ENGLISH TRANSLATION FOR REFERENCE PURPOSE ONLYThis notice is an English translation of the original Japanese text of the news release statement dated October 1, 2018 issued by
Daio Paper Corporation, and is for reference purposes only. In the event of any discrepancy between the original Japanese text andthis English translation, the Japanese text shall prevail

October 1, 2018
Daio Paper Corporation

Daio Paper Corporation (Address: Chiyoda-ku, Tokyo) hereby announces that it is set to issue
green bond.
Green bonds are bonds that align to the Green Bond Principles set by the International CapitalMarket Association (ICMA), and refer to bonds that companies, municipalities and otherorganizations issue to procure funds exclusively for projects aimed at solving environmental
problems (“Green Projects”).
This green bond issuance will be the first such issuance in the papermaking industry and thepersonal care industry in Japan.
■ Daio Paper Green BondThe Daio Paper Group’s management philosophy, “Shaping an Abundant and Affable Future forthe World”, contains the Group’s desire to bring about a compassionate future that provides“abundant and affable” lifestyles for people around the world through its business activities.
The Group is working towards the realization of this management philosophy in unity, with afocus on the four pillars: “Dedication to Manufacturing”, “Bonds with Local Communities”,“Corporate Culture Providing Safety and Motivation to Work”, and “Contribution to the GlobalEnvironment”.
In particular, as regards “Contribution to the Global Environment”, the Group has been
advancing initiatives to reduce its environmental burden: high usage of recovered paper, effective
use of biomass energy, promotion of energy conservation, and more. The Group aims to contributeto the formation of a sustainable recycling-based society through business activities that are inharmony with the global environment.
In line with the Group’s management philosophy and aim, the proceeds of the green bonds willbe allocated to the following Green Projects: “Facility for the effective use of hard-to-recycle
recovered paper（※1）”, and “Biomass power plant (boiler) fueled by black liquor（※2）, a waste
product of the kraft pulping process”.

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■ Outline of Green Bond
◇Amount of Issuance◇Tenor◇Date of Issuance◇Use of Proceeds::::

Approximately 10 billion yen
UndeterminedOctober 2018 (scheduled)(1) Facility for the effective use of hard-to-recycle recovered paper(2) Biomass power plant (boiler) fueled by black liquor: Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.,◇Lead Managers
Daiwa Securities Co. Ltd.
◇Green Bond Structuring Agent（※3）:
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
:
◇Second Party Opinion
Daio Paper received second party opinion from an external review agency, DNV
GL Business Assurance Japan K.K., to ensure the eligibility of the green bond.
The expenses required for the acquisition of external review for the green bond are eligible forsubsidies under the Japanese Ministry of the Environment’s FY2018 Financial Support
Programme for Green Bond Issuance （※4）.
This will be the second green bond issuance in the Japanese manufacturing industry.
■Green Projects(1) Facility for the effective use of hard-to-recycle recovered paper （ ※ 1 ） /Total investments: Approximately 16 billion yen
One of the many strengths of Daio Paper’s Mishima Mill is its recovered paper sorting andpulping technology. Daio Paper will make use of this domestically leading technology andexpand its facility for the effective use of hard-to-recycle recovered paper. Going forward,Daio Paper aims to develop this technology further and increase its usage of hard-to-recycle
recovered paper to 30% of the total amount of recovered paper used in the production ofcontainerboard.
【Project Outline】◎It will conduct a retooling of the current facility and install a new machine for the reuse ofhard-to-recycle recovered paper as the raw material of containerboard and others.
◎Also, it will burn residual waste, such as vinyl, arising from the recycling process ofhard-to-recycle recovered paper as fuel, and make use of the resulting heat energy togenerate electricity as well as in the papermaking process.
◎By conducting material recycling and thermal recycling as stated above, it is projected thatthe following benefits will occur:
1) Reduction of waste materials
Daio Paper will make use of hard-to-recycle recovered paper, which has been difficult
for standard facilities to reuse, thus reducing the amount of waste materials.
22) Reduction of CO2 emissions
The reuse of hard-to-recycle recovered paper, which would otherwise be incinerated,
will lead to the reduction of CO2 emissions that would be generated from the incineration
process.
Also, using residual waste as fuel for power generation will reduce the amount of fossil
fuels necessary for power generation.
(2) Biomass boiler fueled by black liquor（※2）/
Total investments: Approximately 21 billion yen（※5）
To establish a foundation to support sustainable growth, Daio Paper will commit to biomass
power generation initiatives that utilize the FIT scheme as part of its Third Medium-term Plan.
Going forward, the Daio Paper Group will continue to work on initiatives to reduce its
environmental burden through the effective use of renewable energy.
【Project Outline】◎Daio Paper will install a new biomass boiler that uses black liquor, a waste product fromthe kraft pulping process, as fuel.
◎The boiler to be installed will use 100% (※6) black liquor, a type of biomass fuel.
◎The launch of the biomass boiler is projected to bring about the following environmental
benefits:
1) Reduction of CO2 emissions
Power generation using biomass fuels produces less CO2 emissions than power
generation using fossil fuels.
Conceptual rendering of the boiler when completedThis news release is provided for the sole purpose of conveying information regarding theCompany’s issuance of securities, and not for the purpose of soliciting investment or engaging inany similar activities, within or outside Japan.
3For inquiries regarding this news release, please contact:
Ikawa and SanoFinance Department, Business Administration Division, Daio Paper Corporation
TEL: 03-6856-7515※1: Hard-to-recycle recovered paper refers to recovered paper, which is particularly difficult to process for reuse, within unsorted
recovered paper that has vinyl and other materials attached to it. This is an original term established by Daio Paper.
※2: Black liquor is a type of biomass fuel that is a concentration of liquid waste (derived from wood resin) produced during theprocess of turning woodchips into pulp.
※3: Green bond structuring agent is a party that provides support for the issuance of green bonds, such as providing advices forestablishing green bond framework and the acquisition of second opinion.
※4: The Financial Support Programme for Green Bond Issuance is a programme that subsidizes the expenses required byregistered issuance supporters to support companies, municipalities and other bodies who seek to issue green bonds, such as
in the form of granting external reviews and providing consultation on establishing green bond frameworks. An eligible
green bond is one which will allocate all proceeds from the issuance of the bond exclusively to Green Projects, and whichmeets all of the following criteria at the time of issuance:(1) Projects must meet either one of the following criteria at the time of bond issuance:① Projects contribute mainly to decarbonization in Japan (renewable energy, energy conservation, etc.)

 Equal to or more than half of the proceeds, or equal to or more than half of the number of projects contribute todomestic decarbonization② Projects contribute greatly to decarbonization and local economy vitalization

 Decarbonization: Projects which will receive less than a specified amount of subsidy per ton of CO2 emissions
reduced in Japan Local economy vitalization: Projects which will contribute to the vitalization of the local economy in accordance withordinances or plans set forth by the municipality; projects for which funding from municipalities can be expected(2) Green bond framework is confirmed by an external review agency before bond issuance to comply with the Green BondGuidelines(3) Bonds are not “green wash bond”※5: Of the total investments of approximately 21 billion yen, 9 billion yen was procured through the euroyen zero coupon
convertible bonds due 2020 issued in September 2015.
※6: Fossil fuels to be used only during startup and shutdown of facility.

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