Tokushu Tokai Paper Co., Ltd.
3708・Prime Market・Pulp & Paper
Business
Tokushu Tokai Paper is a papermaking group formed in 2010 through the merger of Tokushu Paper and Tokai Pulp. In addition to its three core papermaking businesses—Industrial Materials Business (Corrugated Board Base Paper & Kraft Paper, and electricity sales), Specialty Materials Business (Specialty Printing Paper and Specialty Functional Paper), and Household Products Business (sanitary paper products and processed goods)—the company operates an Environment-Related Business centered on waste recycling and utilization of its company-owned forest land in the Southern Alps. The group comprises 16 consolidated subsidiaries and 5 affiliated companies, with net sales of ¥95,413 million for FY2026 (ending March 2026). The main sales destination for the Industrial Materials Business is Nippon Tokai Industrial Paper Supply, an equity-method affiliate, which accounts for 37.5% of net sales. The company is listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
In the Industrial Materials Business, the company pursues economies of scale through high-volume sales via a joint sales company with Nippon Paper Industries, while in the Specialty Materials Business it develops high-value-added products in diverse varieties and small lots through direct sales by the parent company. In the Household Products Business, two subsidiaries manufacture and sell sanitary paper products and other items. In the Environment-Related Business, the company is expanding recycling businesses—such as RPF manufacturing, waste treatment, and urban mining operations—through M&A, structuring the business so that stable earnings from the paper manufacturing business serve as a source of funds for growth investment.
Company Strengths
The company develops differentiated products such as Specialty Printing Paper, Specialty Functional Paper, Wet Mould, and TT-PACKAGE through direct sales by the parent company. In FY2026 (ending March 2026), the Specialty Materials Business invested ¥497 million in R&D, launching a total of 17 new products in packaging and Wet Mould in the fiscal year alone. The market introduction of a new grade of non-fluorine oil-resistant paper and Specialty Functional Paper underscores the ongoing creation of a product lineup that is difficult for competitors to imitate.
Starting with the consolidation of Suruga Service Kogyo as a subsidiary in 2020, the company has continuously pursued M&A, including the acquisition of Toei HD in 2023, the acquisition of Kito HD in 2024, and the full consolidation of Toei as a wholly owned subsidiary in May 2025. In FY2026 (ending March 2026), sales in the Environment-Related Business reached ¥18,089 million (up 7.8% year on year), with operating profit of ¥755 million (up 42.7% year on year), continuing its expansion. The company has already established a diversified resource recycling platform spanning waste fuel, home appliance recycling, and recycled plastics.
As of the end of FY2026 (ending March 2026), net assets stood at ¥90,102 million, with an equity ratio of 58.9% (up 2.6 percentage points from the previous fiscal year). Interest-bearing debt decreased from the previous fiscal year, and total liabilities shrank to ¥51,208 million. Operating cash flow secured was ¥9,894 million, demonstrating a financial base capable of simultaneously executing growth investments (capital expenditures of ¥8,954 million) and debt repayment.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), the company achieved higher revenue and profit, with net sales of ¥95,413 million (up 0.6% year on year), operating profit of ¥4,296 million (up 9.4%), and net income attributable to owners of the parent of ¥4,368 million (up 21.1%). A substantial reduction in extraordinary losses, from ¥1,797 million in the prior year to ¥226 million, contributed to the large increase in net income. As an external factor, amid continued rises in raw material costs, the spread of price revisions and the effect of M&A in the Environment-Related Business supported performance. Meanwhile, for FY2027 (ending March 2027), the company forecasts net sales of ¥100,000 million and operating profit of ¥3,200 million, representing higher revenue but a substantial decline in profit, as the suspension of facilities in the Specialty Materials Business and upfront investment costs are expected to weigh on earnings.
Growth Strategy
Aiming to enhance corporate value through growth investment in the resource recycling business and transformation of the paper business portfolio
Through the full consolidation of Toei Co., Ltd. (May 2025) and the consolidation of Kito Co., Ltd., Environment-Related Business net sales expanded to ¥18,089 million with operating profit of ¥755 million. Under the 7th Medium-Term Management Plan, growth investment centered on the recycling business will be actively pursued, with upfront costs for expanding new business rights expected to be recorded in FY2027 (ending March 2027).
Construction of a new waste boiler at the Shimada Plant (scheduled for completion in October 2027) is planned to improve the energy cost structure of the Industrial Materials Business, while also creating synergies with the Thermal Recycling Fuel (RPF) Manufacturing & Sales business within the Environment-Related Business.
In April 2026, TT Trading Co., Ltd. was absorbed through merger, consolidating the specialty functional paper trading company function into the Specialty Materials Business Division. While temporarily suspending certain production equipment to improve operational efficiency, the company aims to expand sales of Specialty Functional Paper overseas and capture demand for plastic-free alternatives.
Starting with the 7th Medium-Term Management Plan, the dividend policy has been changed to "whichever provides the higher return amount between a payout ratio of 50% or DOE of 4.0%." For FY2027 (ending March 2027), an annual dividend of ¥94 (payout ratio of 71.4%) is planned, and together with flexible share buybacks, the company aims to improve capital efficiency and strengthen shareholder returns.
Last updated: July 19, 2026