Okayama Paper Industries Co.,Ltd.

Business Details

Manufactures and sells Chuushin Genshi (Corrugating Medium Raw Paper), a type of base paper used for corrugated cardboard manufacturing, and Paper Tube Base Paper used for winding cores of paper, cloth, cellophane, tape, thread, and similar materials. The Okayama head office plant serves as the production base, with operations centered on the Chugoku region. The company also utilizes Oji Holdings Group's sales channels. Paperboard demand is influenced by overall industrial activity trends, and the business has a structure in which commodity prices such as raw material waste paper and LNG directly affect profitability.

Recent Overview

Sales volume and sales both declined amid sluggish domestic demand, while the export ratio rose

In the Paperboard Business for FY2026 (ending May 2026), sales volume decreased 1.0% year on year due to lackluster domestic paperboard demand, and sales declined to ¥9,823 million (down 3.6% year on year). From the second quarter onward, the sales composition also changed as the proportion of exports increased. On the profit side, although prices of waste paper, the main raw material, remained stable, increases in labor costs and equipment maintenance and management costs weighed on results, causing segment profit to decline to ¥940 million (down 12.7% year on year).

Key Products

Growth Drivers

• Strengthening sales capability centered on maintaining appropriate prices and developing new business partners
• Building a production system matched to demand and pursuing further cost reductions
• Improving production efficiency through capital investment (FY2026, ending May 2026: expenditure on acquisition of tangible fixed assets of ¥779 million)
• Reducing manufacturing costs through the introduction of energy-saving and automatic control devices
• Utilizing export sales to support sales volume during periods of sluggish domestic demand

Risks

• Sluggish domestic paperboard demand (lack of robust personal consumption, slowing growth in real income)
• Increases in labor costs and equipment maintenance and management costs, along with difficulty securing personnel
• Elevated prices of fuel and materials such as LNG remaining high (impact of Middle East situation)
• Difficulty procuring domestic waste paper due to outflow of waste paper overseas amid yen depreciation and overseas demand
• Foreign exchange risk associated with the rising export ratio and impact on unit sales prices from changes in sales composition
• Spillover effects on the economy and demand from geopolitical risks such as U.S. trade policy