SHIMOJIMA Co.,Ltd.

Business Details

This has been the core segment since Shimojima's founding, selling Original Brand products centered on paper bags, wrapping paper, and paper containers. The company offers a wide range of products to retailers, restaurants, and corporate users through three channels: business sales, store sales, and mail order. It operates on both custom-order products (logo printing, etc.) and ready-made products, and is also focusing on developing and promoting Environmentally Friendly Products (PFAS-Free Oil-Resistant Bags, Paper Food Trays, etc.). Demand for food bags has remained solid against the backdrop of the trend toward de-plasticization.

Recent Overview

Sales increased 6.4% year on year, driven by de-plasticization demand and steady growth in food bags.

Consolidated sales of the Paper Products Business for the full year FY2026 (ending March 2026) were ¥10,634 million (up 6.4% year on year), and segment profit also achieved an increase to ¥1,196 million (up 7.2% year on year), resulting in higher sales and profit. The main drivers of the sales increase were the acceleration of the de-plasticization trend and solid demand for food bags. The business sales division focused on expanding sales of ready-made products and pursuing orders for custom-order products, and increased demand for Environmentally Friendly Products contributed to the sales increase. Impairment losses improved to nearly zero this period, compared to ¥322 million in the prior period (¥340 million including the amount recorded in the Store Supplies Business).

Key Products

Growth Drivers

• Continued solid demand for food bags (paper bags for food packaging)
• Expansion of high-value-added sales through increased order activity for custom-order products (logo printing, etc.)
• Expanding demand for Environmentally Friendly Products (PFAS-Free Oil-Resistant Bags, Paper Food Trays, etc.) against the backdrop of de-plasticization and carbon neutrality trends
• Improved product recognition and brand strength following a Good Design Award win
• Strengthened custom-order proposal capabilities through the opening of the showroom at the Asakusabashi Main Store
• Active investment in new product development utilizing paper and wood materials as substitutes for petroleum-derived products

Risks

• Structural decline in demand for ready-made products due to paid paper bag policies and rising consumer awareness of reducing bag usage
• Increased procurement costs and lower gross margin due to yen depreciation and elevated raw material (paper, pulp) prices
• Increased SG&A expenses due to continued rises in logistics costs and labor costs (base pay increases)
• Intensifying competition with competitors and alternative materials (plastic, non-woven fabric, etc.)
• Risk of deteriorating performance and declining demand due to rising procurement costs among key customers (restaurants, retailers)
• Raw material supply constraints and price surges due to geopolitical risks such as the Middle East situation