Corporate Report 2017

Mitsubishi Paper Mills Ltd.

Editorial Policy

Table of Contents

Mitsubishi Paper Mills publishes the Mitsubishi Paper Mills Corporate Report to provide stakeholders with abetter understanding of the Group's overall business activity
In these pages, we report on the Mitsubishi Paper Mills Group's corporate value building activities, whichseek to bring about a more sustainable society.

To Our Stakeholders
Editorial Policy････････････････････････････････････1

Fair Competition ････････････････････････････33

Our Website ･･････････････････････････････････････ 1

Preventing Corruption ･･･････････････････････ 33■ ScopeTable of Contents･････････････････････････････････ 2

Promoting Social Responsibility
in the Supply Chain ･･･････････････････････ 33

In principle, the companies included are Mitsubishi Paper Mills and its consolidated subsidiaries (19 companies in Japan and 7
companies overseas), as well as its equity-method affiliates (2 companies in Japan, 1 company overseas).
Specific mention is made for companies outside the scope.

Message from the President ･･･････････････････････ 3■ Reporting Period

Consolidated Financial and Non-Financial Highlights･･ 7

The reporting period is fiscal 2017 (April 1, 2016 to March 31, 2017), with some content falling outside this period.

■ Guidelines Referenced

Management Measures ･･･････････････････････････ 5

Special FeatureSpecial Feature 1: Launch of Joint Biomass Energy
Business ･････････････････････････････････････････ 9

ISO 26000
GRI Sustainability Reporting Guideline, 4th Edition
Environmental Reporting Guidelines (2012 Edition), Ministry of the Environment

Special Feature 2: Mitsubishi Paper Mills Group
Companies— KJ SPECIALTY PAPER Co., Ltd. ･････ 11

Our Website
The Mitsubishi Paper Mills website provides a range of information on subjects that include CSR and the environment,
investor relations, products and services, research and development, basic data on the company, and hiring.

■ CSR / Environment

CSR reports, corporate reports
https://www.mpm.co.jp/eng/env/index.html■ Investor Relations

Chemical Substance Management ･･･････････ 35
Preventing Global Warming ･････････････････ 36
Preserving Biodiversity ･･････････････････････ 37

Mitsubishi Paper Mills Group Business Sites ･･････ 15

Relationship with Employees ････････････････ 41

Overview of Business Segments ･･････････････････ 17

Occupational Safety and Health Initiatives ･････ 41

Printing Paper Business ･････････････････････････ 17Efforts to Create Comfortable Work
Environments･･･････････････････････････････42

Mitsubishi Paper Mills Group CSR･････････････････25
The Way We See CSR ･･･････････････････････････25
Basic Policies for CSR Activities, and Key Issues(Material Issues) ･･･････････････････････････････ 26

https://www.mpm.co.jp/eng/rd/index.html, etc.

Environmental Management Structure ･････････ 35

Environmental Indicators ････････････････････ 40

Mitsubishi Paper Mills Group CSR■ Research & Development

Relationship with the Environment ･･･････････ 35

Mitsubishi Paper Mills Group Products ････････････ 13

Research and Development ･･････････････････････ 23https://www.mpm.co.jp/eng/products/index.html

Responsible Raw Material Procurement ･･･････ 34

Effectively Utilizing Resources ･･･････････････ 38

Speciality Materials Business ･････････････････････ 21■ Products and Services

Disavowal of Anti-Social Elements ････････････ 33

Business Activities ofthe Mitsubishi Paper Mills GroupImaging Media Business ････････････････････････ 19

Annual Business Reporthttps://www.mpm.co.jp/eng/ir/library/annual-business-report.html
Mid-Term Management Plan
https://www.mpm.co.jp/eng/ir/library/midplan.html
Annual reporthttps://www.mpm.co.jp/eng/ir/library/annual-report.html

Fair Operating Practices ･･････････････････････33

Corporate Governance ･･･････････････････････････ 27
Basic Policies on Corporate Governance ･･･････････27
Overview of Corporate Organizations･･････････････ 27
CSR Promotion Structure･････････････････････････ 28
Compliance ････････････････････････････････････ 28

Ecobalance ････････････････････････････････39

Relationship with Customers ････････････････ 43
Quality Control System ･･････････････････････ 43
Product Safety Control System ･･･････････････ 43
Communication with Customers ･･････････････ 44
Encouraging the Worry-Free Use of
Our Products ･･････････････････････････････ 44
Relationship with Communities ･･････････････ 45
Communication with Community Members･････ 45
Philanthropic Expenditures ･･･････････････････48
Fiscal 2017 Activity Results･･･････････････････49
Fiscal 2018 Action Plan ･･････････････････････ 51
Company Profile and Corporate Data ･････････ 53

Risk Management･･･････････････････････････････ 29
Information Disclosure ･･････････････････････････ 30
Company Executives ･･･････････････････････････ 32

Cover photo: Tree planting event at a company-owned forest in Murabi (Fukushima Prefecture)

1 Mitsubishi Paper Mills Corporate Report 2017 Editorial Policy・Our Website

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三 Mitsubishi Paper Mills Corporate Report 2017 Management Measures 2

Message from the President■ Guided by the corporate philosophy of the Mitsubishi Paper Mills Group, we will build asolid business foundation unaffected by changes in the external environment and makeMitsubishi Paper Mills Group Corporate Philosophy

efforts to improve corporate value.

■ We will conduct distinctive CSR activities that leverage the Mitsubishi Paper Mills Groupbusinesses, and will work to fulfill our responsibility to society while contributing to a

A corporate groupthat lives up to the trustof its customers
in the world market

sustainable society.

A corporate groupthat is always
on the leading edgeof technology

A corporate groupthat contributes
to preserving
the global environmentand creatinga recycling society

Kunio Suzuki,

President andChief Executive Officer

We aim to contribute to society by pursuing the world market,
technological capabilities, and the global environment.

Aims of the Mitsubishi Paper Mills Group

Contributing through CSR Activities

Throughout its 119 years of history, the Mitsubishi Paper Mills Group with its challenging spirit andtechnology conscious mind-set has been contributing to furthering information culture by providing society
with high value-added products that continually satisfy the needs of the times. In addition to printing andcommunication paper, our business now involves a range of media for a variety of recording methods that
include magnetic, digital photography, silver halide photography, and inkjet printing. These efforts have seen
us grow into a unique corporate group.
Now, the environment surrounding our business — in politics, the economy, society, and technology — ismoving tumultuously and not showing any direction. Amid this rapidly changing macro environment, webegan carrying out the Second Mid-Term Management Plan in April 2016. With "stabilization of profit throughalliances" as a keyword, the plan is focused on building a solid business foundation unaffected by changes inthe external environment, and we are now strongly promoting a number of measures.
To keep fulfilling our obligations to society while contributing to its betterment, we are focused oncontinuously improving corporate value in line with our corporate philosophy of "we aim to contribute tosociety by pursuing the world market, technological capabilities, and the global environment." We hope tohave your continued and ever-increasing support in these endeavors.

Ten years have passed since the Mitsubishi Paper Mills Group began conducting CSR activities in 2007.
We understand the objective of CSR to be improving corporate value through gaining the trust andunderstanding of our stakeholders. Therefore, these 10 years has seen us conduct distinctive CSR activities
that leverage the Group's lines of business and corporate resources to solve a variety of problems. In fiscal
2017, we made “ensuring the effectiveness of corporate governance” and “enhancing activities to ensure
safety and health" our top priority issues. We also worked to offer more environmentally conscious products,
including FSC-certified paper, which helps preserve forests, and the Thermal DigiPlate System, which
reduces environmental impact.
In fiscal 2018, we have been listening to the suggestions of our stakeholders while considering the Group'sbusiness environment and conditions, and have put forth “ensuring product quality” and “enhancing activities
to ensure safety and health” as our two top priority issues. "Ensuring product quality" will support efforts tostrengthen alliances, a core objective of the Second Mid-Term Management Plan. "Enhancing activities toensure safety and health" is an effort to "further strengthen safety measures in the manufacturing industry,"
an initiative currently being jointly pursued by government and private enterprises. In the days ahead, we willcontinue to actively communicate with our stakeholders as we fulfill our responsibilities to society and work
towards making a more sustainable society.

3 Mitsubishi Paper Mills Corporate Report 2017 Message from the President

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Mitsubishi Paper Mills Corporate Report 2017 Message from the President 4

Management Measures
Improving our profit base

The Second Mid-Term Management Plan
In order to deal with a business environment that is expected to become increasingly more severe in
coming years, we formulated the Second Mid-Term Management Plan (April 2016 to March 2019) with its
emphasis on "stabilization of profit through alliances." Based on this, we are proceeding to build andstrengthen an earnings structure that cannot be easily affected by the external environment. In fiscal 2017,
the first year of the plan, we were in line with the plan in terms of profit and loss.

Second Mid-Term Management Plan Basic Principles and Efforts Being Made

1 Structural reform of the printing paper business

2 Improving profit base・Strengthen our alliance with Fujifilm Corporation to build an efficient
production structure.
・Improve the profit base business by effectively using the business superiorityand positioning of Mitsubishi Paper Mills.

3 Developing new businesses
・Launch a biomass energy business in collaboration with Oji Group.
・Strategically develop new businesses.
・Make careful strategic and selective investments in the focus fields.

business foundation and financial
4 Strengthening
ground that will support the Group’s earning power
・Work on the reconstruction of business processes and IT infrastructure toreform the Group’ s business structure.
・Promote further reduction of interest bearing debts, which we have reduced
to the level they were at before the Great East Japan Earthquake, and thus
strengthen the Group’ s financial base.

Stabilize profit through alliances

・Achieve a stable earnings structure not affected by the external environment
through structural reform and strengthening our alliance with Oji Group.
・Optimize our distribution and logistics systems.

In the Imaging Media Business, we are strengthening business foundations by leveraging alliances and are taking ourbusiness to overseas markets and thereby making further improvements to existing products that are in the process of maturing.
The Speciality Materials Business is focused on expanding sales in Asian countries, in particular China, and in the U.S. andEurope through leveraging our positioning in the market and growing steadily in non-woven fabric, rewritable media, and othersegments.

Developing new businesses
We are expanding our business in markets new to us by stepping into growing areas such as functional films, based on
imaging technologies, digital textile inkjet printing transfer paper, and by making the most of the superior quality of our battery
separators. In particular, with respect to functional films, we have recently decided to install equipment dedicated to this purposeat the Kyoto Mill.
We are also looking to strengthen the profit base of our Hachinohe Mill. To this end, we are working with the Oji Group toestablish a biomass energy business, and starting construction of a power plant which is scheduled to start operating in July2019.
We have also reached an agreement to launch a household paper business in conjunction with the Oji Group at theHachinohe Mill, and are now taking steps towards starting operations in 2019.

Strengthening the business foundation and financial basethat will support the Group’ s earning power
We have built a project system and are making progress towards its goal of rebuilding our business processes and IT
infrastructure. The end of period outstanding interest-bearing debt and debt/equity ratio targets in the Second Mid-Term
Management Plan have been reached ahead of plan.
We will continue to focus on achieving the final targets defined in the Second Mid-Term Management Plan.

Improving Corporate Value

Second Mid-Term Management Plan
Stabilization of Profit
through Alliances■ Structural reform of the printing paper
business■ Improving profit base

Reform the printing paper business structure
Along with strengthening our alliances and stabilizing sales volume by both increasing sales of communication paper andexpanding exports, we are focused on making our supply chain more efficient — that is, streamlining our distribution andlogistics systems, from production sites to sales outlets — as a means to build a stable earnings structure that is not affected byexternal environment.
In our German business, we are beginning to see the effects of earnings-focused sales and cost reductions, and are planning
further alliances in the global market.

5 Mitsubishi Paper Mills Corporate Report 2017 Management Measures■ Developing new business■ Strengthening the business foundationand financial base that will support theGroup’s earning power

Enhancing CSR Activities
The Five Basic Policies■ Strengthening our CSR managementfoundation■ Promoting environmental management■ Raising customer satisfaction levels bycarefully addressing user needs■ Taking further measures to provide our
employees with a pleasant working
environment■ Promoting activities that contribute tosociety

Mitsubishi Paper Mills Corporate Report 2017 Management Measures 6

Consolidated Financial and Non-Financial Highlights
The fiscal year runs from April 1 to March 31.

Fiscal Year

2013

2014

2015

2016

2017

Sales

(millions of yen)
300,000

Operating income(millions of yen)
5,000

4,313

4,500

Profit and loss (millions of yen):

250,000

200,850

207,470

214,944

216,340

201,955

Operating income

3,332

473

1,038

3,872

4,313

Net income (loss)

2,663

62

135

2,216

2,703

Profit attributable to shareholders of parent company

1,710

280

△4,272

2,217

1,152

Capital Investment

6,752

6,322

4,369

4,798

5,995

Net sales

200,850

200,000

201,955

3,000
150,000

2,500
2,000

100,000

1,500

7,269

12,222

3,907

12,626

19,839Cash flows from investing activities△12,182△433△1,168△2,145△7,070

0

2013

2014

2015

0

2017(FY)

2016

Outstanding interest-bearing debt and D/E ratio

Shareholders’ equity

Per-share information*1 (yen):
Earnings per share (EPS)
Book-value per share (BPS)Management indicators:

2,652

2,586

2,535

2,412

2,359

1,553

1,490

1,448

1,388

1,257

525

528

520

492

544

50.01

8.21

△124.96

64.85

33.72

1,536.28

1,543.13

1,521.56

1,440.45

1,591.00

1.7

0.2

0.5

1.8

2.1

Overseas sales ratio (%)

30

29

31

31

30

Equity capital ratio (%)

19.8

20.4

20.5

20.4

23.1

Return on equity (ROE) (%)*2

3.4

0.5

△8.2

4.4

2.2

D/E ratio*3

2.9

2.8

2.8

2.8

2.3

14,469

11,687

11,993

14,534

14,767

Non-financial data:

4,133

3,982

3,622

3,697

3,734

Employment rate of people with disabilities (%)

2.24

2.16

2.45

2.32

2.17

Industrial property rights

1,543

1,530

1,420

1,607

1,639

CO2 emissions*5 (1,000 tons)

999

946

947

959

957

CO2 emission intensity*5 (in tons / ton of product)

1.05

1.05

1.06

1.04

1.04

Employees*

※1
※2
※3
※4
※5

4

Outstanding interest-bearing
debt (100 millions of yen)
2,200
2.9
●
2,000
2.8
●
1,800
1,600

1,553

1,490

D/E ratio (multiple)
3.0
2.8

A one-for-10 reverse stock split of common stock went into effect October 1, 2016.
Calculations assume this reverse stock split occurred at the beginning of fiscal 2013.
Return on equity (ROE) = Profit attributable to owners of parent / (net assets - non-controlling interest)
D/E ratio = Interest-bearing debt / Shareholdersʼ equity
Employees denotes full-time employees and does not include temporary workers
Scope of calculations: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Speciality Materials R&D Laboratory,
Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd., KJ Specialty Paper

