Nippon Paper to cut local production, increases stake in Chinese firm

To boost profitability, Nippon Paper Group Inc. will cut production capacity at its domestic printing and business paper segment but will beef up overseas operations. The paper producer will close all its machines at the Fuji mill in Shizuoka Prefecture in Japan. The company will also mothball machines with high manufacturing costs in its other facilities including the ones in Ishinomaki, Iwanuma. By September 2012, it will pull the plug on a total of 12 machines in five facilities. The move will reduce paper production capacity by 800,000 tons or 15%. The decision was reached following a supply glut in the domestic paper market. Since the financial crisis in fall 2008, Japanese demand for paper took a nosedive. Last year, total domestic shipments and imports reached almost 9.84 million tons, 16% lower than in 2007. Nippon Paper will increase its stake in China’s Lee & Man Paper Mfg Ltd. To 15.3%, up from 11.7%. (August 4, 2011)