Nippon Paper Industries Co., Ltd.
3863・Prime Market・Pulp & Paper
Business
Nippon Paper Industries Co., Ltd. leads a group comprising the Company, 120 subsidiaries, and 29 affiliated companies. Building on its core Paper & Paperboard Business centered on paper (newsprint and printing/information paper), paperboard, and pulp, the group operates a Household & Daily Products Business handling household paper, paper-processed products, and chemical products, an Energy Business utilizing power generation equipment at paper mills, and a Timber, Building Materials & Civil Engineering/Construction Business. As a leading player in Japan's paper industry, the company serves a broad customer base ranging from general consumers to industrial applications, and also operates overseas businesses including Opal in Australia and NDP in North America. With the circular use of renewable wood-based resources at the core of its business, the company is promoting its transformation into a "comprehensive biomass company."
Business Model
The company utilizes domestic and overseas paper mills, forest resources, and breeding technology as shared infrastructure, securing a stable revenue base through the manufacturing and sale of paper and paperboard while enhancing profitability through high-value-added products such as household paper, functional films, chemical products, and liquid paper containers. It also diverts surplus power generation capacity at paper mills to wholesale electricity supply, and in the timber and building materials business, it monetizes forest resources through vertical integration from upstream to downstream, forming a multi-layered earnings structure.
Company Strengths
Under the Mid-Term Management Plan 2025, the company reduced graphic paper production capacity by approximately 30% and improved fixed cost efficiency by maintaining a 90% utilization rate. Combined with other companies' withdrawal from the business, domestic Paper (Newsprint & Printing/Information Paper) sales volume in FY2025 (ending March 2025) exceeded the previous period, confirming that the production system realignment has contributed to strengthening competitiveness.
The company has introduced cutting-edge technologies such as DNA marker selection in eucalyptus breeding and forestation management in Brazil, continuously improving yield per unit area. Domestically, it has obtained "Specified Propagator" certification in six prefectures—Kumamoto, Shizuoka, Hiroshima, Tottori, Oita, and Akita—and in January 2026 opened Japan's largest enclosed seed orchard within the Akita Mill, steadily building out the supply system for its elite tree seedling business.
Under the Mid-Term Management Plan 2025, the company raised the sales ratio of the Household & Daily Products Business from 32% in FY2020 (ending March 2020) to 40% in FY2025 (ending March 2025). Operating income for the Household & Daily Products Business in FY2025 (ending March 2025) was ¥7,172 million, a turnaround from an operating loss of ¥6,137 million in the previous period, driven by the year-round operation of the Crecia Miyagi Plant and the normalization of operations at NDP.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), net sales were ¥1,192,606 million (up 0.9% year on year), operating profit was ¥25,205 million (up 27.9%), and net profit attributable to owners of the parent was ¥11,743 million (up 158.7%). The full-year contribution from the Cresia Miyagi Plant and the normalization of operations at NDP drove the increase in both revenue and profit. The sharp recovery in net profit was mainly due to impairment losses under extraordinary losses shrinking from ¥13,329 million in the previous period to ¥2,008 million. Meanwhile, the Energy Business saw a decline in revenue due to lower electricity sales prices resulting from falling coal prices, while operating profit in the Paper & Paperboard Business fell sharply due to deteriorating market conditions for paper (Newsprint & Printing/Information Paper) exports. For FY2027 (ending March 2027), assuming raw material and fuel prices remain elevated due to the situation in the Middle East (a ¥7.0 billion negative impact factored in as an external factor), the company forecasts operating profit of ¥25,000 million and net profit of ¥10,000 million, a slight decline in profit.
Growth Strategy
Under the Medium-Term Management Plan 2030, the company is simultaneously pursuing three strategies: balance sheet optimization, structural reform, and profitability improvement
The company is promoting asset sales and reduction of interest-bearing debt with the goal of achieving a net D/E ratio of 1.0x or below (on an equity capital basis). It continues to slim down assets through the sale of investment securities (¥10,106 million in proceeds in FY2026 (ending March 2026)), among other measures. The equity ratio improved to 29.2% (28.3% in the previous fiscal year), showing an improving trend.
Full-year operation of the Cresia Miyagi Plant has expanded household paper sales, and the Household & Daily Products Business turned profitable in FY2026 (ending March 2026), posting operating profit of ¥7,172 million. Normalization of operations at NDP and Opal also contributed. The full-year contribution of price revisions is expected in the next fiscal year as well.
In response to the long-term decline in domestic paper demand, the company is promoting cost structure improvements through the shutdown of paper machines and reorganization of the production structure. Price revisions for various products implemented in FY2025 are expected to make a full-year contribution in FY2027 (ending March 2027). The company continues to pursue cost improvements in response to rising labor and logistics costs.
The Medium-Term Management Plan 2030 sets financial targets of ROIC of 4% or above, ROE of 8% or above, and operating profit of ¥60.0 billion or above. In FY2026 (ending March 2026), ROE remained at 2.4%, leaving a large gap versus the target, but the company intends to engage proactively in dialogue with capital markets and manage the business with awareness of cost of capital and share price.
The company is promoting its transformation into a "comprehensive biomass company" through initiatives such as establishing a global supply framework for the EV market via the operation of the Hungary plant for Functional Cellulose (CMC), securing the first adoption decision for the next-generation paper container "NSATOM®," and responding to growing demand for Biomass Fuel Chip Supply.
Last updated: July 19, 2026