7 Mitsubishi Paper Mills Corporate Report 2017 Consolidated Financial and Non-Financial Highlights

2.9

2.8

2.8

●

●

2.7

1,448
1,388

1,400

Operating income margin (%)

EBITDA (millions of yen)

473

500

Cash flows from operating activities

Outstanding interest-bearing debt

1,038

1,000

Cash flows (millions of yen):

Total assets

3,332

3,500

50,000Financial position (millions of yen):

3,872

4,000

216,340

214,944

207,470

1,257

2.5

1,000

2.4
2.3

●

2014

2015

Shareholders’ equity and ROE

Shareholders’ equity(millions of yen)
550
540
530

●

●

528

525

●

●

0.5

2.3

2.1

470

-1.0

2016

Outstanding interest-bearing debt

2017(FY)
●

-5.0
-7.0

460

2013

Employment rate of people with disabilities

2015

2016

2.45
●

2.24
●

2.16

CO2 emissions and emission intensity

Emission intensity(tons / ton of product)
1.08

1,000

◆

1.06

2.17
●

◆

◆

◆

980

◆

●

1.05

●

●

1.05

960

1.5

2013
●

2014

1.06

●

●

2

-9.0

999

2.32
●

2017(FY)

ROE●

Emissions (1,000 tons)
1,020

2.5

1

2014

-8.2

Shareholders’ equity

D/E ratio

（％）
3

-3.0

492

●

2.0

3.0
1.0

490

400
2015

2.2

520

500

480

2014

544

510

2.2

2013

ROE（％）
5.0

4.4

3.4

520

600

200

2017(FY)

2016

2.6

1,200

800

2013

2015

Mitsubishi Paper Mills

2016◆

2017(FY)
Statutory employment rate

940

2013

946

947

2014

2015

Emissions

●

●

1.04

1.04

959

957

2016

2017(FY)

1.04

1.02

1.00

Emission intensity

Mitsubishi Paper Mills Corporate Report 2017 Consolidated Financial and Non-Financial Highlights 8Special Feature 1 : Launch of Joint Biomass Energy Business
When Japan was beset by power shortages in
the wake of the Great East Japan Earthquake, theHachinohe Mill made the restoration of thedamaged in-house power plant its top priority andwas one of the first to provide electricity to utility
companies.
We have since been in the business of sellingelectricity using our spare capacity. Now, we areplanning to launch a full-scale renewable energy
business in conjunction with the Oji Group that willentail building one of Japan's largest biomass
power plants at the Hachinohe Mill site.

About the Hachinohe Eco-Energy Power Plant
The Hachinohe Eco-Energy Power Plant will be built at the Hachinohe Mill site, with a layout that takes advantage of thestrengths of an oceanfront mill. The facility will use the latest circulating fluidized bed boilers and will burn wood chips and palm
kernel shells (PKS) for fuel. Its planned power output will be among the largest of all biomass power plants in Japan.
Power plant operation and maintenance will be handled by Mitsubishi Paper Mills. Fuel will be procured by Oji Green
Resources Co., Ltd. and the Oji Group from overseas, and the Hachinohe Mill's chip transport equipment and the loading,unloading, and transport capabilities of the Port of Hachinohe will be fully used.
The plant is also expected to create jobs in, and stimulate, the local economy.

3D CG showing completed plant
Hachinohe Mill’ s in-house power plant■ Boilers(1) Manufacturers
JFE Engineering Corporation
and VALMET(2) Evaporation capacity: 265 t/h

Biomass Energy Business in Conjunction with the Oji GroupThrough joint investment with Oji Green Resources Co., Ltd., which has superior expertise in operating a power generation
business and procuring fuel, we will make the most of the excellent location of the oceanfront Hachinohe Mill and our power
plant operation capabilities to operate a competitive joint biomass energy business making use of the renewable energy
feed-in-tariff.

■ Turbine generators(1) Manufacturers
Kawasaki Heavy Industries, Ltd.
and TOSHIBA MITSUBISHI-ELECTRIC
INDUSTRIAL SYSTEMS CORPORATION(2) Output: 74,950 kw

Mitsubishi Paper Mills
・Excellent location of an oceanfront mill・Power plant operation capabilities andexpertise as a paper manufacturer

Strengthening
the profit base of
the Hachinohe site

Oji Green Resources Co., Ltd.

Expected start of business
July 2019

Business progress
MPM OJI Eco-Energy Co., Ltd. was established on March 1, 2016 to run a biomass energy business. Orders were placed forall major equipment and major construction, and construction began in May 2017.
Construction work is currently under way aiming for beginning trial operation in February 2019 and full-scale operation in July
2019.

・Expertise in operating an energy business

Explanation of terms

and procuring fuel＊What is PKS (palm kernel shell)?

PKS refers to the kernel shells that are left after
extracting palm oil from palm kernel seeds. Since these
are a form of agricultural residue, using these as fuel isan effective use of a resource.

Overview: Utilizing a feed-in-tariff●Company: MPM OJI Eco-Energy Co., Ltd.

＊What is a feed-in-tariff for renewableenergy?

(Mitsubishi Paper Mills' stake: 45%, Oji Green Resources' stake: 55%)

●Location: Premises of Mitsubishi Paper Mills' Hachinohe Mill

It is a mechanism whereby a utility company purchases
electricity generated from renewable sources at a fixedprice for 20 years as a means to promote greater use ofrenewable energy.

●Sales: About ¥11 billion●Investment amount: ¥24 billion(boilers, turbines, and other major equipment are leased)
Power plant groundbreaking ceremony (May 9, 2017)

9 Mitsubishi Paper Mills Corporate Report 2017 Special Feature 1

Mitsubishi Paper Mills Corporate Report 2017 Special Feature 1 10

Special Feature 2: Mitsubishi Paper Mills Group Comp anies —KJ SPECIALTY PAPER Co., Ltd.
Manufacturing specialty paper essential to the development ofindustry and used the world over.
With its head office and factory located in Fuji City, KJ
Specialty Paper has been engaged in the research anddevelopment of specialty paper for over 70 years, and hasbrought the world unique products with high added value.
Its products are used for a broad range of applications that
include building materials, industry, and medicine. The
company has maintained a steady focus on leveraging
Mitsubishi Paper Mills' strengths to develop special
products that have been well received overseas, too, andhas increased its overseas sales ratio year after year. In
the months and years ahead, KJ Specialty Paper will work
to enhance its lineup of competitive products made withadvanced technologies while aggressively seeking to
expand business overseas.

Base paper for wallcoverings

KJ Specialty Paper head office and mill (boxed area)

Papermaking Technologies

Impregnation andCoating Technologies●Papermaking technologies to produce
papers containing pigments, non-woodfibers, synthetic fibers, inorganic fibers,
and decorative materials●Impregnation and coating technologies
to impart additional function such as
water- and solvent-resistance, andstrength

Quality Control●Tens of thousands of color recipes anda production management and quality
control systems that makes possible astable supply of these colors

Decorative laminate base paper used for furniture and fitted kitchens(boasting a high market share in Japan)

Impregnated paper for Impregnated decorative papers that are used in furniture and other products andthat provide printability, delamination resistance, water resistance, and other qualities
building materials

KJ Specialty Paper's business model provides products that leverage core technologies, such as papermaking, impregnation,
coating, laminating, and dispersion, to achieve a stable standard of quality while meticulously satisfying the wide range ofcustomer needs.

●Dispersion technologies used for
applications such as highly-concentrated
carbon nano-tube dispersion liquids

KJ Specialty Paper provides specialty paper essential to a wide range of industrial applications that include building materials,
automobiles, electrical equipment, and medicine. To remain a value generating company that accommodates the diverse needsof our customers around the world, we are continuously engaged in research and development aimed at further improving thepotential of paper.

Decorative laminatebase paper

KJ Specialty Paper's Strengths

Dispersion Technologies

KJ Specialty Paper's Signature Products

KJ Specialty Paper's
Strengths

Base paper that meets quality requirements for wall covering manufacturing and installation

Masking tape backing

Base paper for masking tape, used in coating and other processes forautomobiles and buildings

Medical grade paper forsterilization

Base paper for medical packaging; is designed to let in gases and vapor used insterilization while keeping bacteria out

Backing materials for
TDDS

Backing materials used in transdermal drug delivery systems;
Drug Master File registered with US FDA

Koceranceramic sheets

Heat-resistant, fireproof ceramic fiber sheets consisting of thin layers of ceramic fibers

Lamination Technologies●Lamination technologies that allow theuse of thin materials and adhesives withstrong solvent resistance
Decorative laminate base paper

Foreign Substance Control●A clean facility and an online
contamination control system that makes
it possible to provide medical andelectronic materials

Small Lots andShort Lead Times

Product Development●Highly-accommodating manufacturing
and shipping systems that are exacting
in satisfying customer requests●A system for developing products
based on constant feedback from
customers

Masking tape backing

Medical grade paper for sterilization(base paper for medical packaging)

KoceranRecent topics

Carbon nano-tube (CNT) related products

After the discovery of carbon nano-tube by a Japanese physicist in 1991, we took
aim at a market need: that of the need for highly-concentrated dispersion media todeploy these to a wide variety of applications. This took the form of developing the
products below by adapting the dispersion technologies that constitute one of KJ
Specialty Paper's core technology categories. These products have been very wellreceived in numerous fields of industry related to electrical products, printing, andplastics, among others.

・KJ Carbon nano Liquid, a CNT
dispersion liquid

Neo Functional Material 2017
(CNT-related products)

・KJ Carbon nano Coating, a CNT
coating liquid
・KJ Carbon nano Sheet, a CNT sheet
・KJ Carbon nano Cloth, a CNT cloth

Medical materials

CNT dispersion liquids

Front: Casted film,
Back: Coated sheet

Mitsubishi Paper Mills had a display booth at Medtec Japan 2017, the largest
life-sciences exhibition in Japan, as a means to tell people about medical grade paperfor sterilization and backing materials for transdermal drugs made by leveraging thestrengths of KJ Specialty Paper. Going forward, we will focus even more on
developing medical material products.

11 Mitsubishi Paper Mills Corporate Report 2017 Special Feature 2

Medtec Japan 2017 medical
device exhibition

Mitsubishi Paper Mills Corporate Report 2017 Special Feature 2 12

Mitsubishi Paper Mills Group Products
Mitsubishi Paper Mills for High Grade and Information Media
Since its founding, the Mitsubishi Paper Mills Group has contributed to society through offering products
suited to the times by leveraging technical expertise on a base of customer trust and excellent performance. In
the digitally-oriented world of today, we aim to be known for our high-grade and information media throughbusiness conducted in Japan and other countries as a development-driven manufacturer.

Printing and Communication Paper
Since our founding in 1898, Mitsubishi Paper Mills has
been a comprehensive paper manufacturer providing
high-grade printing and communication paper.
We now provide paper suited to a wide variety ofneeds, contributing to society with products such as
printing papers including well known “New V Matt,” mattec oate d p a p e r , co m muni cati on papers i ncl ud in g
carbonless paper and thermal paper, and paperboard,
tissues, and toilet paper.

Speciality Materials
The products in our Speciality Materials business are made at three facilities. Water treatment membrane base substrate,
battery separators, and other non-woven fabric products and rewritable media are made at the Takasago Mill. Decorative
laminate base paper, masking tape backing, and other chemical paper products are produced at KJ Specialty Paper. And our air
filters for air purifiers and automotive air conditioning systems are manufactured in Zhuhai City, Guangdong Province, China by
our subsidiary Zhuhai MPM Filter, Ltd. (MFZ).
In our research division, we have developed and commercialized new separators that can withstand heat beyond 400°C, a
world-leading achievement in the field of separators for lithium-ion batteries — a product that must meet very demanding safety
requirements. We have also succeeded in developing highly-concentrated dispersion liquids of carbon nano-tubes (CNT) and weare incorporating them into thin film heating elements and other products.

RO membrane base substrate andRO film elements for home use

Digital Imaging
Mitsubishi Paper Mills is a unique paper manufacturing
company doing business in the field of digital imaging.
We are the world's only paper manufacturer with every
production process, starting from selection of the raw
wood, pulp production, papermaking, coating paper withresin, applying photosensitive materials, etc.
In the field of inkjet paper, we began research anddevelopment in the 1970s and have established aworldwide position as a top runner. And we are also asavvy player in the domestic printing business, whichallow us to develop unique and well appreciatedprepress-related products reflecting feedback fromprinting shops. We also develop medical devices bycombining the technologies we have built up throughphotosensitive materials and such over the years.

Nail-grooming gel for preventing hospital-acquired infections

13 Mitsubishi Paper Mills Corporate Report 2017 Products

Products made using paper products fromthe Printing Paper Business Division

Separators and battery packs for lithium-ion secondary batteries

Perfectly processless CTP & CTF System TDP-750
Rewritable thermal rewrite cards
Decorative laminate products that use decorative laminate base paper

Inkjet paper for photographs

Air filters for air purifiers, and humidification filters

Heating sheets using CNT coating liquids (red regions produce heat)
Mitsubishi Paper Mills Corporate Report 2017 Products 14

Mitsubishi Paper Mills Group Business Sites
Mitsubishi Paper Mills Group's Overseas Operations
The Mitsubishi Paper Mills Group does business around the world with production facilities in Japan,
Germany, and China and sales offices in Japan, Germany, the U.S., and Hong Kong.

Major production and
R&D facilities in Japan

Hachinohe Mill (MPM Operation Co., Ltd.)
Kitakami HiTec Paper Corp.
Toho Tokushu Pulp Co., Ltd., Kitakami Mill
Shirakawa Site (Hakuryo Paper Technology Co., Ltd.)
Process Development Laboratory
Toho Tokushu Pulp Co., Ltd., Oyama Mill

Mitsubishi Paper Holding (Europe) GmbH (Germany)
Mitsubishi HiTec Paper Europe GmbH (Germany)
Mitsubishi Imaging (MPM), Inc.
Bielefeld Mill(New York, USA)
Flensburg Mill
Zhuhai MPM Filter, Ltd. (Guangdong, China)
MPM Hong Kong Limited (Hong Kong, China)

Takasago Mill

Takasago Mill

Mitsubishi Paper Holding (Europe) GmbHAm Albertussee 1, 40549 Düsseldorf, Germany

555 Theodore Fremd Ave.
Rye, NY 10580, USA

Oversight of affiliated companies in Europe

Mitsubishi HiTec Paper Europe GmbH, Bielefeld MillSale of inkjet paper and printing
plate materials

17 Yijing Lane Pingsha Town J,
Inwan District, Zhuhai,
Guangdong, China

Principal products: Carbonlesspaper, thermal paper, inkjet
paper

Mitsubishi HiTec Paper Europe GmbH, Flensburg Mill

Principal products: Various filters

MPM Hong Kong Limited

Husumer Strasse 12 D-24941
Flensburg, Germany

Suite 1110, 11th Floor, World Commerce Centre, Harbour City,
11 Canton Road, Kowloon, Hong Kong

Principal products: Thermal
paper, inkjet paper

Sale of speciality materials

105 Sakaemachi, Takasagocho,
Takasago-shi, Hyogo

Kyoto Mill, Kyoto R&D Laboratory

1-6-6 Kaiden, Nagaokakyo-shi,
Kyoto
Principal products: photographic
paper, printing plate materials,
photo inkjet paper

Zhuhai MPM Filter, Ltd.

