June 13, 2006

Operating Trial of Environmentally Friendly Pulping Technology Commences:
World's First Full-Scale Plant to Be Installed at Yatsushiro Mill

Nippon Paper Industries Co., Ltd.

Nippon Paper Industries Co., Ltd. (President: Masatomo Nakamura) has announced a plan to install actual operating facilities for an environmentally friendly pulping process in its Yatsushiro Mill (Yatsushiro, Kumamoto Prefecture). This new system, which employs a process known as "polysulfide cooking with electrolysis of white liquor," is the first of its kind in the world. The technology has been developed in collaboration with chemical manufacturer Kawasaki Kasei Chemicals Ltd. and electrolytic cell maker Chlorine Engineers Corp., Ltd.Capital investment for the installation of this equipment will be 1.3 billion yen and construction will be completed in September 2007.
In the process of polysulfide cooking with electrolysis of white liquor, white liquor, a chemical used to produce pulp from wood chips, is converted into polysulfide through electrolyzation. This polysulfide protects wood fibres (cellulose and hemicellulose), the main constituent of pulp, from decomposition to significantly increase pulp yield. Moreover, in electrolytic cells, while white liquor is electrolyzed to produce polysulfide at the anode, sodium hydroxide is produced as a by-product at the cathode. As the price of sodium hydroxide continues to soar, the sodium hydroxide produced by this process can be used in the pulp bleaching stage to reduce chemical costs considerably.
Together with the two co-developers of this new technology, Nippon Paper Industries has been investigating the basics of this technique using a pilot plant. Since the research is now subsidized through grants from the Ministry of Economy, Trade and Industry, the Company will commence practical technological development and actual mill trials to confirm the benefits of this technology.
At present, the Yatsushiro Mill produces nearly 800 metric tons of pulp per day from wood chips. The introduction of this new technology will reduce consumption of wood chips by 5% compared with the conventional Kraft pulping process. This reduction in wood consumption will save approximately 20 km2 of forest area per year and will lower the required energy consumption.
In accordance with the Nippon Paper Group's Charter on the Environment, Nippon Paper Industries has been keenly engaged in sustainable business activities that are in harmony with nature. Polysulfide cooking with electrolysis of white liquor is a resource saving technology that will conserve forest resources, the raw material of paper. The Company is committed to continuing attempts to conserve natural resources and to contributing to the sustainable development of society.
A presentation regarding this technology will be given at the 2006 Engineering, Pulping and Environmental Conference in Atlanta, Georgia this November, as well as on other occasions.