November 28, 2006

Joint Acquisition of Afforestation/Woodchips Production and Export Businesses of IP Brasil
- Strategic Acquisition of Resources for Greater International Competence -

Nippon Paper Industries Co., Ltd.
Marubeni Corporation

Nippon Paper Industries Co., Ltd. (President: Masatomo Nakamura) and Marubeni Corporation (President: Nobuo Katsumata) have reached a basic agreement with International Paper do Brazil, a subsidiary company of International Paper Company, (IP Brasil; hereinafter "IP") for the 100% acquisition of Amapa Florestal e Celulose S.A. and two other corporations (hereinafter "AMCEL") which conduct the businesses of afforestation, woodchips production and biomass fuel export in Brazil. The procedures for the acquisition from IP are to be completed by year end.
Nippon Paper Industries and Marubeni will conclude a formal shareholders agreement before the year end, and will make a joint 50-50 investment in AMCEL. Through the acquisition, the two companies will secure and consolidate their own forest resources amidst ever intensifying competition resulting from recent growth in demand on a global scale, thereby enhancing international competence.
The greatest advantage of the acquisition is that the investment effects will emerge immediately. The afforestation business usually involves nearly ten years from planting to the actual export of woodchips for paper making, and further outlays will be needed for infrastructure development at tree farms and a port for woodchips shipping. Here, since all existing businesses will be acquired from tree planting to chip exports, it would be possible to use the resources and recover funds at the same time.
Moreover, AMCEL owns about 130,000 hectares (more than twice the land area of the 23 wards of Tokyo) of land area where trees are plantable, in which about 62,000 hectares of tree farms have already been developed. It is the largest planted forest set out by a Japanese enterprise so far, and further expansion is also possible in the future.
Through the acquisition of AMCEL, Nippon Paper Industries shall secure raw materials to meet the global increase in demand for woodchips and will consolidate the business foundations to prepare for active global pulp and paper businesses development in the future, for the "Realization of Sustainable Growth in Corporate Value" mentioned in the Group Vision 2015. Nippon Paper Industries aims to develop 200,000 hectares of Tree Farm in its overseas afforestation activities, called the "Tree Farm Initiative." The acquisition of AMCEL's tree farms would immediately increase the forest area already developed to about 166,000 hectares.
Marubeni aims to "bolster the value chain from raw materials to final products," and has developed businesses in all areas of pulp and paper industries. Marubeni recognizes that the importance of the business of raw materials has grown especially in securing resources derived from tree farms, the value of which is set to rise further. Through the acquisition of businesses in Brazil where trees can be grown rapidly with impressive competitiveness, Marubeni will be able to secure plantation wood resources with the potential to enhance the value chain further. Moreover, the location and marketing experiences of AMCEL would enable Marubeni to sell woodchips to Europe and the United States, something Marubeni has not yet done, and also to participate in new businesses targeted towards Europe.
Corporate profile of AMCEL
Name of companies

·Amapa Florestal e Celolose S.A.
·IP ParticipaÇÕes
·Chamflora Amapa Agroflorestal LTDA

The companies were founded in 1976 for the Caribbean pine afforestation business, and became member companies of the International Paper Do Brasil Ltda. Group in 2000. In February this year, IP decided to sell the companies as a part of the business portfolio reorganization plan.


Santana City, Amapa State, Federal Republic of Brazil

Number of employees 364 (as of April 2006)
Scope of business

Afforestation, woodchips production and export, biomass fuel export
Annual sales of 123 million Real (about 6.8 billion yen)

Tree Farms 306,000 hectares in possession (of which 130,000 hectares are plantable)
Major facilities Nursery, tissue cultivating room, tree planting and harvesting equipment, woodchips mill, loading facilities, shipping port
Climate and vegetation zone Tropical monsoon climate; savannah

Tree Farm of AMCEL (eucalyptus)
Tree Farm of AMCEL (eucalyptus)
Unused AMCEL site (where afforetation is planned)
Unused AMCEL site (where afforetation is planned)