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Investment Business

Accelerating the business portfolio shift by leveraging our core technology and expertise

In FY2022, to achieve a “business portfolio shift” which is set by “Medium-term Management Plan 2023” a series of initiatives were conducted such as looking for the entering opportunities for new businesses, expanding existing business areas including M&As.
In order to achieve the Group’s sustainable growth, we will continue to develop new businesses for the future and promote business portfolio shift. Moreover, to grow our business, we will strengthen the cooperation with existing invested businesses, look for new business globally, chase M&A opportunities, and support the development of new products that meet market needs.

Consolidated subsidiaries

Alberta-Pacific Forest Industries Inc. (Al-Pac)

Alberta, Canada

Business Overview Main activities in FY2022 Business strategy moving forward

Al-Pac is one of North America’s largest commercial pulp mills producing market pulp and exporting power to the grid in Alberta which is generated by biomass.

  • Location: Alberta, Canada
  • Business: Pulp manufacturing, power export, etc.
  • Products: Hardwood pulp, softwood pulp
  • Production capacity: 640,000 tons/year

In the first half of FY2022, production and shipments were slow due to a shortage of freight rail cars, which also resulted in a sluggish power sales business. When the logistics situation improved in the second half, production and shipments recovered to almost normal levels, and electricity sales accordingly. This brought almost record-high earnings with the help of record-high pulp prices.

To maximize the power sales business and reduce CO  emissions, we implement plans and initiatives. Also, we will make efforts to increase log-to-pulp yields and optimize energy consumption processes for the aim of improving our pulp production cost competitiveness.

Jiangmen Xinghui Paper Mill Co., Ltd.

Jiangmen Xinghui Paper
  Mill Co., Ltd.

Business Overview Main activities in FY2022 Business strategy moving forward

Jiangmen Xinghui Paper Mill manufactures and sells white paperboard that meet customer needs, such as coated duplex board used for packaging materials, special grade paper for blister packs, and uncoated products. The sales are centered in Guangdong Province, and they also export to Southeast Asia.

  • Location: Guangdong, China
  • Business: Manufacture and sales of white paperboard
  • Products: Coated duplex board, coating liners, white liners
  • Production capacity: 300,000 tons/year

In China, the economic situation was sluggish due to the “zero COVID” policy, and the paper industry as a whole continued to face difficult business operations. Despite these difficult circumstances, they implemented vacuum pumps to save energy and introduced sales of white back coated duplex board suitable for blister packs.

While securing stable sources of recycled paper, the main raw material, and alternative raw materials, and promoting sales expansion by cultivating new customers and developing new products, we will also work to comply with environmental regulations that are becoming stricter every year.

TOPIC:Al-Pac’s 30th anniversary

Photo:Al-Pac’s 30th anniversary

Al-Pac began commercial production in 1993 and celebrated its 30th anniversary in 2023. Since the planning of the business, the construction and operation of the mill has been carried out with the cooperation of Japanese and Canadians and has overcome various hardships and transitions up to the present day. Since 2015, the company has become a member of the Hokuetsu Corporation Group and has developed a cooperative structure. It continues to write new history for the Group. Currently, the company is not only involved in the pulp business, but also serves as a base for the overseas business development of the Hokuetsu Group, including expanding the electricity sales business and developing new businesses.

Consolidated subsidiaries (Performance Materials Business)

Bernard Dumas S.A.S. (Dumas)

Bernard Dumas S.A.S.
  (Dumas)

Business Overview Main activities in FY2022 Business strategy moving forward

Dumas is a French manufacturer of performance materials and specialty papers. It became a wholly owned subsidiary in 2012. Main products are AGM battery separators, air purification filter paper, etc. by using glass fiber as raw material.

  • Location: Dordogne, France
  • Business: Manufacture and sale of glass fiber sheets
  • Products: AGM battery separators, filter paper

Both sales and operating income (EBIT) exceeded the previous year thanks to recovery from the impact of the spread of COVID-19 and an increase in selling prices.

Although the European AGM battery separator market has entered a stable period, new entrants are continuing to enter the market, so we will work to maintain market share and promote sales expansion activities to expand the market outside of Europe.

Shanghai Toh Tech Co., Ltd.

Shanghai Toh Tech Co., Ltd.

Business Overview Main activities in FY2022 Business strategy moving forward

Shanghai Toh Tech processes the base paper produced at the Nagaoka Mill and other locations to produce chip carrier tapes for transporting electronic components such as capacitors and resistors.

  • Location: Shanghai, China
  • Business: Production of chip carrier tape

This year marked a turning point in the market, with demand for smartphones, which had been the market driver, plummeting due to the strong impact of the “zero COVID” policy, including the implementation of a lockdown in Shanghai.

In China, the production of electric vehicles (EVs) is rapidly expanding, and vehicle electronic components are expected to grow further in the future. We will work to strengthen our earnings base by shifting to growth fields while collaborating with customers.

Other overseas businesses

Freewheel Trade and Invest 7 Pty Ltd. (FW)

Freewheel Trade and Invest
  7 Pty Ltd. (FW)

Business Overview Main activities in FY2022 Business strategy moving forward

FW is a joint venture between Hokuetsu Corporation (90%) and South African company NCT Forestry Agricultural Co-operative Limited (10%). It operates a tree-planting business in the Republic of South Africa, and operates through a cycle of tree planting, nurturing growth, felling, and tree planting. It stably sells logs primarily for paper production and lumber.

  • Location: KwaZulu-Natal, Republic of South Africa
  • Business: Timber farming

In order to reduce transportation costs, it has increased the use of freight rail cars instead of trucks. In addition, it closely monitored the market conditions for eucalyptus lumber, which is expected to sell at a higher price, and planned logging areas and strengthened sales to ship and sell products in a timely manner, where demand is expected to increase.

The company will expand the area of forest land it owns and manages by confirming the intentions of other local forest owners and, in some cases, purchasing forest land. It aims to further expand business and capture new business opportunities in the future by increasing its capacity to absorb CO .

Affiliated companies accounted for under the equity method

Company Business Overview
Daio Paper Corporation Hokuetsu Corporation acquired the shares of Daio Paper, a general paper manufacturer, in 2012, and as of the end of March 2023, owns 41,589,000 shares, or 24.8% of the outstanding shares excluding treasury stock, and considers the company to be an equity method affiliate.
By capturing revenues from the home and personal care business, which is the company’s forte, we have shifted our business portfolio as stated in Medium-term Management Plan 2026. Also, we continue and strengthen the cooperative relationship with the company as part of our medium- to long-term management strategy by holding the shares of Daio Paper.
Headquarters: Shikokuchuo City, Ehime Prefecture
Business: Manufacture, processing and sale of paper, paperboard, pulp and their by-products
Products: Newsprint paper, printing paper, packaging paper, paperboard, containerboard, pulp, sanitary paper, disposable
diapers, etc.
Production capacity: 210,000 tons/year

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