Daio Paper Corporation
3880・Prime Market・Pulp & Paper
Business
Daio Paper Corporation, founded in 1943, is an integrated paper manufacturer with 31 consolidated subsidiaries and 1 affiliated company. Its business consists of three segments: "Paper & Paperboard," "Home & Personal Care," and "Others." The Paper & Paperboard business manufactures and sells Newsprint, Printing Paper, Packaging Paper & Functional Materials, and Paperboard & Corrugated Cardboard, among other products, while the Home & Personal Care business offers Tissue Paper, Diapers, Feminine Care products, Pet Care products, and more, both domestically and internationally, centered on the "Elleair" brand. In addition to its major domestic plants (Mishima, Kawanoe, Kani, etc.), the company has overseas operations in China, Brazil, Thailand, Indonesia, and other locations, conducting business on a global scale.
Business Model
The company adopts a vertically integrated model that spans manufacturing at its own plants through to sales via sales subsidiaries (EBS, etc.). In the Paper & Paperboard business, the fundamental approach is mass production based on forecast demand and stable supply, securing earnings through the penetration of price revisions and expansion of export sales. In the Home & Personal Care business, the company focuses on value-added products under the "Elleair" brand, deployed both domestically and overseas, and is improving its overseas earnings structure through selective focus by region.
Company Strengths
Under the "elleair" brand, the company continuously launches value-added products such as soft-pack tissue, long-roll toilet paper, shorts-type sanitary napkins, and cat litter for system toilets. In FY2026 (ending March 2026), value-added products in Family Care (Tissue Paper), Pet Care, and other categories exceeded the previous fiscal year in both sales volume and sales revenue, contributing to the Home & Personal Care segment's return to profitability (profit of ¥8,077 million).
In addition to major domestic plants in Mishima, Kawanoe, Kani, Iwaki, and other locations, the company has manufacturing bases in four overseas countries. At Iwaki Daio Paper, the biomass boiler that had been shut down since 2022 was restarted in fiscal 2025, achieving a plant powered 100% by self-generated electricity from biomass fuel. This energy cost improvement contributed to a 56.7% year-on-year increase in the Paper & Paperboard segment profit (¥14,073 million).
A commercial plant for cellulose nanofiber (CNF) composite resin began commercial production at the Mishima Plant in July 2025. The company achieved a quality improvement reducing aggregates to approximately one-twentieth of pilot-scale product levels, advancing application development to the point of passing quality approval from an automotive parts manufacturer. The biorefinery project, adopted under a NEDO program, aims to begin commercial facility operation in FY2030 (ending March 2030).
ENVALITH's Perspective
Performance Trend
Revenue peaked at ¥671,688 million in FY2024, up from ¥612,314 million in FY2022, before declining slightly to ¥668,912 million in FY2025 and ¥666,770 million in FY2026. Operating profit, meanwhile, posted a large loss of ¥21,441 million in FY2023, remained subdued at ¥14,367 million in FY2024 and ¥9,807 million in FY2025, but recovered sharply to ¥24,032 million in FY2026. The main drivers of this recovery were: (1) fixed cost reductions from structural reforms in the overseas Home & Personal Care business; (2) growth in domestic sales of value-added products and the spread of price revisions; and (3) improved energy costs following the restart of the Iwaki Daio Paper boiler. External factors, including the benefit of lower coal prices, also contributed. Net profit also turned positive, moving from a loss of ¥11,197 million in the previous period to a profit of ¥8,886 million.
Growth Strategy
Rebuilding the management foundation along three axes: overseas structural reform, strengthening added value domestically, and commercialization of the CNF new materials business
The company reduced fixed costs by completing the sale of its Turkish subsidiary and reviewing unprofitable transactions in the China baby care business, among other measures. In FY2027 (ending March 2027), the company aims to achieve operating profitability across the entire overseas business through the full-year realization of structural reform effects and the promotion of focused measures tailored to the market characteristics of each region.
The company is strengthening the profitability of its domestic business through sales growth of value-added products such as soft-pack tissues, long-roll toilet paper, nighttime nursing care products, and new pet care products, as well as the penetration of price revisions. In FY2026 (ending March 2026), the H&PC segment turned profitable, confirming the effectiveness of these measures.
While operating the business on the premise of declining demand, the company is generating stable cash through steady penetration of price revisions and cost reduction measures (business alliance with Nippon Paper Industries [Hokuetsu Corporation], restart of boilers, etc.). Segment profit in FY2026 (ending March 2026) reached ¥14,073 million, up 56.7% year on year.
The company is advancing the commercialization of a new materials business utilizing Cellulose Nanofiber (CNF), aiming to build revenue sources independent of its existing papermaking business. Leveraging the social demand for plastic reduction and elimination, this initiative serves as a stepping stone toward realizing the long-term vision "Daio Group Transformation 2035."
The company continues to repay long-term borrowings (¥82,542 million repaid in FY2026 (ending March 2026)) while implementing share buybacks of ¥13,721 million to improve capital efficiency. Enhancing financial soundness through strengthened operating cash flow generation is one of the key themes of the 5th Medium-Term Business Plan.
Last updated: July 19, 2026