January 25, 2007

Nippon Paper Group Develops System to Unify Management of Group Logistics
- Nippon Paper Logistics, Daishowa Logistics, and Nihon Itagami Butsuryu Integrated -

Nippon Paper Group, Inc.

The Nippon Paper Group has been rationalizing its logistics system based on businesses and regions. To develop the logistics most suited for the overall Group, it will seek to rationalize the system across the Group, crossing businesses and regions. As the first step in this initiative, it was determined that three Group companies, namely Nippon Paper Logistics Co., Ltd., (President: Koji Itasaka), Daishowa Logistics Co., Ltd. (President: Ryoichi Komine), and Nihon Itagami Butsuryu Co., Ltd. (President: Tsugutoshi Funada), will be integrated on April 1, 2007, with Nippon Paper Logistics taking on the role of a core company that carries out the logistics of the overall Group.
In April 2003, the Nippon Paper Group divided mills around the country into four blocks, primarily based on the logistics of Nippon Paper Industries. In these four blocks, four main logistic companies, namely Kyokushin Transport Co., Ltd. (President: Tsutomu Matsuda) in the Hokkaido block, Nanko Unyu Co., Ltd. (President: Masahiro Iwabuchi) in the Tohoku block, Daishowa Logistics in the Chubu block and Iwakuni-Kaiun Co., Ltd. (President: Satoshi Fujita) in the Chugoku block, have been making efforts to reduce costs of main-line transportation from mills in each block.
As a result of the integration of the three companies named above, the planning and management divisions of Daishowa Logistics and Nihon Itagami Butsuryu will be integrated into Nippon Paper Logistics. In addition, in cooperation with the main companies in each block, the Group will develop a system in which not only transportation from mills, but also distribution to areas of consumption are rationalized and managed through central control. Specifically, the Group will take steps to consolidate warehouses in areas of consumption and to share logistics operations with its agents to reduce transportation costs and improve customer services as quickly as possible.
The gradual transfer of the logistics management of Nippon Paper Industries to Nippon Paper Logistics has in fact been underway since July 2006. Going forward, the Group will exert synergies by progressively developing the central control system of logistics operations with Group companies, namely Nippon Daishowa Paperboard, NP Trading, Nippon Paper Crecia, and Nippon Paper-Pak.