Niedernholz 23, D-33699
Bielefeld, Germany

Kyoto Mill
Kyoto R&D Laboratory

Principal products: Carbonlesspaper, thermal paper, inkjet
paper, non-woven fabric,
specialty paper

Mitsubishi Imaging (MPM), Inc.

Hachinohe MillAza Aomoriyachi, O-aza
Kawaragi, Hachinohe-shi,
Aomori
Principal products: printing
paper, white paperboard, copier
paper

Shirakawa Site / Process Development Laboratory
3, Aza Maeyamanishi,
Nishigo-mura, Nishi
Shirakawa-gun, Fukushima

Speciality Materials R&D Laboratory
KJ SPECIALTY PAPER Co., Ltd.

Kitakami HiTec Paper Corp.

35, Sasanagane, Aisari-cho,
Kitakami-shi, Iwate
Principal products: Photographic
base paper, hygiene paper

Toho Tokushu Pulp Co., Ltd.

(Oyama Mill) 340, O-aza
Mamada, Oyama-shi, Tochigi(Kitakami Mill) 35, Sasanagane,
Aisari-cho, Kitakami-shi, Iwate
Principal products: Non-wood
pulp

KJ SPECIALTY PAPER Co., Ltd.

7-1 Shimbashicho, Fuji-shi,
Shizuoka
Principal products: Chemical
paper (decorative laminate basepaper, impregnated paper, wallcoverings base, masking tapebacking, etc.)

Speciality Materials R&D Laboratory

46, Wadai, Tsukuba-shi, Ibaraki

Principal products: Pressboard

15 Mitsubishi Paper Mills Corporate Report 2017 Business Sites

Mitsubishi Paper Mills Corporate Report 2017 Business Sites 16

Overview of Business Segments
Printing Paper Business

FY 2017 Review

The Printing Paper Business Division handles the printing paper andcopier paper used in catalogs, brochures, and publications, thecommunication/specialty paper such as carbonless paper for sales slips
and thermal paper for receipts, the paperboard used in packages andfood wrappings, the household paper such as tissue and toilet paper,and more.
To increase the Group's corporate value steadily, strengthening thecompetitiveness of our flagship business, printing paper, is essential. To
this end, we are working to build a stable profit structure by optimizing
our distribution and logistics systems and strengthening alliances withother companies.

With respect to domestic sales, sales dropped for printing
paper amid a weak market for these products and selectively
taking orders focusing on price, among other factors.
Communication paper made a strong showing due to, among
other things, the effects of alliances and expanded sales ofcopier paper.
In exports, sales of industrial inkjet paper grew alongside
an increase in printing paper sales volume. At our European
subsidiary, although sales declined as a result of selective
acceptance of orders with better earnings, the effects of pricerevisions for the two main products—carbonless paper andthermal paper— contributed to improved earnings.
This brought sales for all paper and pulp businesses to¥150,428 million, an 8.5% decrease from the previous year.

Sales(100 million yen)

Sales for the paper
and pulp businesses

2,000
1,900
1,800
1,700
1,600

1,617

1,654

1,643

1,574
1,504

1,500
1,400
1,300
1,200
1,100

Tsuneaki Handa, Director and Managing
Executive Ofﬁcer, General Manager,
Paper Div.

Basic Strategies
If the Group is to secure stable profit in the months and years to come, it will need to establish a strong profit base in theprinting paper business, which accounts for a major share of the Group's sales.
In Japan, we are focusing on improving the efficiency of our supply chain through an integrated manufacturing-sales businessapproach and are engaged in streamlining the functions of the company and our distributor in order to further leverage theadvantages of having one company with one distributor. We are also focused on maintaining good capacity utilization at our
main facility, the Hachinohe Mill. These efforts include shifting to communication paper products which are showing steadydemand and leveraging alliances with other companies to engage in strategic OEM production and expanding exports of printing
paper, industrial inkjet paper, and other products. We have also begun a joint venture for household paper business.
Overseas, aiming to improve profitability of our German business, we are working on cost reductions, increasing product yield,
and beginning contracted production of new products.

Key Challenges
Strategic expansion of OEM

Mid-term management
plan first year initiatives

Targets for the Mid-term
management plan period

・Promote our alliance with the Oji Group・Promote alliances and increase sales ofcommunication/specialty paper

Maintenance of our factory
capacity utilization

・Maintain full-capacity operations by expanding
OEM, export, and other business・Continue full-capacity operations by expanding
OEM, export, and other businessStreamlining of the supply
chain through integrated
management of
manufacture and sales

・Streamline sales/production system

・Improve efficiency by re-examining our role inrelationships with distributors

Revision of product pricing

・Release product pricing revisions

・Reduce inventory through optimal storage
arrangement and increased direct delivery

・Screen orders
Improvement in the
profitability of operations inGermany

・Procure low-cost raw materials and improve
product yield
・Begin contracted coating services for new
products

17 Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments

・Reduce inventory by optimizing the distribution
system・Revise the pricing of printing paper,communication paper, and white paperboard
・Formulate a price-centered sales policy
・Reduce costs on energy and the materials andproduction
・Bring new products to market and expand sales

1,000

2013

2014

2015

2016

2017
(FY)

Vision for the Future
As key challenges to reform the structure of our printing paper business, we are aiming to optimize our distribution andlogistics systems while maintaining high capacity utilization for the pulp equipment and the papermaking and coating machinesat the Hachinohe Mill, our main factory. Furthermore, to capitalize on the superior geographical advantages and costcompetitiveness of the Hachinohe Mill among papermaking mills in Japan, we are now in the process of establishing ahousehold paper-making joint business in 2019, which will follow on the heels of a joint energy business. We will build a stableearnings structure by transforming our brand into one capable of meeting trends in demand — an effort that will include
strengthening these alliances with other companies.
We will also continue to develop new businesses such as mobile device apps and TOUCHCARD ®, along with working tocultivate new demand in products that combine electronic and paper media.

TopicsFiftieth Anniversary of the Hachinohe Mill
Mitsubishi Paper Mills' Hachinohe Mill began
operations in January 1967, making this year its 50th
anniversary.
This period saw the site battered about by several
natural disasters and economic changes, with particularly
grievous damage suffered during the Great East Japan
Earthquake. However, everyone's staunch support has
seen the facility through to its 50th year of operations.
We extend our gratitude to all of the business partners,
shareholders, officials from Aomori Prefecture and thecity of Hachinohe, employees, and the many otherpeople who played a part in making our operations
succeed over this half-century.
Fiftieth Anniversary Commemoration

Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments 18

Overview of Business Segments
Imaging Media Business

FY 2017 Review

The Imaging Media Business Unit provides imaging industries such as
the photography and printing industries with a diversity of products that
range from photo paper to inkjet paper and the resin coated base paperthat backs these products, digital printing plates and related equipment,materials, and software. It aims to further strengthen alliances withindustry partners in order to reinforce the business foundation while atthe same time maintaining and expanding existing business throughforays into overseas emerging markets and into neighboring markets. In
addition, the unit seeks to move into new markets with functional films
and other new products achieved by leveraging a wealth ofimaging-related technologies.

Domestic market sales were steady for photosensitive
materials and printing plate materials, with figures roughly at
the level of the previous period.
In the overseas market, the effects of alliances helped
achieve increased sales of photosensitive materials.
However, total sales dropped due to a decline in demand forexisting products such as inkjet paper and printing platematerials, as well as to the impact of a strong yen.
This resulted in total sales for the Imaging MediaBusiness of ¥38,908 million, a 6.8% decrease from theprevious year.

Sales(100 million yen)

Imaging Media Business Sales

600

500

400

398

416

435

418

389

300

200

100

Yutaka Oka, Senior Executive Ofﬁcer,
General Manager, Imaging Media Div.

0

Basic Strategies
The Imaging Media Business operates based on three strategies: (1) strengthening alliances, (2) expanding and improving
the lineup of existing products, and (3) fostering new business.
(1)Strengthening alliances involves further reinforcing efforts with industry partners, further expanding the production and supply
volume of resin coated base paper for photographic applications, and fortifying the profit base.
(2)Expanding and improving the lineup of existing products entails concentrating on growing sales in overseas emerging markets
such as Asia, where demand growth is expected to continue. It also involves maintaining and expanding existing business andbranching into neighboring markets such as B to B markets that include inkjet paper for dry minilabs, labels, signage, and HP
Indigo system, as well as print-related products for the post-print processing and screen printing markets.
(3)Fostering new business will see us develop and sell new products that include functional films such as transparent conductive
films for touch panels and resist materials for electronic circuit boards, as well as products for electronics-related fields and the
medical/healthcare fields. In addition, we will supply digital textile inkjet printing transfer paper for not only sublimation transfer
printing on polyester but also thermal transfer printing on cotton, silk, and other natural fabrics. By approaching new customers
in the textiles industry primarily in overseas markets, early commercialization is expected.

2013

2014

2015

2016

2017
(FY)

Vision for the Future
The Imaging Media Business Unit will continue to focus on contributing to the photography and printing industries throughexisting core products such as resin coated base paper for photographs, inkjet paper, printing plate materials, and related
products. It also aims to introduce new products that leverage imaging technologies as a means to accelerate the advance ofbusiness in new fields and growth markets and aim to further develop its business. To this end, we have decided to install a
special coating machine for functional films at our Kyoto Mill. The days to come will see us expand our horizons to new fields
and growth markets as we work to generate new business ideas and products.

TopicsOpening of the Pictorico Shop & Gallery in Omotesando

Key Challenges
Expansion of alliances

Maintenance of our factory
capacity utilization

Mid-term management
plan first year initiatives

Targets for the Mid-term
management plan period・Through more robust alliances, increased our
supply of photographic base paper by morethan 50% over the previous year

・Further strengthen alliances and further
increase our production and supply ofphotographic base paper

・Increased sales volume of resin coat (RC)base inkjet (IJ) for Asia by 15% over theprevious year

・Every year, increase sales volume of RC base IJ
in emerging nations in Asia and elsewhere by
10% year-over-year

・Commercialized a digital silk screen making
machine (MDS-360)

19 Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments

・Deploy at least 100 MDS-360 units, primarily inJapanMitsubishi Paper Mills has opened a directly-managed
shop and gallery in Omotesando. Here we satisfy adiverse range of professional and high-level amateur
needs that include high quality photo prints as well as
print framing, processing, and display.
Location: 4-14-5 Jingu-mae, Shibuya-ku, Tokyo
Hours: Tuesday – Saturday, 10:00–19:00*Closed: Sunday and Monday
Features: ・Photo print gallery
・Inkjet product sales
・Print workshop reservations
Opened: July 2017

Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments 20

Overview of Business Segments
Speciality Materials Business

FY 2017 Review

The Speciality Materials Business Unit handles special products thathave functions. This unit brings together papermaking, coating, chemical
synthesis, analysis, and other technologies to achieve a lineup of
distinctive products. These include non-woven fabric base substrate forreverse osmosis and other water treatment membranes, separators forsecondary batteries, air filters for air purification and vehicle air
conditioning systems, media that can be repeatedly recorded anderased with thermal heads, decorative laminate base paper, andmasking tape backing.
It handles a large number of products in a range of fields and operates
with a global perspective in pursuit of making Mitsubishi Paper Mills the
top manufacturer in each field. The unit's business base has become
increasingly globalized: in recent years, exports account for nearly 50%
of sales.

The speciality materials segment saw an overall drop insales due to a drop in orders for battery separators and for
filters for consumer electronics in overseas markets which
offset improved sales of rewritable media for overseas
markets and water treatment membrane base substrate.
Chemical paper sales rose on improved sales of products
including masking tape backing, despite a decline in sales fordecorative laminate base paper and base substrate for wallcoverings.
As a result, total sales for the Speciality Materials
Business increased 0.2% from the previous year to ¥16,958
million.

Sales(100 million yen)

250

Speciality Materials Business Sales

200
160
150

168

169

170

2015

2016

2017
(FY)

142

100

50

Junji Harada, Director and Managing
Executive Ofﬁcer, General Manager,
Speciality Materials Div.

0

2013

2014

Basic Strategies

Vision for the Future

To strengthen our profit base, we are concentrating management resources on achieving further growth for non-woven fabricproducts (for water treatment and battery separators). Through efforts such as installing new equipment and entering into
alliances, we will enhance quality and strengthen our cost competitiveness while achieving further growth.
For our existing products, our emphases are on marketing filter products for consumer electronics in Asia while growing salesof cabin filters for automobiles in China and expanding our business in Asia for total heat exchange paper and elements, which
are environmentally conscious products. Rewritable media has seen remarkable growth in China over the last few years, but our
focus now will be on improving sales in ASEAN and other regions with growth potential. We will proceed with expanding sales ofwashi (traditional Japanese paper)-type tape substrate in the European market.
To foster a new business, we will target electric vehicle applications with polyester non-woven fabric battery separators.
Featuring very high heat resistance, these products are attracting attention around the world in the field of non-woven fabrics.
We will also be utilizing technologies for mass-production of highly-concentrated dispersion liquid of CNTs (carbon nano-tubes)
to supply processed products such as CNT tape and CNT sheets, which feature high electrical and heat conductivity, to nicheapplications.

Products supplied by the Speciality Materials Business Unit are used as components in end products. Because all of them areused in high added-value products in growing markets, their specification requirements are stringent, and constant quality
improvements are required. We have made a number of capital investments in the Takasago Mill that include non-woven fabricmaking machine for water treatment membrane base substrates and coating machine for battery separators, and we areplanning further manufacturing equipment investments for fiscal 2018 to meet growing demand.
Zhuhai MPM Filter, Ltd. (MFZ), a Mitsubishi Paper Mills subsidiary in Zhuhai, China, is leveraging the capacities it hasdeveloped as a production facility and making the most of its geographical advantage as a facility within China, one of theworld's major centers of consumption to market products for China and the ASEAN market.
The company brings products with unique features to a growing market, and aims to grow its business under a businessmodel focused on improving product characteristics through technical communication with customers and pushing the company
to the top of a niche market.

