September 4, 2006

Nippon Daishowa Paperboard Nishinippon to Build New Boiler

Nippon Paper Group, Inc.

Nippon Daishowa Paperboard Co., Ltd. (President: Nobuyuki Otsuki), a member of the Nippon Paper Group, is pleased to announce its decision to build a new coal fired boiler at Geibo Mill (Otake, Hiroshima Prefecture) of Nippon Daishowa Paperboard Nishinippon Co., Ltd., a production subsidiary of Nippon Daishowa Paperboard.
As this new boiler goes into operation, the mill will no longer use heavy oil for power purposes and will achieve oil-free operation. The Company will invest 10.3 billion yen in the boiler, which will be complete in December 2008. Energy costs will be cut by changing the fuel from heavy oil, the price of which is rising rapidly, improving the earnings base of Geibo Mill.
Nippon Paper Group has been working to reduce oil fuel consumption to zero as a key element of its Second Medium-Term Business Plan. The Plan was launched in April 2006 as an initiative to slash energy expenses.
Previously, Nippon Daishowa Paperboard decided to install new boilers at two mills: Nippon Daishowa Paperboard Tohoku Co., Ltd. in the city of Akita and Nippon Daishowa Paperboard Yoshinaga Co., Ltd. in Fuji, Shizuoka Prefecture.
The new boiler at Geibo Mill will be the tenth introduced with the objective of attaining oil-free operation, and follows a boiler built at Gotsu Works of Nippon Paper Chemicals Co., Ltd. in the city of Gotsu in Shimane Prefecture, which was announced in July.