September 2, 2008

Paper Machine N1 at Yoshinaga Mill of Nippon Daishowa Paperboard Co., Ltd. to Cease Operation

Nippon Paper Group, Inc.

Nippon Paper Group, Inc. (President: Yoshio Haga) decided today to cease normal operation of the paper machine (PM) N1 at the Yoshinaga Mill of Nippon Daishowa Paperboard Co., Ltd. in March 2009, and shut it down permanently in September of the same year. It is taking steps to restructure the production system with the aim of enhancing competitiveness.
 Currently, at the Yoshinaga Mill, PM N1 and N2 primarily produce recycled woodfree paper and PPC paper, whereas other paper machines produce paperboard.
 With the operation halt of PM N1, production of paper grades at Yoshinaga Mill is consolidated into PM N2. By concentrating the production on PPC paper mainly in recycled grades, the fixed costs and energy costs will be reduced. At the same time, the production of recycled woodfree paper will be shifted to other paper machines with excess capacity of Nippon Paper Industries Co., Ltd., thereby bolstering the profits of the Group.
 Every effort is being made to assure that supplies and quality are maintained for users.
1. Facility ceasing operation
• Facility ceasing operation: PM N1 at Yoshinaga Mill (Fuji-shi, Shizuoka), Nippon Daishowa Paperboard Co., Ltd.
• Type of paper produced: PPC paper
• Production capacity: 190 ton/day
2. Date of cessation of operation
September 2009
3. Description of cessation
PM N2 will take over the PPC paper production of PM N1.
Production of 24,000 ton/year of recycled woodfree paper is to be transferred to Ishinomaki, Fuji and other mills.
4. Effect of cessation
The operating income benefit from the cessation is estimated to be 570 million yen per year.