Key Challenges
Further growth for
non-woven fabricproducts

Mid-term management
plan first year initiatives
・Water treatment membrane base substrate:
Increased sales 20% over the previous year

・Filters: Function filters for air conditioning
systems are undergoing final evaluations at a
local consumer electronics manufacturer in Asia
Expanding sales in Asia
and Europe

・Masking tape backing: Increased sales in
Europe 26% over the previous year
・Rewritable media: Received order for a new
project from an organization affiliated with the
Chinese government

Targets for the Mid-term
management plan period
・Increase sales of water treatment membranebase substrate by 130%
・Increase sales of battery separators by 200%

・Expand sales of products for consumer
electronics in Asia, open up sales channels in
China for cabin filters, and grow sales of totalheat exchange paper
・Increase sales in Europe by 50%
・Expand sales in China and launch products in
ASEAN nations

Topics

NanoBaseX OZ-GX Series of high heat resistant separators for lithium-ion batteries
The NanoBaseX separators for lithium-ion batteries
have helped bring better safety and longer life tolithium-ion batteries. In the fall of 2016, we developed the
NanoBaseX OZ-GX Series, which offers revolutionary
heat resistance up to 470°C.
We are proceeding to market this product, whichsolves almost all temperature limit issues that can occur
with separators used in lithium-ion batteries.

Separator heat resistance test

21 Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments

Mitsubishi Paper Mills Corporate Report 2017 Overview of Business Segments 22

Research and Development
Process Development Laboratory

Since its founding, the Mitsubishi Paper Mills Group has contributed tosociety and offered products suited to the times by leveraging technicalexpertise which is the base of our strong track record and the trust in our
products. As a corporate group that is always on the leading edge oftechnology, we view our development capability as a critical foundation
for improving corporate value, and we will continue to enhance ourtechnologies in an effort to become a corporate group that lives up to thetrust of its customers in the world market.

Makoto Fujita, Managing Executive Ofﬁcer

A base for product and technology development
Speciality Materials R&D Laboratory
In addition to technologies for existing products such asbattery separators and water treatment membrane supporting
bodies, which use non-woven fabrics as base materials, theSpeciality Materials R&D Laboratory develops next-generation
products that include cellulose and synthetic resin composites,
micro-fibrillated cellulose, and carbon fiber sheets. Our sales,
production, and R&D departments form an information sharing
trinity that constitutes an integrated, coherent, and dynamic
product development system. Advanced analysis technologies
are essential to product development and improving the quality ofexisting products.
Keeping pace with rapidly advancing analysis technologies,
Mitsubishi Paper Mills' analysis group provides robust,comprehensive support in continually enhancing the reliability
and brand power of the Group's products.

Test printers

Coating flow analysis business

Battery separators using micro-fibrillated cellulose

Kyoto R&D Laboratory
Printing plate materials, a technology with more than 40 yearsof development history, are evolving into more environmentallyconscious products such as the Thermal Digiplate System. They
are also giving rise to a range of unique products in the field ofelectronics. These include resist systems with unique properties
and transparent conductive films for touch panels, as well as
silver nano particle inks together with designated base materials
for printed electronics.
Sensitizing dyes for dye-sensitized solar cells have been wellreceived at numerous research institutes around the world fortheir excellent performance, and have become an industry
standard.

MPM CAE Center Co., Ltd. (established in April2011) conducts contracted research and provides
consulting services using numerical analysis
techniques. It provides services that meet users'
needs through the use of coupled analysis
techniques and high speed analysis systems.
With its high level of technical expertise, thecompany has long been engaged in scientificallyanalyzing coatings, which are applied to basesubstrates, and has created numerical analysis(computer simulation) technology for optimizingthem. In recent years, this numerical analysis
technology has been the focus of attention not only inthe pulp and paper industries, but also in advanced
fields such as electronic materials, and there havebeen many requests for contracted researchservices.

Analyses of ink osmosis and absorption on inkjet media surfaces

Intellectual Property

Dry film resists andconverted metal parts

23 Mitsubishi Paper Mills Corporate Report 2017 Research and Development

Paper and speciality material production
technologies and printing and processing
technologies are becoming more sophisticated day
by day, and demands for quality are changing by theminute.
We operate a pilot plant with a paper machine, acoater, a plate making machine and printing
machines. Product prototypes are created here andthose prototypes are evaluated for quality. This
allows us to quickly start up the development of
products and evaluate those products using
up-to-date technologies so we can provide productsthat satisfy customers.
Furthermore, we create product samples to show
the features and characteristics of our products, while
also conducting sales support activities that include
providing customers with technical guidance. At thesame time, we leverage the expertise of Laboratory
personnel to develop production technologies andnew applications for products, in addition to surveying
cutting edge manufacturing technologies.

Transparent conductive films

Intellectual property is an important asset in the continued development of our business. In particular, patents secure,maintain, and enhance the competitive strength of new products and we submit 150 to 200 patent applications every year inJapan and abroad. Although we have traditionally submitted patent applications mainly in Japan, the U.S., and Europe, in recent
years we have been increasing applications in China, Korea, Taiwan, and other Asian nations. We have also been aggressively
applying for, and registering, trademarks in order to improve customer confidence in new products.

Mitsubishi Paper Mills Corporate Report 2017 Research and Development 24Mitsubishi Paper Mills Group CSR
The Way We See CSR

Basic Policies for CSR Activities, and Key Issues (Material Issues)

For a company to continue to exist as a member of society, it must not only secure profits, but also fulfill its
social responsibilities to various stakeholders. The purpose of CSR is to increase corporate value by obtaining
trust and empathy from everyone. We see CSR as being an important management issue that should be
addressed in our business activities in order to respond to the needs of society.
The basic corporate philosophy of the Mitsubishi Paper Mills Group in its operations is to be a corporategroup that lives up to the trust of its customers in the world market, to be a corporate group that is always on
the leading edge of technology, and to be a corporate group that contributes to preserving the global
environment and creating a recycling society. To give concrete expression to our corporate philosophy, weestablished the Code of Conduct of the Mitsubishi Paper Mills Group in January 2007, and we see CSR as
being activities that bring this into reality.

With the goal of contributing to making society more sustainable through its business activities, the Mitsubishi Paper Mills
Group has established five basic policies that guide its CSR activities. In line with these basic policies, we have established thefollowing key issues for fiscal 2018 in light of the circumstances surrounding the Group and the importance of issues aimed ataddressing social needs.

Measures

Type of information relayed

Organizational GovernanceSuppliers

・Holding explanatory meetings for investors

Human Rights and Labor

Shareholders

Government

・Dialogue with the local community
・Issuing integrated reports, etc.

Social Contribution

Local Communities

・Provision of information via the Internet

NGOs/NPOs

Guiding Principles of the Mitsubishi Paper Mills Group and ISO 26000 Core Subjects
Community involvement anddevelopment
Social Contribution –Direction of Activities

Corporate Philosophy

Human Rights

Basic Policy for Procurement

Code of Conduct of the Mitsubishi Paper Mills Group
Compliance Conduct Standards
Product Safety Code

Basic Policies on Corporate Governance
Information Disclosure Regulations
Information Management Regulations
Crisis Management Manual

Fair Operating Practices

Ensuring the effectiveness of corporate governance(are the top priority issues)

Establishing a risk management structure
Thoroughly familiarizing employees with our Corporate Code of Conduct
and the Compliance Conduct Standards
Ensuring strict legal compliance

Promoting communication with stakeholders
Expanding initiatives out to affiliated Group companies

Promoting environmental
management

Promoting activities to prevent global warming
Promoting activities to preserve biodiversity
Improving and enlarging our environmentally conscious product lineup
Reducing environmental risk and impact

Raising customer satisfactionlevels by carefully addressinguser needs

Ensuring product safety

Taking further measures to provide
our employees with a pleasantworking environment

Enhancing activities to ensure safety and health

Promoting activities that contributeto society

Ensuring product quality
Rolling out new user-oriented products and building optimal sales channels
Promoting various measures to improve human resource performance
Promoting community support activities
Promoting cultural contribution activities
Promoting activities of the Eco System Academy

Principles and Guidelines Concerning
Human Rights and Labor Practices

Organizational GovernanceConsumer issues

Strengthening our CSR
management foundation

Employees

・Enhancement of internal communications

Environment

FY 2018 Key Issues

Customers

・Sharing of environmental datawith suppliers and customers

Product Safety and Quality

Basic Policies for CSR Activities

Stakeholders

・Communication with our customers

Compliance

Basic Policies for CSR Activities, and FY 2018 Key Issues

Corporate Ethics Hotline

Antimonopoly Act Compliance Manual
Basic Policy for Procurement

25 Mitsubishi Paper Mills Corporate Report 2017 Mitsubishi Paper Mills Group CSR

Labor Practices
Principles and Guidelines Concerning
Human Rights and Labor Practices
Group-wide Safety and HealthManagement Guideline

Environment
Environmental Charter
Chemical Substance Management
Guidelines

The process for defining key issues (material issues)
1. Ascertain the circumstances surrounding the Mitsubishi Paper Mills GroupWe conducted an analysis of the circumstances surrounding the Mitsubishi Paper Mills Group from environmental,social, and governance viewpoints. We then identified issues according to our basic policy, and assessed efforts that are
being made with respect to these issues.

2. Establish key issues to satisfy the needs of society

We assigned priority to each issue based on how they impact our business, and using various guidelines and feedback
from stakeholders as indicators. We then established key issues that seek to address social needs.

3. Decide on the highest priority issues

We selected the highest priority issues by re-examining issues based on business progress and the wishes of our
stakeholders, using the Second Mid-Term Management Plan as a guide, and reevaluated the priority of efforts to resolve
key issues.
Mitsubishi Paper Mills Corporate Report 2017 Mitsubishi Paper Mills Group CSR 26

Corporate Governance
Basic Policies on Corporate Governance

CSR Promotion StructureWith the goal of achieving sustainable growth and improving corporate value over the medium- to long-termin line with the Corporate Philosophy, the Mitsubishi Paper Mills Group manages itself with an emphasis on
CSR. This involves working to enhance management transparency and practicing glass wall management
while improving corporate governance. In October 2015, we established the Mitsubishi Paper Mills Limited
Basic Policies on Corporate Governance, which incorporates these basic ideas and establishes a framework,and have been undertaking a number of new initiatives that include establishing and managing a Nomination
and Remuneration Committee and conducting Board of Directors effectiveness assessments.

Chaired by the President, the CSR Committee oversees all nine areas of the Group's CSR activities (compliance, risk
management, safety and health, the environment, product safety, product quality, human rights and labor, information, and social
contribution), drafts CSR basic policy and annual plans, and regularly deliberates at Board of Directors meetings.

Product Quality
Product Safety
Product Liability (PL) Committee

Mitsubishi Paper Mills Limited Basic Policies on Corporate Governance
Chapter 1: Securing the Rights and Equal Treatment of Shareholders
Sets forth policies concerning General Meetings of Shareholders, capital policy, cross-shareholding, anti-takeovermeasures, and transactions among related parties.
Chapter 2: Considering Interests of Stakeholders
Sets forth policies concerning corporate compliance, issues involving sustainability, diversity, and internal whistleblowing.
Chapter 3: Ensuring Appropriate Information Disclosure and Transparency
Sets forth policies concerning accounting auditors and means for disclosing information.
Chapter 4: Responsibilities of the Board
Sets forth policies concerning matters such as the role of the Board of Directors, the nomination of and remuneration for
executives that include independent outside directors, the chairman of the Board of Directors, and directors, director
training, and succession plans for the president and other executives.
Chapter 5: Dialogue with Shareholders
Sets forth policies concerning communication with stakeholders, investor relations activities, communicating the results of
dialogue with shareholders to internal departments, managing insider information, and other areas.

CSR Director

President

27 Mitsubishi Paper Mills Corporate Report 2017 Corporate Governance

CSR Committee
Supervising office:President's Office

Audit & Supervisory Board(audit & supervisory board
members and outside audit& supervisoryboard members)

Board of Directors(directors andoutside directors)

Executive Committee

President and C.E.O.

Mill Managers' &Executives’ Committee

Accounting Auditors(auditing company)
Nomination andRemuneration
Committee

CSR Committee
Internal Audit
Department

Paper Division Imaging Media Division
Specialty Materials Division
Mills Head Office Divisions Affiliated Companies

Social Contribution
Information
Human Rights and Labor

Director in Charge ofthe General Affairs &Personnel Department

Safety & HealthCompany-wide Safety and Health Committee
Director in Charge ofthe General Affairs &Personnel Department

Internal Control
Responsible department:
General Affairs &Personnel Department

General Meeting of Shareholders

Environment
Environmental Conservation Committee
Social Contribution

Overview of Corporate Organizations
We have chosen to structure ourselves as a company
with a board of corporate auditors. Two fully
independent outside directors and three outside
corporate auditors capably fulfill the roles required by
the Board of Directors.
We have also adopted an executive officer system tolimit the size of the Board of Directors and speed up
decision-making.
In addition, we have instituted a Nomination andRemuneration Committee that acts as an advisory bodyto the Board of Directors and is chaired by anindependent outside director. This committee ensures
objectivity and transparency in matters concerning
executive nomination and remuneration.
Furthermore, to evaluate the effectiveness of theBoard of Directors, we administer questionnaires todirectors and corporate auditors and have discussions
based on the results at meetings of the Board, sharing
views. Along with this, identifying issues and discussing
them leads to future improvements and enhancementsin the Board’ s effectiveness.

Director in Charge ofTechnology andEnvironment Department

Risk Management
Risk Management Committee
Compliance
Compliance Committee
Asset Protection
Business Effectiveness and Efficiency
Operating Audits
Reliability of Financial Reporting

Director in Charge of
the Internal Audit
Department

Compliance
In order to be a company of integrity and fairness that is trusted by society, the Mitsubishi Paper Mills Group practices
corporate management with a focus on compliance. Based on the Code of Conduct of the Mitsubishi Paper Mills Group, all
executives, general employees, and others related to the Company ensure good corporate conduct by following the Mitsubishi
Paper Mills Group Compliance Conduct Standards, which provide rules to be observed in our business activities.

Activities to Promote Better Awareness of ComplianceIn addition to holding regular discussion-based compliance training for all employees in Japan, Mitsubishi Paper Mills provides
legal training twice a year that is led by lawyers from a variety of specializations. The themes for the fiscal 2017 legal training
were insider-trading and signing contracts, and were attended by more than 500 employees.
We also issued the Compliance News newsletter at regular intervals to make employees more legally-minded.
The nine issues released in fiscal 2017 focused on topics that included information management, insider-trading, anti-social
elements, and the Act against Unjustifiable Premiums and Misleading Representations.

