each year. The conversion from oil to scrap wood as the main fuel source yields a considerable cost benefit, while also meeting the emerging needs of the community.
The electricity and steam used in the manufacturing process at the Nakoso Mill are currently supplied by privately owned oil-fueled boilers and diesel generators. As the new boiler commences operations, 34,000 kilolitres of the previously used oil will be held each year strictly as backup fuel, leading to a 98% reduction in oil usage. Consequently, we expect a yearly reduction of 100,000 tons of fossil fuel related carbon dioxide emissions.
Not only will the turbine directly generate electricity, but through a process of co-generation, it will also supply steam for use in the mill. This results in an actual generator efficiency rate of 66% - an amazing figure (generally, the maximum efficiency rate of generators is regarded to be 40%). Yet another environmental feature of the boiler is the inclusion of a bag filter to remove any dust present in the emissions, and a wet desulfurization system to remove any sulfur oxides. The included features provide a state-of -the art facility for meeting environmental standards.
The current project has been sanctioned by the Ministry of Economy, Trade and Industry as a 2002 Biomass power generation activity. With the construction of this new boiler and our ongoing commitment to improving DIP facilities, Nippon Paper Industries is making significant strides in finding solutions to the problems of waste and waste paper management.