February 13, 2004

Continuous Adjusted Operation to Start at Kushiro Mill for Wholesale Power Plant

Nippon Unipac Holding Group
Nippon Paper Industries Co., Ltd.

On February 6, Nippon Paper Industries Co., Ltd. (President: Takahiko Miyoshi), Japan's leading paper and pulp manufacturing company and a core member of the Nippon Unipac Holding Group, started continuous adjusted operation of the power plant at Kushiro Mill for the supply of electricity on a wholesale basis. Construction work for the power plant was completed on October 31, 2003, and was followed by a series of tests. The rated output was attained on January 19 this year. The Company intends to continue trial operation from February, while making adjustments for combustion and control. Starting on October 1 this year, Nippon Paper Industries will commence full-scale operations, supplying electricity to Hokkaido Electric Power Co., Ltd. on a wholesale basis.

Kushiro Mill of Nippon Paper Industries Co., Ltd. successfully bid for the second call by Hokkaido Electric Power Company in 1997 for an electricity wholesaler. The call was made pursuant to the amendment made in 1995 to the Electric Utility Law, which deregulated the electricity wholesale business.

[Profile of electricity wholesale business at Kushiro Mill]

(1)Scale of business : contracted electric power of 80,000 KW and annual operation ratio of 70% (100% during daytime and 30% at night)
(2)Power generation facilities : pulverized coal boiler (260t/h), steam turbine (88,000 KW) and power generator (97,778 KVA)
(3) Fuel : bituminous coal from overseas
(4) Emission treatment facilities : denitrification equipment, desulfurization equipment, and electrostatic precipitator

The power generation plant at Kushiro Mill is the Company's first business-use thermal power generation plant in the eastern Hokkaido region. The power plant has been built on idle land at the Kushiro Mill site, and can therefore take advantage of the in-house power generation technologies of the Mill. The power capacity of 80,000KW is almost equal to demand for electric light in Kushiro City.
Through sufficient supply, the loss in transmission that occurs as electricity is being transmitted from central Hokkaido to the Kushiro area can be reduced, and the Company can make a contribution to energy conservation through highly efficient power generation.

The wholesale power plant at Kushiro Mill
The wholesale power plant at Kushiro Mill