Corporate Ethics Hotline internal whistleblowing system
Mitsubishi Paper Mills has launched an internal whistleblowing system that is available to all employees working in the
Mitsubishi Paper Mills Group. Under the system, careful measures are taken to ensure informants do not receive unfair
treatment, such as having points of contact both inside and outside the company.
Mitsubishi Paper Mills Corporate Report 2017 Corporate Governance 28

Corporate GovernanceRisk Management

Information Disclosure

Along with accurately identifying risks that change on a minute to minute basis, companies face the need toaddress these risks appropriately and faithfully. Using its system for promoting CSR, the Mitsubishi Paper Mills
Group has expressed its commitment to "building a risk management structure and improving its risk map aspart of Group management," with the Group's risk management efforts overseen by the Risk Management
Committee. Each division and committee responds to each of these risks.

To have our stakeholders better understand the business of Mitsubishi Paper Mills Group, we are committed to proactive
communication and the proper disclosure of information.
The Group has codified its approach to information disclosure in its Information Disclosure Regulations, which went into effectin April 2017. In addition, we have laid out our basic policy on information disclosure in our Disclosure Policy (formulated in
March 2009), the administration of which is done by our Corporate Communication and IR Group. This group also holds PR
sessions and manages the disclosure of information throughout the Group. In the interest of fair disclosure, we makeannouncements and use our website to post information about things such as timely disclosed information, press releases, andnew products.

Disclosure Policy

CSR Committee▼

Communication and review

Business environment volatility risks
Each company and each department▼

Risk Management Committee

Risk response

Legal violation risks
Compliance Committee▼

Risk assessment

Safety and health risksGroup-wide Safety and Health Committee▼

Risk analysis

Product Safety risks
Product Liability (PL) Committee▼

Risk identification

Environmental risks
Environmental Preservation Committee

1. Basic policy
In accordance with "3. Transparency of Corporate Activities" of the Code of Conduct of the Mitsubishi Paper Mills
Group, Mitsubishi Paper Mills discloses appropriate information to customers, shareholders, community members, etc.
in a timely manner.
2. Standards of disclosure(1)We disclose information in conformance with rules established for companies listed on the Tokyo Stock exchange,
namely the TSE's Timely Disclosure Rules.
(2)All information deemed to have an impact on investment decision-making is disclosed, regardless of whether
disclosure of that information is required under the Timely Disclosure Rules.
(3)We disclose information thought to be effective in improving our company recognition and encouraging a better
understanding of the Mitsubishi Paper Mills Group.
3. Methods of disclosure
We disclose information via the Timely Disclosure Information System (TDnet), various media outlets, and our website.
See Mitsubishi Paper Mills' website for more information. ⇨ https://www.mpm.co.jp/eng/ir/disclosure/index.html

Improving Our Risk Map
The Mitsubishi Paper Mills Group conducts risk management with an eye on more than 200 risks throughout the organization.
We have analyzed the impact of these risks and the frequency with which they occur to build our risk map, and we regularly
redefine and reanalyze risks to update the map. These efforts are how we maintain and improve the effectiveness of our risk
management.

Building a Crisis Management System

The Mitsubishi Paper Mills Group formulated its Crisis Management Manual (revised January 2016) out of a commitment tofulfilling its corporate social responsibility and maintaining social credibility in the event of an accident or disaster that could cause
serious harm to people or equipment, or impact surrounding communities. We also work to construct an effective system that
ensures response measures can be taken with speed and precision when necessary. This includes conducting simulation
training at every business site and at a scale that involves the entire company.

Enhancing Information Management
In order to properly use, protect, and dispose of information handled in the course of our business activities, we fundamentally
re-examined our information management systems and methods. This resulted in formulating our Information Management
Regulations and a guideline for enforcing these rules, the Information Handling Guidelines, which went into effect in April 2016.
After a six-month preparation period, these rules started being applied in October 2016.

Creation of a Business Continuity Plan (BCP)The Mitsubishi Paper Mills Group's experience with the Hanshin-Awaji Earthquake and Great East Japan Earthquake has
impressed on it the need for strengthening emergency preparedness. We are building an effective business continuity plan
informed by our experience in recovering from profound devastation.

29 Mitsubishi Paper Mills Corporate Report 2017 Corporate GovernanceCommunication
IR information site
An investor relations site can be found on the Mitsubishi Paper Millswebsite. Information is disseminated in a timely fashion using thiswebsite, which provides, among other things, earnings highlights, an IR
calendar, an IR library (with access to annual business report, mid-term
management plan materials, IR information, annual reports), General
Meeting of Shareholders presentation materials, and stock information.
IR information site
⇨ https://www.mpm.co.jp/eng/ir/index.html

Head Office Gallery: Paper Design Square
At the head office, we have built a gallery displaying our principal
products as a means to engender a stronger affinity with Mitsubishi
Paper Mills Group products. Exhibitions are held regularly.
Location
Ryogoku City Core, 2-10-14, Ryogoku, Sumida-ku, Tokyo, Japan
Mitsubishi Paper Mills Head Office, 11F, next to general reception
Hours
9:00-17:00 (closed on Saturdays and Sundays, public holidays, anddesignated holidays)

Mitsubishi Paper Mills Corporate Report 2017 Corporate Governance 30

Corporate Governance
Company Executives

Ordinary General Meeting of Shareholders
To ensure that shareholders have sufficient time toconsider issues presented at the Ordinary General Meetingof Shareholders, convocation notices are published andmailed out early (an online announcement is made 27 days
prior to the meeting date, and notices are mailed out 25
days prior to the meeting date), and are translated into
English.
At general meetings of shareholders, we make every
effort to ensure shareholders come away with a better
understanding of the Mitsubishi Paper Mills Group. This
includes incorporating visual aids and narration to ensure
information is conveyed in an easily understood manner,and allotting ample time for questions and answers withshareholders.

(as of August 31, 2017)

Board of Directors and Corporate Auditors
Kunio Suzuki, President(Representative Director)
Kazuhisa Taguchi, Representative Director
Kanji Morioka, Representative Director
Junji Harada, Director
Masaki Shuto, Director
152nd Ordinary General Meeting of Shareholders

Dialogue with stakeholders
To provide our stakeholders with a better understanding of Mitsubishi Paper Mills Group business, we are committed toproactive communication.

Tsuneaki Handa, Director
Naoki Okawa, Director
Tomohisa Shinagawa, Outside Director
Attorney-at-Law, Mori Hamada &Matsumoto Law OfficeSoumitsu Takehara, Outside Director
President and Certified Public
Accountant, ZECOO Partners, Inc.

Kunio Suzuki1）, President & Chief Executive Officer
Kazuhisa Taguchi1）, Senior Executive Vice President
Kanji Morioka1）, Senior Managing Executive Officer
Junji Harada2）, Managing Executive Officer
Masaki Shuto2）, Managing Executive Officer
Tsuneaki Handa2）, Managing Executive Officer
Kiyoharu Yamada, Managing Executive Officer
Makoto Fujita, Managing Executive Officer
Yutaka Oka, Senior Executive Officer
Nobuhiro Sato, Senior Executive Officer
Yukihiro Tachifuji, Senior Executive Officer
Naoki Okawa2）, Senior Executive Officer

Kenji Oka, Standing Corporate Auditor

Akira Inoue, Senior Executive Officer

Tsuyoshi Inoue, Outside Corporate Auditor
Former President of Japan Economic
Research Institute Inc.

Shimpei Yamada, Executive Officer

Hiroaki Tonooka, Outside Corporate Auditor
Adviser, Meiji Yasuda Life Insurance
Company

Koji Hayashi, Executive Officer

Takayuki Nakazato, Outside Corporate
AuditorPresident, Ryoshin Holdings Co., Ltd.
Analyst briefings

Executive Officers

Keiichi Sato, Executive Officer
Takeshi Sunakawa, Executive Officer
1) Executive ofﬁcers and Representative Directors.
2) Executive ofﬁcers and Directors.

Joint Seminar held with NPO PODi (Tokyo)

Election of Outside Directors and Outside Corporate Auditors
While primarily incorporating the views of internal personnel, who have in-depth knowledge of the realities of the company's
business, Mitsubishi Paper Mills also fully incorporates the views of outside directors, who are able to make decisions from an
independent standpoint. We view this approach as effective in ensuring robust corporate governance. Two Outside Directors
have been elected to the current Board of Directors, a structure we have deemed appropriate.
All legal requirements have been met regarding our Outside Corporate Auditors, and we are confident that individuals withadequate knowledge and personal qualities have been elected.

Lecture given at a Japanese Society of Printing Science andTechnology conference (Tokyo)

31 Mitsubishi Paper Mills Corporate Report 2017 Corporate GovernanceBusiness status briefing for the labor union

Mitsubishi Paper Mills Corporate Report 2017 Corporate Governance 32

Fair Operating Practices
By adhering to the Compliance Conduct Standards in accordance with the Code of Conduct of the Mitsubishi
Paper Mills Group, we aim to be a corporate group that fulfills its social responsibility while living up to theconfidence society has in us.

Fair Competition

We believe that conducting fair competition and achieving mutual growth and improvement will bring the realization of ourcorporate philosophy. In keeping with our focus on carrying out fair and free competition in our business practices, we prepared
an Antimonopoly Act Compliance Manual (last revised in November 2013) to educate ourselves on competition laws and act
appropriately in the workplace.

Antimonopoly Act Compliance Manual
1. About the Antimonopoly Act(1) Purpose of the Antimonopoly Act(2) Regulatory content of the Antimonopoly Act(3) Measures in response to violations
2. Legislation that supplements the
Antimonopoly Act(1) Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors(2) Act against Unjustifiable Premiums andMisleading Representations
3.Matters to be aware of in business operations(1) Prohibition of private monopolies(2) Prohibition of unlawful restraint of trade (cartels)(3) Unfair trading practices(4) Points to note concerning various trade activities
4. Response in suspected cases of Antimonopoly Act violations(1) When unsure if an Antimonopoly Act violation has occurred(2) When an Antimonopoly Act violation is discovered within the company
5. Reference material(1) Related websites(2) Cease and desist order received by Mitsubishi Paper Mills in connection
with a used paper mixture misrepresentation incident in 2008

Responsible Raw Material Procurement
The Mitsubishi Paper Mills Group uses wood as a principal raw material of business. In theinterest of sustainable wood procurement, we were one of the first to acquire FSC ® * forest
certification, and procure timber from forests being managed in accordance with the FSC forest
certification system.
*FSC: Forest Stewardship Council®

FSC forest certification system
FSC
forestforest
certification
system system was launched in 1993 to promote responsible forest
The FSCcertification
The
FSC
forestcertification
systemwaslaunched forest
in 1993
to promote(FM)responsible
forestmanagement. There are two typesof FSC
certification:
management
certification
andmanagement.
Thereare(processing
two types ofFSC
certification:
forestmanagement)
managementcertification.
(FM) certification
and
chain
of custody
(CoC)
and
distribution
process
In Augustchain ofcustody(CoC)Paper(processing
and distribution
process
management)
certification.
In August2001,
theMitsubishi
Mills Group
became thefirst paper
mill in Japanto acquire
CoC
2001, the Mitsubishi Paper Mills Group became the first paper mill in Japan to acquire CoC
certification.
certification.
See Mitsubishi Paper Mills' website for more information.
See Mitsubishi
Paper Mills' website for more information.
⇨https://www.mpm.co.jp/eng/env/fsc.html⇨https://www.mpm.co.jp/eng/env/fsc.html

Method for verifying legal compliance and sound management
1. Evidence of use of the forest certification and CoC certification systems (FSC certified wood, FSC-controlled wood)
2. Evidence of methods of individual companies or organizations (controlled wood)
In 2. above, we verify that wood is controlled in accordance with Requirements for Sourcing FSC Controlled Wood
(FSC-STD-40-005). The verification method in conformance with these requirements is described below.

Preventing Corruption◎ Collection of information concerning wood chips and pulp
・Confirmation of the place of origin, wood type, forest management methods, etc. from traceability reports
・Confirmation of documentation certifying the place of origin (e.g. documents related to transport and sales)
・Regularly auditing suppliers and verifying document reliability

Mitsubishi Paper Mills' Compliance Conduct Standards prohibit business activities that may result in social decay: entertainingor giving gifts to civil servants (including low-ranking civil servants), and giving benefits to officials in foreign governments andpublic organizations.

◎ Assessing risk (taking measures to mitigate risk when necessary)・Assessing and verifying that place of origin of wood is a low risk with respect to A) through E) below.
A) Illegal logging
B) Violations of traditional or citizens' rights
C) Threats to forest with high conservation valueD) Turning natural forests into man-made forests or using them for other purposesE) Genetically modified trees
・Receiving audits of risk assessment results by an FSC certifying body

Promoting Social Responsibility in the Supply Chain

In order to ensure that we act responsibly and ethically, and also that related companies, such as providers of raw materials,
practice fair trade with a similar business posture, we established a Basic Policy for Procurement (revised in September 2015)
and are also working to promote social responsibility in the supply chain.

Basic Policy for Procurement
1. Impartiality and fairness
Mitsubishi Paper Mills emphasizes common sense and integrity in business interactions with its suppliers, and treats them
impartially and fairly.
2. Procurement of the most suitable purchased goods
Mitsubishi Paper Mills selects the most suitable suppliers based on a comprehensive evaluation of quality, cost, lead times,
technological development capability, stability of supply, and corporate attitude (e.g., legal compliance, disavowal ofanti-social elements, protection of intellectual property rights, protection of human rights, regard for the health and safety ofworkers, non-use of conflict minerals, efforts involving security trade control, and mindfulness of the environment)
concerning all purchased goods, including raw materials, indirect materials, fuel, and machinery. With respect to overseas
suppliers in particular, we choose suppliers after ensuring that those organizations are sufficiently committed to pursuits
such as preserving biodiversity and preventing child labor.
3. Partnerships
We aim to forge business relationships of mutual prosperity based on the understanding that all suppliers are partners
providing us with competitive end products.

Disavowal of Anti-social Elements

The Mitsubishi Paper Mills Group maintains a resolute stance against anti-social elements that threaten social order andsafety. This stance is laid out in our Code of Conduct, and we are trying to share this stance with all executives, employees, andother company stakeholders.

33 Mitsubishi Paper Mills Corporate Report 2017 Fair Operating Practices

Raw wood procurement in fiscal 2017

Countries of raw wood chip production

Types of raw wood

FSC certified wood
44%
0

20

40

FSC controlled wood
56%
60

80

Chile
28%
100（%）

0

20

Australia
22%
40

Other
15%
60

Japan
35%
80

100（%）We have verified that all wood chips and wood pulp procured in fiscal 2017 came from forests that were legally andappropriately managed.

Achieving conformance with the Act on Promotion of Use and Distribution of
Legally-Harvested Wood and Wood Products（the Clean Wood Act）
In accordance with the FSC forest certification system, we have completed the process of verifying that we are inconformance with the Clean Wood Act, which went into effect on May 20, 2017.

