ENVALITH
日本紙パルプ商事株式会社 logo

Japan Pulp & Paper Co., Ltd.

8032・Prime Market・Wholesale Trade

Official website
日本紙パルプ商事株式会社 logo
Japan Pulp & Paper Co., Ltd.8032

Business

Nippon Paper Industries Trading Co., Ltd. (OVOL Group) is the largest company in the paper distribution industry, with a history dating back to its founding in 1845. The group comprises 132 companies in total—the company itself, 110 subsidiaries, and 21 affiliates—and operates five segments centered on domestic and overseas Paper & Paperboard Wholesale (Overseas): Paper Processing (corrugated cardboard and recycled household paper), Environmental Raw Materials (waste paper, pulp, and renewable energy), and Real Estate Leasing. Overseas, the group operates leading paper trading companies with proprietary inventory and logistics capabilities across 11 or more countries, including the United States, the United Kingdom, Germany, France, Oceania, and Asia, building a global platform. Major customers span a wide range of industries, including printing, publishing, packaging, pharmaceuticals, cosmetics, and electronic components manufacturers.

Business Model

The company's core earnings derive from a trading company-style model based on domestic and overseas paper and paperboard wholesale (accounting for the majority of revenue of ¥606,779 million). In addition, it has built a vertically integrated structure spanning waste paper collection through papermaking, processing, and distribution within the group, achieving high profitability with a 14.1% ordinary income margin in the Paper Processing segment. The Environmental Raw Materials segment secures stable earnings through the Waste Paper Recycling Business and renewable energy power generation (utilizing FIT). Real Estate Leasing generates stable profit from rental income on properties in central urban areas.

Company Strengths

Operates leading paper trading companies with proprietary inventory and logistics capabilities in more than 11 countries, including the United States, the United Kingdom, Germany, France, Oceania, Hong Kong, Singapore, Malaysia, and India. In November 2024, five subsidiaries in Germany and France were consolidated into the group, expanding overseas wholesale revenue to ¥338,078 million (up 22.7% year on year). The company continues to pursue complementary M&A, expanding its share and business scope in each market.

Built a business structure that covers everything from waste paper recycling (centered on the nationwide network of Fukuda Sansho) to paper manufacturing (corrugated cardboard base paper and household paper), processing, and distribution within the group. The Paper Processing segment maintains high profitability, with revenue of ¥51,409 million and ordinary income of ¥7,260 million (ordinary income margin of 14.1%). The use of self-generated energy from wood biomass power generation also contributes to cost competitiveness.

In the Recycled Household Paper Business, the company holds the Corelex Group (now JP Corelex Holdings) under its umbrella, establishing itself as the leading company in the field. It possesses recycling technology for hard-to-recycle waste paper, achieving differentiation through advanced recycling technology. In the Corrugated Cardboard Business, the company has built a comprehensive packaging supplier structure in Japan and Indonesia, maintaining stable production and supply.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue expanded to ¥606,779 million (up 9.4% year on year), while operating profit fell to ¥10,848 million (down 28.0% year on year) and profit attributable to owners of parent declined to ¥4,720 million (down 37.6% year on year), marking the third consecutive year of profit decline. Against the quantitative target of consolidated ordinary profit of ¥22,000 million set for the final year of the "Mid-Term Plan 2026" (Chuki 2026), actual results came in at ¥10,887 million, a significant shortfall. Business structure improvement expenses of ¥2,464 million and impairment losses of ¥1,776 million (of which ¥1,437 million related to goodwill at the German subsidiary) weighed on profit, making the achievement of earnings recovery an urgent priority.

The Overseas Wholesale segment fell into an ordinary loss of ¥549 million in FY2026 (ending March 2026), compared with ordinary profit of ¥3,195 million in the previous period. Recovery in the business environment at the German subsidiary was delayed more than expected, while in the UK and Oceania, declining sales prices compounded with foreign exchange losses. For FY2027 (ending March 2026 [sic; ending March 2027]), the company forecasts a return to profitability in this segment with ordinary profit of ¥4,200 million; however, amid continuing structural headwinds from the external environment of shrinking paper demand in developed countries, whether the review of unprofitable transactions at the German subsidiary and the effects of business structure reform will materialize as planned is the focal point of assessment.

The consolidated earnings forecast for FY2027 (ending March 2027) calls for a substantial recovery, with operating profit of ¥15,500 million (up 42.9% year on year), ordinary profit of ¥15,000 million (up 37.8% year on year), and net income of ¥8,000 million (up 69.5% year on year). This is premised on increased profits in Paper Processing, Environmental Raw Materials, and Domestic Wholesale, as well as a return to profitability in Overseas Wholesale. Meanwhile, one-time costs associated with the head office relocation are also anticipated, and external risks such as persistently high fuel, electricity, and labor costs, as well as foreign exchange fluctuations, remain. Given the shortfalls against plan in the past two periods, the likelihood of achieving this forecast warrants careful and cautious assessment.

Growth Strategy

Aiming to become the "world's strongest paper distribution corporate group" through global expansion via M&A and deepening of the circular business model

The company aims to achieve a turnaround to ordinary income of ¥4,200 million in the Overseas Wholesale segment in FY2027 (ending March 2027), driven by the effects of reviewing unprofitable transactions and restructuring operations at its German subsidiary. Under UK-based Premier, the company made PPB Ltd (sign & display) a subsidiary, aiming to expand sales of high value-added products through cross-selling synergies.

The company aims to achieve ordinary income of ¥7,800 million in the Paper Processing segment in FY2027 (ending March 2027), driven by increased sales volume and higher average selling prices in the Corrugated Cardboard Business, as well as continued penetration of price revisions in the Recycled Household Paper Business. In response to persistently elevated fuel, electricity, and labor costs, the company will continue to promote efficiency measures such as productivity improvements and cost reductions.

The company aims to achieve ordinary income of ¥1,500 million (up 167.4% year on year) in the Environmental Raw Materials segment in FY2027 (ending March 2027), driven by increased handling volume from the new operation of a third yard in Malaysia for wood biomass fuel, securing processing volume and higher unit prices in the Comprehensive Recycling Business, and development of new suppliers mainly in the Chubu region for the waste paper business.

Under the policy of "progressive dividends targeting a consolidated payout ratio of 30% or more and DOE of 3% or more," the company plans an annual dividend of ¥34 per share (payout ratio of 86.1%) for FY2026 (ending March 2026) and ¥36 for FY2027 (ending March 2027). In FY2026 (ending March 2026), the company conducted share buybacks totaling ¥8,920 million, reducing the number of shares outstanding from 150,215,510 to 120,215,510.

Against the backdrop of a buoyant real estate market, the appraised value of major held properties has risen significantly, and the company is considering potential sales with a view to improving capital efficiency. Under the policy of reducing cross-shareholdings, the balance sheet value was reduced to ¥22,228 million as of the end of FY2026 (ending March 2026), a decrease of ¥3,302 million year on year.

Last updated: July 19, 2026