March 24, 2003

Strengthening of Corrugated Board Business

Japan Paperboard Industries Co., Ltd.

Nippon Unipac Holding is proceeding with restructuring by business area within the Group, with the aim of strengthening each of the Group's business areas and increasing operating efficiency.
In October last year the Group spun off and restructured three diversifying divisions (the liquid packaging carton business, log & lumber business and chemical business) of Nippon Paper Industries Co., Ltd., Japan's leading paper and pulp manufacturing company and a core member of the Nippon Unipac Holding Group. In addition, as already announced, with effect from April 1 this year the Group is centralizing its paper business, which is the Group's core business, by merging the three companies Nippon Paper Industries, Daishowa Paper Manufacturing (excluding paperboard business) and Nippon Paper Sales and unifying its business involving container board and other grades of paperboard by creating Nippon Daishowa Paperboard Industries Co., Ltd. in order to integrate production and sales systems.
Moreover, in our corrugated board business, which we have been reviewing in conjunction with the strengthening of our containerboard business, we have decided to restructure and streamline corrugated board production subsidiaries of Japan Paperboard Industries Co., Ltd. as set out below, and to strengthen business through a tie-up with a leading corrugated board manufacturer.
We are confident that through these various measures, despite the difficult business environment that surrounds the corrugated board business, we will be able to stabilize our business at an early date and provide all our customers with more meticulous services than in the past.
Japan Paperboard Industries is committed to meeting the expectations of all the stockholders of Nippon Unipac Holding through the prompt implementation of strengthening measures in both its "containerboard and other paperboard business" and "corrugated board business" and through its contribution to improving the profitability of the Group as a whole.
We believe that our decisions are in the interest of all stakeholders.
1. Restructuring of corrugated board producing subsidiaries
(1) Merger of eight corrugated board producing companies
With the aim of cost reductions through the streamlining of production and sales systems and the centralization of business resources, we will merge eight corrugated board producing companies into one company and transfer the corrugated board division of Japan Paperboard Industries Co., Ltd. to the merged company.
Surviving Company:KG Pack Corp. (Company name to be changed to "Nichiita Package Corrugated Case Corporation")
Location of Head Office:Tokyo
President:Shigeru Kagaya (Currently Managing Director of Japan Paperboard Industries Co., Ltd.)
Date of Merger:October 1, 2003
Capital to be issued, merger ratio, directors and organization are to be decided.
Profile of New Company:Annual Sales ~ Approx. 30 billion yen,
Employees ~ 1,020 (Including part-time workers)
[Attachment] "Profile of Eight Corrugated Board Companies"
(2) Restructuring of production lines of Corrugated Board Business
We will streamline neighboring production bases in each region with the aim of improving the operating rate and raising productivity through rationalization of the workforce.
Implementation:Specific measures are to be determined before the new organization starts. (To be implemented during the second half of FY2004)
Target Number of Employees:Approx. 780 (Reduction of approx. 240 )
Expected improvement:Cost reduction of approx.1.5 billion yen per annum
2. Operating tie-up with Tokan Kogyo Co., Ltd.
To consolidate our business base in the corrugated board business, Japan Paperboard Industries Co., Ltd. And Tokan Kogyo Co., Ltd. has agreed to proceed with an operating tie-up in the corrugated board business.
Outline of Operating Tie-Up : See attached "Operating Tie-Up with Tokan Kogyo"
[Attachments] "Operating Tie-Up with Tokan Kogyo"
"Profile of Tokan Kogyo Co., Ltd."
[Attachment] Profile of Eight Corrugated Board Companies
  FY2002 Number of Employees Offices
Million yen
Capital Sales
Jujo Higashi Corrugated Fiberb.Co., Ltd.
(Iwaki, Fukushima)
60 1,872
Nakoso(Fukusima), Takahata(Yamagata)
KG Pack Corp.
(Souka, Saitama)
306 13,753
Nichiita Package Tokyo Corrugated Case Corporation
(Matsudo, Chiba)
440 4,961
San-Mic Chiyoda Corrugated Case Corporation
(Chiyoda, Tokyo)
310 1,853
Jujo Corrugated Case Corporaion
(Kadoma, Osaka)
100 2,825
Chubu Corrugated Case Coporation
(Kasugai, Aichi)
200 1,788
Goto Corrugated Case Corporation
(Motosu, Gifu)
90 1,103

Nichiita Package Kyoto Corrugated Case Corporaion
(Kuze, Kyoto)

80 1,431
(Japan Paperboard Industries) 1,586 29,586