FSC® C021528

Mitsubishi Paper Mills Corporate Report 2017 Fair Operating Practices 34

Relationship with the Environment
In an effort to be a corporate group capable of actively contributing topreserving the environment and creating a sustainable society, Mitsubishi Paper
Mills formulated its Environmental Charter in April 1993. In accordance with thefundamental principles of the Environmental Charter, we are making distinctive
efforts across our lines of business to repay the trust placed in us by our
stakeholders.
For the fifth year running, Mitsubishi Paper Mills has been given theDevelopment Bank of Japan’ s (DBJ) highest environmental rating. This ratingreflects an acknowledgment by the DBJ that our efforts have been "excellent
advanced environmental initiatives."

Environmental Charter

Preventing Global Warming
Manufacturing segment initiatives

The Mitsubishi Paper Mills Group has the target of bringing CO2 emissions down to 920 thousand tons or less by fiscal 2021
and is working on reducing its fossil fuel-based energy and overall energy consumption. In fiscal 2017, our overall energy use
was 94%, and fossil fuel-based energy consumption was 75% of that in 2006.
(Includes Mitsubishi Paper Mills Limited, Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd., and KJ SPECIALTY PAPER Co., Ltd.)

Mitsubishi Paper Mills received anenvironmentally rated loan fromthe Development Bank of Japan in
March 2017.

30,000

Energy consumption（%）

Types of energy used

100

30,52528,65780

1. Fundamental principles
The Mitsubishi Paper Mills Group intends to make an active contribution to the protection of the global environment
and the creation of a sustainable society. To this end, the Group will not only strive to help prevent global warming andpreserve biological diversity, but also to earn the trust of all its stakeholders through the sustainable use of forest
resources.
2. Basic policies
1.Promote measures to counter global warming
technologies and products
2.Protect and nurture forest resources, with appropriate
5.Enhance environmental management systems
care given to the preservation of biological diversity
6.Enhance environmental communication
3.Promote a sound material-cycle society
7.Appropriate emergency response
4.Develop environmentally friendly production(Revised July 2010)

Environmental Management Structure
We are building a structure with voluntary initiatives tospecifically promote the fundamental principles and basic
policies of our Environmental Charter. The Mitsubishi Paper
Mills Group practices environmental management and has
acquired ISO 14001 certification for its major production
facilities.
The Technology & Environmental Department conducts
internal environmental audits once a year for each of our main
mills and checks the level of its environmental performance.

（TJ）

Environmental Director
Environmental
Conservation Committee

Research HubMill

Affiliated Company

Branch Manager

Mill Manager

President

Legal Manager
Environmental Manager

Chemical Substance Management

Environmental
Management Division

Mill Environmental Conservation Committee
Special Subcommittees

With the aim of preserving the environment and ensuring product safety with respect to chemical substances throughout our
entire supply chain, the Mitsubishi Paper Mills Group formulated Chemical Substance Management Guidelines (revised April2016) in conformance with various regulations. The guidelines take into account the impact on the environment and humanhealth, as well as social trends and other considerations. Based on these guidelines, all our mills, offices, and affiliatedproduction companies control and handle chemical substances properly and efficiently.

Chemical Substance Management Guidelines (excerpt)
1. Management of chemical substances used in the manufacturing process
With the aim of minimizing the impact of chemical substances used in the manufacturing process on the environment,
people, and organisms, we adhere to the Law concerning Pollutant Release and Transfer Register (“PRTR Law” incontrolling chemical substances in every business process, namely procurement, storage, production, emission, anddisposal.
2. Management of the constituent chemicals of products
We formulate these guidelines and control the constituent chemicals of products with the aim of offering safer
products by conforming to the basic principle of "never creating products using highly hazardous substances orsubstances that have a significant impact on the environment, people's health, or ecosystems."

35 Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment

40
10,00020

0FY 2006■ Fossil fuels

0

FY 2017■ Purchased electricity■ Renewable energy

FY 2006

FY 2017■ Energy from waste

Logistics segment initiatives

President

Technology &Environmental Department60

20,000

Eco Rail Mark Certification
Under the Eco Rail Mark system, companies or products are certified and allowed to use theEco Rail Mark if they use a certain volume of eco-friendly rail freight transport. Usage of the markoffers consumers a standard for making decisions.
Mitsubishi Paper Mills acquired Eco Rail Mark certification in October 2010, becoming the firstto do so in the paper industry. Since then, we have contributed to global environmental
preservation through the dissemination of the Eco Rail Mark.

Green Management Certification
Namitsu Co., Ltd., a distribution company affiliated with the Mitsubishi Paper Mills Group, has acquired Green Management
Certification at its main facilities and is reducing the level of CO2 emitted by its trucks during transport. Ongoing efforts that
include the use of start-stop systems improve fuel efficiency and cut down on fuel usage. Aimed at reducing the environmental
impact of the transport industry, Green Management Certification involves having the Foundation for Promoting Personal
Mobility and Ecological Transportation audit and register businesses that have reduced the environmental impact of theiroperations by a certain degree in accordance with the Green Management Promotion Manual.

Initiatives for the office and the home
We are taking a number of measures to reduce energy usage in office buildings,
including meticulous efforts to turn off lights. In addition, the Speciality Materials R&D
Laboratory tracks the building’ s power usage through a demand monitoring device
and equalizes power load through peak shifting.
The Mitsubishi Paper Mills Group also promotes participation in the household
environmental accounting booklet program, raising awareness for environmental
preservation by having employees monitor their household CO2 emissions.

Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment 36

Relationship with the Environment
Preserving Biodiversity

Effectively Utilizing Resources

Morino Chonai-kai"Forest thinningsupport paper"production report

Forest thinningsupport paper
Forest thinningpromotion
expensePrinting
companies

Paper distribution
companies

Forest thinningsupport paper

Forest thinningpromotion
expenseForest thinningpromotion
expenseMorino Chonai-kai
executive office（Office Chonai-kai,
environmental NPO）

Certificate of contribution to forest thinningand usage of wood from thinning

Report of receiptof thinned wood

Forest thinningsupport paper
Forest thinningpromotion
expenseForest thinning supporter companies, etc.

Forest thinning
reportWood from thinning

Paper manufacturers

Forest thinning promotion expense

In conformance with FSC forest certification systemstandards, the Mitsubishi Paper Mills Group makes careful use
of wood feedstock produced under proper forest management,
and also works to popularize the forest certification system
under the forest certification system. At the same time, we areengaged in a number of efforts to help forest preservation andsupport more prosperous local forestry and logging industries.
This includes promoting forest thinning through Morino
Chonai-kai, a forest neighborhood association, which is acollaborative project done in conjunction with Office Chonai-kai,an environmental NPO, as well as promoting the sustainable
use of second growth hardwood produced in Iwate Prefecture.

Forestry
Associations

Forest preservation activities

Recycling waste

Mitsubishi Paper Mills effectively utilizes incinerator ash produced by the Hachinohe Mill's recycle boiler and coal boiler tomake raw material for cement. To utilize the ash in applications other than cement production, we developed a recycledconstruction material named “Reglobe.” Reglobe is expected to be used as a weed control material, sand-blow prevention
material, backfill material, etc. To capitalize on expected sales volume growth for the product, in December 2016 we began
operating mass production equipment capable of producing 100 tons daily.

Ecosystem Academy
We opened Ecosystem Academy in 2010 with the aim of promoting a better understanding of preventing global warming andenhancing biodiversity from the standpoint of forest preservation by paper manufacturers. With hands-on environmental
education, forest surveys and research, and information dissemination as the three core activities, the academy is focused oncontributing to environmental preservation by passing on to a range of people the knowledge and experience that Mitsubishi
Paper Mills has accumulated over the years.
Reglobe recycled construction material

Hands-on environmental education

The product, a mixture of incinerator ash, water, and chemical agents, meets the standards set forth in the Ordinance for
Enforcement of the Soil Contamination Countermeasures Act and the Environmental Standards Concerning the Pollution of theAir, Water, and Soil by Dioxins. It has also received Eco-Mark certification (No. 14131006) and has been certified as a productfor the Aomori Innovative Product Certification Program.
As a weed control material, it has been used in applications including the construction of the Hachinohe Taga multipurpose
athletic field, the JFL Vanraure Hachinohe's home stadium. With plans under way to use the product at locations where muchtime and energy is spent removing weeds, the Institute of Vegetable Research at the Aomori Prefectural Industrial Technology
Research Center (Rokunohe Town) is currently using it at a solar power installation to test the product's effectiveness at
preventing weed growth. As a sand-blow prevention material, we have supplied 2,700 tons of the product for the No. 2 Wharf
reclamation project (19,000 m²) in the Hattaro Area at Hachinohe Port being conducted by the Hachinohe Port and Airport Officeof the Ministry of Land, Infrastructure and Transport Tohoku Regional Development Bureau. We are now advertising the costcompetitiveness of the product as a backfill.

In addition to learning about the environment, thisinvolves using company-owned forests to makeobservations, take measurements and plant trees, andpapermaking and creating paper crafts to experience
Japanese-style manufacturing. In 2016, a total of 860
people took part in 21 sessions, ranging from havingclasses at elementary schools in Kyoto, Tokyo, andAomori, and tree planting events.

Forest surveys and research

Reglobe production facility

Tree planting event at a company-owned forest in Murabi(Fukushima Prefecture)

Along with conducting vegetation and growth surveys in company-owned forests, we work with the Wild Bird Society ofJapan's Shirakawa Chapter to conduct wild bird surveys, and also create birdwatching areas.

Information dissemination
We hold regular environmental seminars led by instructors engaged in pursuits that include forestry, environment preservation,and teaching at universities. Four environmental seminars were held in 2016 in Tokyo and Fukushima. The themes were "Forest
Development in Tokyo," "The Current State of Forests," "Transitions in Vegetation," and "Birds of the Forest."

Participation in the Japan Business Initiative For Biodiversity (JBIB)The JBIB is a group of companies actively working towards preserving biodiversity. Mitsubishi Paper Mills has participated in
JBIB activities since fiscal 2012, deepening relationships with companies undertaking advanced environmental initiatives while
engaging in forest preservation activities focused on maintaining biodiversity.

37 Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment

FSC® C021528

Testing weed growth prevention effectiveness near solar power panels

Construction using Reglobe as a sand-blow prevention material

Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment 38

Relationship with the Environment
Ecobalance

The raw materials and energy used in paper production are referred to as "resource inputs," while the things emitted whenpaper is produced are referred to as "environmental emissions." Figures from Mitsubishi HiTec Paper Europe GmbH (two mills inGermany: the Bielefeld Mill and the Flensburg Mill) are also provided as a reference but are not included in the total for the
Mitsubishi Paper Mills Group as environmental regulations differ in Germany.

Resource inputs
Main raw materials (1,000 tons)
Imported wood chips
Domestic wood chips
Purchased wood pulp
Used paper
Inorganic pigments

Mitsubishi Paper Mills Group(Domestic)

757
394
33
43
62

Three mills
One business officeSpeciality Materials R&D
Laboratory

Energy(1,000kl crude oil equivalent)
Fossil fuels
Purchased electricity
Biomass
Refuse-derived fuel

260
37
330
40

Industrial water

121

Municipal water (million tons)

Kitakami HiTec Paper Corp.
KJ SPECIALTY PAPER
Co., Ltd.
Toho Tokushu Pulp
Co., Ltd.

Atmospheric Release

CO2 emissions (1,000 tons)
NOx emissions (1,000 Nm³)
SOx emissions (1,000 Nm³)
Dust and soot

957
876
272
459

Released into water systems
Amount released (million tons)
COD (tons)
SS(tons)

122
7,123
3,723

Waste (1,000 tons)
Waste generated
Amount repurposed
Final disposal amount

105
84
11

860
Paper (1,000 tons)
Photosensitive materials (million m²) 26
51
Wood pulp (1,000 tons)

43
CO2 emissions (1,000 tons)
1,954
Wastewater (1,000 tons)

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Speciality Materials R&D Laboratory,
Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd., KJ SPECIALTY PAPER Co., Ltd.

Volume of PRTR-listed substances emitted and transferred in FY 2017

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Kitakami HiTec Paper Corporation, KJ SPECIALTY PAPER Co., Ltd.
kg/year (dioxins: mg-TEQ/year)
Amount emitted
Amount transferred
No. PRTR Class 1 Designated Chemical Substances Cabinet order No.
Sewer systems
Off sites
Atmospheric Water systems

1
2
3
4
5
6
7
8
9
10
11
12
13

Ferric chloride

Silver and its water-soluble compounds
Chloroform

Cyclohexylamine

2,2 -Dibromo-2-Cyanoacetamide
Dioxins

Triethylamine
TolueneHydrazine

Hydroquinone

Boron and its compounds
Formaldehyde

Methylnaphthalene

71

0

0

0

0

82

0

0

0

0

127

21,600

4,000

0

0

154

0

0

0

0

210

0

729

0

0
2.5

243

0

63.6

0

277

1,900

0

0

0

300

18,700

0

0

9,800

333

0

0

0

0

336

0

0

120

0

405

0

0

270

0

411

174

1

59

951

438

390

0

0

0

PCBs

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site

The detoxification of hardware (transformers and capacitors) containing high concentrations of PCBs is outsourced to theJapan Environmental Storage & Safety Corporation (JESCO). To date, about 91% of preregistered transformers and capacitors
have been rendered harmless. We expect to render all preregistered transformers and capacitors harmless within fiscal 2018.
*We are also gradually processing hardware other than transformers and capacitors that contain high concentrations of PCBs,
such as stabilizers.

39 Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment

Environmental impact data

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Speciality Materials R&D Laboratory,
Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd., KJ SPECIALTY PAPER Co., Ltd.

