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Paper and White Paperboard Business

Aiming to achieve business strategic goals by leveraging the strengths of the Hokuetsu Group

Paper & White Paperboard Sales Division

Business strategy Status of efforts in FY2022
Build a best production scheme for printing and communication paper according to domestic and international demand movement Because of raw materials and fuel and logistic cost increasing by rapid depreciation of Japanese yen, we were forced to implement price revisions of our products. Also we had shut down No.2 paper machine at Niigata mill as of June 2022. At the same time, we are now in the process of reviewing our product lineup, including consideration of basis weight and consolidation of product lineup in order to increase efficiency of production. Moving forward, the Profit Management Office will pursue a product mix that responds to changes, aiming for best production and maximum profits.
Strengthen export and sales expansion based on a direct trading system We have a top share of major printing paper (like printing paper category A and LWC) among Japanese manufacturers for export quantity. In FY2022, our export quantity reached approximately 300,000 tons on a weight basis. Although we had to make stable arrangements for shipping delivery under global supply chain turmoil, we were able to achieve 111% year-on-year growth in Kishu cup base paper and 103% year-on-year growth in medium paper.
Development of new products to utilize printing and communication paper manufacturing technology We are focusing on proposing paper file folders as an alternative to plastic folders, and sales volume is increasing. Regarding water-absorbent paper, we are also proposing that it can be applicable not only to absorb water, but also to impregnate and retain chemicals when in need.
Aiming for customer satisfaction by looking for latent demand to our products The Wholesale Merchant Department, Direct Sales Department, and Publishing & Media Department have developed speedy sales activities based on the main products of each department to leverage their strength in handling all products. Also, the Material Logistics Department has improved delivery systems to be more efficient by sharing production information from each mill. (Transitioned to a new organizational structure from April 2023.)
Taking in new products needs for packaging business by whole of Hokuetsu Group To respond to the various requirements from our customers, we are working together with group companies Hokuetsu Package and Hokuetsu Paper Sales to engage in various research and development activities. We will continue to promote research and development in the packaging market with a sense of urgency as a unified group.

Paper & White Paperboard Sales Division: Production

Production ratio by product and mill (FY2022)

Aiming to improve profitability to respond in a changing external environment under a new organizational structure

  • Since April 2023, the first year of the Medium-term Management Plan 2026, we changed our organizational structure of four departments as new: the Paper Sales Department, the White Paperboard Sales Department, the Export Department, and the Product Logistics Department. Through discussion with various customers, we are trying to engage in sales adapting to changes in the demand environment after the price improvement.
  • The Paper Sales Department will work with mills to achieve best production and logistics in accordance with the strategies of the Profit Management Office. In addition, it will strive to secure profits by establishing a system that can quickly respond to domestic and overseas market trends and rapidly changing exchange rates.
  • The White Paperboard Sales Department will strive to expand users base with the target of recovering the market share for coated duplex board, and aim to rebuild the white paperboard business while closely cooperating with the Paper Cup Business Development Office.
  • The Product Logistics Department are aiming to improve transportation efficiency by further promoting a modal change in order to eliminate the “2024 problem” and promote reductions in Scope 3 CO  emissions.

Building an optimal production system

Improving production efficiency with a sales system that captures customer needs

Based on the strategy by Profit Management Office, sales departments and mills will work together to implement an optimal production, and are aiming to secure profits by maintaining price improvement and expanding sales by higher competitive products. In addition, we are aiming to build the trust of our customers and stronger relationships by striving to provide stable supplies from both production and logistics aspects.
We will actively convey our environmental initiatives to users who are highly environmentally conscious and also by promotion of the superiority of our products’ environmental performance, we are trying to get new business extension and sales.

Strengthen profitability of existing businesses

Aiming to secure further profits based on product price improvement

The Paper Sales Department will closely monitor demand trends for coated paper, deepen mutual understanding with users, and strengthen alliances through products with a stable supply and high environmental performance, which are our strong points. For uncoated paper, on the other hand, we will focus on understanding the trends of major users and respond flexibly through mutual production between the Niigata and Kishu mills. For colored wood-free paper, we will focus on securing our existing market share by strengthening relationships with our main distributors.
For the White Paperboard Sales Department, sales forecast would continue to be sluggish primarily due to low demand for packaging, which is a main application, has not returned to pre-COVID levels.
However, we expect the demand recovery trend to continue in the long term due to a recovery in the flow of people as COVID-19 has been reclassified as a Class 5 infectious disease. As such, until demand fully recovers, we will promote the reduction of CO  emissions at our Kanto Mill and make our environmental efforts a key point in our efforts to recover sales volume and further expand sales.
The Export Department is responsible for responding immediately to rapidly changing exchange rate and export market trends, promoting optimal logistics and price changing to products in accordance with the Profit Management Office's strategies, and contributing to the improvement of profitability by increasing marginal profit.

Tackling the logistics problem in 2024

Accelerating a modal shift to cover a shortage of truck drivers

From April 1, 2024, overtime hours for truck drivers will be capped at 960 hours per year, leading to concerns that truck transportation capacity will decline.
We had estimated that the transportation capacity from the Niigata Mill and Kanto Mill (Ichikawa/Katsuta) to Kansai area and westward might decrease, so we have begun switching to JR rail containers for some of the logistics from the Kanto Mill. Moving forward, we will continue to accelerate the modal shift by increasing container transportation to appropriately respond to the “2024 problem” and further reduce CO  emissions.

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