Resources

Fossil fuel-based energy consumption
Fossil fuel-based energy consumption rate
Municipal water used

FY 2006

FY 2015

FY 2016

FY 2017

Targets

15,131

10,695

11,174

11,572-

GJ/product-tons

13.6

11.9

12.1

12.5

12.1

Million tons

125

126

127

121

-

126

122

-

TJ

Wastewater

Million tons-

124

CO2 emissions*1

1,000 tons

1,164

947

959

957

920

NOx

1,000 Nm³

1,076

849

910

876

-

SOx

1,000 Nm³

247

263

223

272

-

tons

-

356

406

459

-

COD

tons

7,717

6,763

7,051

7,123

-

SS

tons

3,417

3,749

3,730

3,723

-

Waste generated

1,000 tons

120

91

99

105

-

Final disposal amount

1,000 tons

15

9

8

11

-

Percentage vs.
amount produced 1.40%

1.09%

0.95%

1.23%

0.30%

(FY Achieved)（FY2021）

Atmosphere

Soot and dust

Product soldFor reference only: Two mills in Germany
Purchased wood pulp (1,000 tons) 127
Used paper (1,000 tons)
0
Municipal water usage (1,000 tons) 2,630

Environmental emissions

Environmental Indicators（FY2021）

Water quality

Waste

Final disposal rate*

2（FY2021）*1. For CO2 emissions from purchased electricity, we use the CO2 emissions coefficient provided by the Federation of Electric Power Companies of Japan.
*2. Final disposal ratio = (final disposal amount / amount produced) x 100

Environmental Accounting in FY 2017

Scope of statistics: Head Office, Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Speciality Materials R&D Laboratory,
Kitakami HiTec Paper Corporation, KJ SPECIALTY PAPER Co., Ltd.
Statistical method: Conforms with the Environmental Accounting Guidelines 2012 issued by the Ministry of the Environment

Environmental conservation costs
Category

million yen
Investment Cost

Primary Initiatives(1) Indirect business costs

Countermeasures against air pollution, water pollution, odors, noise, and
1. Pollution control costs
vibration
Domestic afforestation, overseas afforestation, and energy conservation
2. Global environmental conservation costs measures
Recycling of waste paper and other products, countermeasures against waste
3. Resource circulation costs
products(2) Upstream/downstream costs(3) Administration costs(4) R&D costs(5) Social activity costs(6) Environmental remediation costs

Recovery and recycling of container and packaging materials
Environmental education, environmental management systems, andacquisition of certifications

54

1,342

307

0

246

1,135

337

337

5

60
316

Greenification, environmental beautification, and environmental data disclosure

30

Fees for pollution-related health damage

29
34

980

Economic benefit of environmental conservation measures

3,252

million yen

Category

Details of benefits

Revenue

Benefit of reusing pallets

470

Profits from sale of repurposed resources

13

Cost savings from energy efficiency

27

Cost savings from improved material yield

76

Total

2,477

Development of environmentally conscious products

Total

Cost savings

607

Amount586
Mitsubishi Paper Mills Corporate Report 2017 Relationship with the Environment 40

Relationship with Employees
The Mitsubishi Paper Mills Group is making continuous efforts to improve working environments, fully
leveraging the abilities of every employee and making them feel comfortable and fulfilled based on our
Principles and Guidelines Concerning Human Rights and Labor Practices (established July 2009).

Principles and Guidelines Concerning Human Rights and Labor Practices■ Principles
We respect the personhood of every employee and make safety the top priority in the workplace while fully leveraging
each person's abilities and creating comfortable and fulfilling work environments.
■ Guidelines
1. Respect human rights and forbid discrimination
We shall work to maintain wholesome work environments, respect the human rights of every employee, neverengage in sexual harassment, power harassment, or other practices that ignore human rights, and never take actions
that are discriminatory on bases that include one's birth, nationality, race, ethnicity, religion, gender, age, disabilities, oracademic background. We shall never use child labor or forced labor. We shall also ensure the proper handling of ouremployees' personal information in accordance with the Act on the Protection of Personal Information.
2. Ensure workplace safety and healthWe shall make safety and health the top priority in the workplace, work to maintain safe and healthy work
environments, and know and comply with the Industrial Safety and Health Act and related laws.
3. Comply with labor laws
We shall strive to maintain comfortable and wholesome work environments in compliance with the Labor Standards
Act and related laws.

FY 2017 Safety Awards■ Received the Class 5 (Gold Award) SME
Zero-Accident Certificate
・Toho Tokushu Pulp Co., Ltd.’ s Kitakami Mill■ Received Safety Commendation at the 56th
National Paper Pulp Safety and HealthConference
・Excellence in Safety Award
Mitsubishi Paper Mills' Hachinohe Mill Collaboration
Committee

Efforts to Create Comfortable Work Environments

We believe that achieving comfortable work environments and a good work-life balance contributes not only to healthier, more
prosperous lives for employees but also makes the company more competitive. The Mitsubishi Paper Mills Group is undertaking
a number of initiatives out of a desire to give the Group more vitality and make it a fulfilling place to work.

Regular program reviews done in conjunction with our labor union

Occupational Safety and Health Initiatives

In accordance with our Group-wide Safety and Health Management Guideline, which incorporates our guiding principles
concerning safety and health, we are also making efforts as a unified group from the viewpoint of CSR.

Group-wide Safety and Health Management Guideline■ Fundamental principle
With the view that the safety and health of all people involved in the business activities of the Mitsubishi Paper Mills
Group takes top priority, we will foster a corporate culture where people can feel good about working and achieve
wholesome work environments where none come to harm.

Together with our labor union, we hold regular meetings of a specialized committee to review human resource programs andhold labor-management discussions on creating better programs. Meetings focus on issues such as wages, retirement benefits,
the taking of annual paid leave, hours being worked, the reemployment situation, and work-life balance.

Total hours worked annually（Hours）
2,050

100
■

2,000

◆

1,950

Based on the results of analyzing the state of safety in the Group during thelast fiscal year, we carried out special audits of accidents caused by unsafe
practices to prevent the recurrence of serious accidents arising from unsafe
practices. In addition, we conducted wide-ranging activities that included
establishing a stress check system, building a system for conducting chemical
substance risk assessments, and having workplace patrols by women for the
fresh perspective they bring.

●

■

■

◆

●

◆

■

■

■

◆

◆

◆
◆

1,900

■

1,850

●

■

■

80

◆

◆

60

●

●

◆

◆

2008

2009

●

●

●

●

◆

◆

◆

◆

2010

2011

2012

2013

●

●

●

●

◆

◆

◆

2014

2015

2016

◆

Society

◆

40

●
●

●

●

●

20

●
●

1,800

2008
●

Accident
frequency rate
2.0

■

◆

Fiscal 2017 activities

Percent of annual paid leave days taken（%）

Lost time accident frequency rate
Workplace patrols by female employees (Takasago Mill)

2009

2010

2011

Mitsubishi Paper Mills

2012
◆

2013

2014

2015

Industry-wide

■

2016

2017（FY）

Manufacturing*Industry-wide and Manufacturing data is from the Ministry of Health,Labour and Welfare's Monthly Labor Survey(Companies with 500 employees or more; general workers only).

0●

Mitsubishi Paper Mills

2017（FY）*Society: From the Ministry of Health, Labour and Welfare's
General Survey on Working Conditions.

1.5

◆

◆

●
◆

●

●

●
◆

◆

◆

◆

●
◆

●

◆

●

0.5
0.0

Work-life balance initiatives

●

●

1.0

◆

●

2008
●

2009

2010

Mitsubishi Paper Mills

2011

2012
◆

2013

2014

2015

2016

2017（FY）

Japan Paper Association (industry statistics)

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site,
Kitakami HiTec Paper Corp., KJ SPECIALTY PAPER Co., Ltd.,and Collaboration Committees for each site

41 Mitsubishi Paper Mills Corporate Report 2017 Relationship with Employees

Hands-on hazardous situation training (Kyoto Mill)To tackle the recent problem of children on waiting lists for day care, we extended the childcare leave period to allow all
employees to have two opportunities to get their children into a childcare facility in April.
We are also extending the period during which employees can work shortened hours to provide care for a first grader to theend of the school year. This is to help with the "first-grade wall" problem, which refers to how it becomes difficult to getmorning-to-night childcare for children coming out of nursery school and going into first grade.
Furthermore, we have revised our programs based on revisions to the Child Care and Family Care Leave Law made inJanuary 2017. In line with the nature of the revisions, we are improving our balance support programs with a focus on nursing
care, including nursing care leave and shortened working hours to provide nursing care.
Mitsubishi Paper Mills Corporate Report 2017 Relationship with Employees 42

Relationship with Customers
In order to provide customers with products they can feel safe using, we formulated a Product Safety Code(established March 1995) and are proceeding with efforts to improve product safety. Along with maintaining
legal compliance and conducting fair marketing practices, we will continue to actively communicate with ourcustomers to provide products that benefit society.

Product Safety CodeCommunication with Customers

In the Mitsubishi Paper Mills Group, sales departments have joined forces with R&D and production departments to provide
products that satisfy the needs of customers around the world.
Our R&D and production personnel accompany sales staff and gather feedback from customers as we, a corporate group thatis consistently on the cutting edge of technology, make efforts to create products that benefit the world at large.

Mitsubishi Paper Mills believes that the role of a company in society is to provide safe and useful products along withsatisfying services to customers, and we have utilized our excellent technologies to provide safe products to society.
From here on, we will steadily implement the following actions throughout the entire company in order to maintain stable
management and continue providing society with safe products and satisfying services that meet the needs of the times.
(1) We will strengthen our quality control systems and product safety control systems, and will provide products
confirmed to be safe using state-of-the-art science and technology.
(2) We will work to stabilize the manufacturing process to always provide products of uniform quality.
(3) We will provide accurate and reliable information on the correct way to use products and the safety of products.

Quality Control System

To quickly respond to customer feedback and quality issues, we use a company-wide quality control system that has thepresident at the top and puts mill managers in charge of quality control at each of our mills.
The Mitsubishi Paper Mills Group's main production facilities have acquired ISO 9001 certification and are working to maintainand improve product quality.

President

Officer in chargeof technology

Printing Paper Business
Division General Manager
Imaging Division
General Manager
Speciality Materials
Division General Manager

Product safety activities⇨◆ Legal compliance departments

Product Safety Judgment Panel◆ Outside party negotiation departments◆ Education departments◆ Consumer support departments

Product Liability (PL) Subcommittee

43 Mitsubishi Paper Mills Corporate Report 2017 Relationship with Customers

FESPA 2017 screen and textile printing exhibition (Hamburg)

IOTE 2016 — The 8th Shenzhen International Internet ofThings Technologies and Smart China Exhibition (Shenzhen)

Hachinohe, Takasago, Kyoto,
Pressboard, Speciality Materials,
Kitakami HiTec Paper
KJ SPECIALTY PAPER

With the goal of actively promoting specific product safety initiatives, we have established a Product Liability (PL)Subcommittee and a Product Safety Judgment Panel under the Product Liability (PL) Committee, whose membership is
composed of individuals appointed from every head office division, every mill, and affiliated companies. This committee supports
every division in their product safety management activities.

⇨

Page 2017 print media event (Tokyo)

All business segments

Product Safety Control System

Product Liability (PL) Committee

The 10th Asia (Beijing) International Content Networking Exhibition◆ Product safety assurance departments

Encouraging the Worry-Free Use of Our Products
The products the Mitsubishi Paper Mills Group provides are made from materials proven to be safe.
Along with swiftly obtaining information about new regulations and toxicity, all departments and affiliated companies involved
share information with each other and conduct thorough safety inspections of materials used.
With respect to chemical substance control, we have established Chemical Substance Management Guidelines and Green
Procurement Guidelines and strictly control everything from the raw materials we use to our products' constituent substances.
Also, not only do we ensure compliance with laws and regulations, we also meet voluntary standards set by the industry
according to product application and satisfy the demands of individual customers.
We will contribute to the betterment of society by continuing to provide eco-friendly, safe products that customers can feel safe
and comfortable about using.

Mitsubishi Paper Mills Corporate Report 2017 Relationship with Customers 44

Relationship with Communities
The Mitsubishi Paper Mills Group aims to grow together with communities and has put formulated its Social
Contribution - Direction of Activities (formulated in January 2008) to proactively interact with communities
through its business activities. Through activities such as those conducted by the Ecosystem Academy (seepage 37), which uses forests owned by Mitsubishi Paper Mills, we undertake a number of social contribution
activities that take advantage of the characteristics of each of our business sites.

Coexistence with the Community

Social Contribution - Direction of Activities

Our Takasago Mill participates in the Takasago lantern
festival and provides a company facility as a venue for jazzconcerts and other events.

● Environmental protection: We will contribute to the creation of a recycling society to maintain our precious global
environment.
→Our efforts to conserve the global environment include supporting FSC®-certified forests, supporting forest
thinning, etc. with the cooperation of NGOs, and protecting the environment through our business activities.
● Living alongside local communities: We are strengthening our social contributions rooted in local communities.
→Mills and offices play key roles actively engaging in local community activities and contributing to theirdevelopment.
● Supporting volunteer activities: We support voluntary social contributions by our employees.

In addition to actively participating in community events, our sites welcome and deepen our interaction with community
members through efforts that include allowing our facilities to be used free-of-charge for events.

Sponsorship of the Takasago lantern festival

Opening up our row of cherry trees to
the general public
To share the enjoyment of viewing its cherry trees with thecommunity, our Kyoto Mill lets the general public see therow of cherry trees on its grounds when they are in bloom.
We also offer photography and printing services at theevent, which has met with an excellent response every year.

Communication with Community Members

As members of their communities, every business site in the Group proactively participates in local activities and furthers
communication with every community member in a variety of ways.

The Uomachi Club, all lit up (Takasago Mill)

Dialogue with community members

Row of cherry trees made viewable to the general public (Kyoto Mill)Our business sites regularly hold dialogues with community members as a means to learn their thoughts about and needs
concerning our business, and we work to help stimulate local economies through our business activities.

■ Shirakawa Site — Explanatory Meeting on the State of Operations (April)■ Kitakami HiTec Paper Corporation — Community Gathering (December)■ Hachinohe Mill — Environmental Monitoring Meeting (November)etc.

Students’ Work Experience
Mitsubishi Paper Mills regularly takes in local students looking to experience life in the workplace. Through lecture and actual
work experience in various workplaces, the students use this program as a means to gain valuable experience wholly different
from their school life.

Students’ work experience program for middle school students(Takasago Mill)

45 Mitsubishi Paper Mills Corporate Report 2017 Relationship with Communities

Students’ work experience program for middle school students(Kyoto Mill)FSC® C021528

Contributing to the Community Environment
Participation in the Nagaokakyo City
Environmental Fair

Participation in Fuji Beech Forest
Development Project

Every year in November, Nagaokakyo City holds its
Environmental Fair as a means to promote better
environmental awareness among residents.
In fiscal 2017, the Environmental Fair was host to a
traveling class put on by the Ecosystem Academy at the
Kyoto Mill. In addition to teaching visitors about Mitsubishi
Paper Mills' environmental initiatives, the class brought
further excitement to the event.

Every year, KJ SPECIALTY PAPER takes part in Fuji
Beech Forest Development Project, put on by the city of
Fuji. Last year, 2016, marked the Company's ninth year ofparticipation and saw the planting of 2,000 beech and otherhardwood tree saplings. We will continue lending our
support for activities aimed at preserving the naturalenvironment of the Mt. Fuji foothills.

Traveling class at the Environmental Fair (Kyoto Mill)

Participants in Fuji Beech Forest Development Project(KJ SPECIALTY PAPER)
Mitsubishi Paper Mills Corporate Report 2017 Relationship with Communities 46

Relationship with Communities
Making Use of our Business Activities

Development of FSC® certified forests
Since January 2014, Mitsubishi Paper Sales employees have, with the support of
Tanaka Forestry Co., Ltd. , which is located in Hinohara Village , Tokyo, undertaken
volunteer activities in Tanaka Forestry’ s FSC-certified forests once a month. The
activities include mowing grass, maintaining walkways, and cleaning up trash. We
also began forest thinning in 2016, using the thinned wood to create walkway stairs
and otherwise gradually expand the scope of our activities.
We began these maintenance efforts to deepen understanding of forest
conservation, and there is no end to what the forest can teach us. We hope tocontinue these activities in the months and years to come.

Contributing to Local Communities
Volunteering at the opening ceremony of
the Kiboukyou Iwate Kokutai(National Sports Festival of Japan)

Support for calligraphy performanceat Hachinohe Higashi High School

Forest Development Using Forest Thinnings(Mitsubishi Paper Sales)

Support for the Aomori Prefecture Reflective
Materials Strategy traffic safety program

Kitakami HiTec Paper Corporation sent a volunteer teamto provide medical and health services at the opening
ceremony of the Kiboukyou Iwate Kokutai national sports
festival held in Iwate Prefecture in October 2016.

At the Ecosystem Academy's traveling class session heldat Hachinohe Tagadai Elementary School in February 2017,
the Hachinohe Mill donated reflective key holders as part of
the Aomori Prefecture Reflective Materials Strategy traffic
safety program.

Volunteer activity participants

Donating reflective key holders (Hachinohe Mill)

Support for charity organizations
Germany-based Mitsubishi HiTec Paper Europe GmbHprovides support to Wagemut, a charity organization locatedin Flensburg. Wagemut provides counseling to girls andboys who have been victims of sexual assault and important
information about sexual abuse.

The Hachinohe Mill regularly provides Hachinohe Higashi
High School's calligraphy club with the jumbo-sized paper
used at calligraphy performances. In addition to being afrequent participant in the Shodo Performance Koshien, anational calligraphy competition, the high school gives
outstanding performances at various events in the area. We
look forward to lending our support to future calligraphy
performances by Hachinohe Higashi High School.

Photo printing service

Braille Calendar

Leveraging the technologies of Mitsubishi Paper Mills'
Imaging Media Business, we provided photography andprinting services at events held near the Kyoto Mill and the
Kitakami HiTec Paper Corporation.

The release of the 2017 edition of the Braille Calendar isthe 21st edition, since the first edition was released in 1997.
The calendar, which has contained food recipes in recent
years, has been well received by those it has been donatedto, such as social welfare organizations and the Japan
Braille Library, as well as the visually impaired who use thecalendar.

■ Takenoko Festa and Garasha Matsuri (Kyoto Mill)■ Kitakami Tenshochi Sakura Festival(Kitakami HiTec Paper Corporation)

Support for Coming of Age Day event
in Fukushima Ward, Osaka

Namitsu supported a raffle as part of the Coming of Age
Day Memorial Gathering event, which was held in January
2017 in Fukushima Ward, Osaka, where the company has
its head office. Through efforts such as these, we willcontinue to strengthen relations with community members
and grow with the community.

Calligraphy Performance at Hachinohe City Hospital

Takenoko Festa (Kyoto Mill)

Braille Calendar (2017 edition)

Philanthropic Expenditures
Mitsubishi Paper Mills is a member of the Keidanren 1% Club and is a company which continually contributes to improvingsocial sustainability. Whether it's in academics, research, or education, our aim is to be of benefit to society in many fields.
（10,000 yen）
6,000

Breakdown of philanthropic expenditures (FY 2017)

Philanthropic Expenditures

Regional activities/cultural preservation
International exchange, etc
Environment

4,000

Social welfare

Culture and arts
2,000

Academics, research, education0
2012
Donating to charity organization Wagemut

47 Mitsubishi Paper Mills Corporate Report 2017 Relationship with Communities

2013

2014

2015

2016

2017（FY）

Raffle event at the Coming of Age Day Memorial Gathering

FSC® C021528

Mitsubishi Paper Mills Corporate Report 2017 Relationship with Communities 48

Fiscal 2017 Activity Results
In fiscal 2017, we selected our two top priority issues: 1) ensuring the effectiveness of corporate governance and 2) enhancing
activities to ensure safety and health, and made efforts towards improving corporate value. We also reduced industrial waste
and promoting environmental preservation activities. With respect to our products, we made efforts to enlarge our offering ofenvironmentally friendly products including FSC-certified paper.

Basic Policy 1. Strengthening our CSR management base

Key Issues
Action Plan
・Ensuring the effectiveness ・Ensure good governance based on the
Basic Policies on Corporate Governanceof corporate governance・Establishing a risk
management structure・Thoroughly familiarizing
employees with the
Corporate Code of
Conduct and theCompliance Conduct
Standards
・Ensuring strict legal
compliance

Activity Results
Evaluation
・Increased the number of outside directors, established a○
Nomination and Remuneration Committee, and othermeasures
Conducted awareness-raising activities at all business sites
・Assessed effectiveness of Board of Directors
・Review governance functions○
Reviewed Group governance functions
・Enhance structural preparations and our risk ・Conducted semiannual risk map reviews and updated risk○
awareness and assessments
map through a Group management
viewpoint
・Discussed actions to take should head ofﬁce functions be lost○・Conducted emergency liaison training that included all
・Discuss the drafting of a BCP
business sites and main afﬁliated companies
・Conducted compliance training for all executives and・Improve employees' understanding of the○presidents of afﬁliated companies in Japan
Corporate Code of Conduct, theCompliance Conduct Standards, and・Provided training for all line managers in the Group andhad this extended to all employees (including part-time
related laws through more robust
and contract employees) in the workplacecompliance education

・Conducted legal checks and provided legal counseling・Strengthen legal functions
Improved awareness of and prepared a system for・Promote a better understanding of laws
responding to anti-social elements
applicable to our operations, and enforcing
compliance
・Provided legal education for executives, line managers,
and those in charge of signing contracts
・Follow up on and instill information
Regularly issued the Compliance News newsletter as amanagement rules as well as information
measure to improve employees’ legal thinking
handling guidelines
・Audited and followed up on the status of information
management in each department
・Disseminated information including Second Mid-Term
・Promoting communication ・Further improve the IR information weManagement Plan details (analyst brieﬁng materials), theprovide on our website, etc.
with stakeholders
Corporate Report, the Annual Report, earnings brieﬁng,
・Disseminate information about new
and information related to General Meeting ofproducts, etc. (share information on
Shareholders
afﬁliated companies)
・Enhance and make use of the Head Ofﬁce ・Disseminated information about new products (2) andtrade shows (10)gallery
・Held 6 exhibitions and worked to exhibit products in a・Enrich our Corporate Report
timely fashion
・Issued Corporate Report 2016 in August in an integrated
report format
・Conducted awareness-raising initiatives at afﬁliated・Ensure compliance at subsidiaries in the・Expanding initiatives out
companies in Japan and thoroughly familiarized
wake of amendments to the Companies Act
to afﬁliated companies
employees with the governance system

Action Plan
・Promote CO2 emissions reductions in ourbusiness activities and employees' homes

・Study how to absorb more CO2 using
company-owned forests in Japan・Track trends of Scope 3 CO2 emissions

・Promoting activities topreserve biodiversity
・Improving and enlarging
our environmentallyconscious product lineup
・Reducing environmental
risk and impact

・Increase the percentage of FSC-certiﬁed
wood we procure・Participate in the Japan Business Initiative
For Biodiversity (JBIB)
・Promote environmentally conscious
products such as FSC-certiﬁed paper
・Develop and roll out new environmentallyconscious products
・Reduce industrial waste

・Improve environmental communication

49 Mitsubishi Paper Mills Corporate Report 2017 Fiscal 2017 Activity Results○

Key Issues
・Ensuring product safety

Action Plan・Enhance chemical substance management

・Ensuring product quality

・Enhance the activities of the Product
Liability (PL) Subcommittee
・Promote thorough adherence to ISO 9001
management and improve customer
satisfaction (fewer complaints, etc.)

・Rolling out new products
based on user input andbuilding optimal sales
channels

・Promote the commercialization of proposed
ideas and support business activities
focused on the customers' purchasing
process

Key Issues
・Enhancing activities toensure safety and health○○・Established and began acting on 2H priorities in response
to 1H results
All business sites, including Group companies, conducted
quality audits
・Worked to revitalize the system for making proposals suchas by establishing themes in line with social news

Activity Results
・Maintained and managed equipment subject to the
Revised Fluorocarbons Recovery and Destruction Law
Modiﬁed equipment to reduce fossil fuel consumption
・Drafted a new Forest Management Plan for acompany-owned forest in Shichinohe・Worked to acquire information related to Scope 3 andsurveyed industry trends
・Began discussing the implementation of Scope 3 forcertain Mitsubishi Paper Mills products
・Proactively used FSC-certiﬁed wood chips
・Acquired deeper insight through participation in regularmeetings

・Took part in Eco-Products 2016 and promoted the FSC logo
・Exhibited TDP at an overseas trade show, loaned some tousers, and otherwise promoted environmentally conscious
products
・Completed 91% of preregistered capacitors with highconcentrations of PCBs for detoxiﬁcation
Began business operation of the waste recycling
equipment at the Hachinohe Mill in December・Worked to hold a dialogue with community members byhaving Environmental Monitoring Meetings at Hachinohe Mill△○

Basic Policy 4. Taking further measures to provide our employees with a comfortable working environment○○

Activity Results
Evaluation
・Promptly revised controlled substance lists in light of○regulatory revisions
Each business site promptly reported to local
governments in accordance with regulations
・Shared information about legal revisions in a timely fashion○

・Promoting various
measures to improve
human resource
performance○

Action Plan
・Conduct special audits of accidents caused
by unsafe practices
・Take measures towards making stresschecks mandatory
・Take measures towards making chemical
substance risk assessments mandatory

・Have women participate in workplacepatrols・Enhance hiring activities to respond to
personnel requirements and ensure optimal
personnel placement
・Take measures in line with the spirit of the
Act on Promotion of Women's Participation
and Advancement in the Workplace, andpromote diversity

Activity Results
Evaluation
・Conducted two "special audits" and aimed to prevent△
accident recurrence・Established stress check system and conducted stress○checks・Safety personnel worked with the technology division and○other divisions to build an action framework, and put it into
action according to plan
・Incorporated female workplace patrols into scheduled○
workplace patrols at all business sites
・Hired general staff in preparation for business expansion○
and added more production ﬂoor operators
・Revised the systems for childcare leave and short working
hours for childcare○○

Basic Policy 5. Promoting activities that contribute to society

Basic Policy 2. Promoting environmental management

Key Issues
・Promoting activities toprevent global warming○

Basic Policy 3. Raising customer satisfaction levels by carefully addressing user needs

Evaluation○○

Key Issues
・Promoting community
support activities
・Promoting culturalcontribution activities

・Promoting activities of the
Ecosystem Academy

Action Plan
・Participate in regional activities at each of
our sites and maintain good relations in
those regions
・Provide on-going support focusing on the
Mitsubishi Group and related industry
groups・Entrench and expand efforts in the form of
on-going activities○○○

Top Priority Issues

Activity Results
・Every business site worked to strengthen relations withlocal communities through efforts that included
participating in events and providing paper・Made donations to and sponsored various related groups
and their projects

Evaluation○

・Conducted instructor development and skill improvement
training
Held interactive environmental education sessions inFukushima, Tokyo, Kyoto, and Hachinohe○(Evaluation)○: Target achieved○△: Insufficient implementation

○
○
○

○

FSC® C021528

Mitsubishi Paper Mills Corporate Report 2017 Fiscal 2017 Activity Results 50

Fiscal 2018 Action Plan
For fiscal 2018, we established "ensuring product quality" and "enhancing activities to ensure safety and health" as our two
top priority issues. In implementing our action plan, we will carry out the PDCA cycle in order to improve the quality of our CSR
activities, while at the same time incorporating feedback gained through dialogue with stakeholders as we undertake initiatives
characteristic of the Mitsubishi Paper Mills Group.

Basic Policy 3. Raising customer satisfaction levels by carefully addressing user needs

Basic Policy 1. Strengthening our CSR management base
Key Issues

・Ensuring the effectiveness of corporate governance・Establishing a risk management structure・Thoroughly familiarizing employees with the
Corporate Code of Conduct and the Compliance
Conduct Standards
・Ensuring strict legal compliance

・Promoting communication with stakeholders

・Expanding initiatives out to afﬁliated companies

Action Plan

・Ensure good governance based on the Basic Policies on
Corporate Governance・Review governance functions
・Enhance structural preparations and our risk map through aGroup management viewpoint
・Discuss the drafting of a BCP
・Improve employees' understanding of the Corporate Code of
Conduct, the Compliance Conduct Standards, and related laws
through more robust compliance education
・Strengthen legal functions
・Promote a better understanding of laws applicable to ouroperations, and enforcing compliance・Strengthen and enhance our system for responding to antisocial
elements
・Further improve the IR information we provide on our website andelsewhere
・Disseminate information about new products, etc. (share
information on afﬁliated companies)
・Enhance and make use of the Head Ofﬁce gallery
・Enrich our Corporate Report
・Step up efforts at continually promoting CSR activities

・Promoting activities to prevent global warming

Action Plan

・Promote CO2 emissions reductions in our business activities andemployees' homes
・Study how to absorb more CO2 using company-owned forests inJapan・Track trends of Scope 3 CO2 emissions

・Promoting activities to preserve biodiversity
・Improving and enlarging our environmentallyconscious product lineup
・Reducing environmental risk and impact

・Ensuring product quality

・Rolling out new products based on user input andbuilding optimal sales channels

Action Plan・Enhance chemical substance management
・Enhance the activities of the Product Liability (PL) Subcommittee
・Promote thorough adherence to ISO 9001 management andimprove customer satisfaction (fewer complaints, etc.); continue
to conduct quality audits
・Promote the commercialization of proposed ideas and support
business activities focused on the customers' purchasing
process

Basic Policy 4. Taking further measures to provide our employees with a comfortable working environment
Key Issues

・Enhancing activities to ensure safety and health・Promoting various measures to improve humanresource performance

Action Plan

・Strengthen efforts to eliminate serious accidents
・Improve safety system auditing
・Follow up on stress check results and enhance the system
・Acquire necessary personnel through enhanced hiring activities
and work to retain them・Discuss means of collecting information about and implementing
work style reform

Basic Policy 5. Promoting activities that contribute to society

Basic Policy 2. Promoting environmental management
Key Issues

Key Issues

・Ensuring product safety

Key Issues

・Promoting community support activities
・Promoting cultural contribution activities
・Promoting activities of the Ecosystem Academy

・Increase the percentage of FSC-certiﬁed wood we procure・Participate in the Japan Business Initiative For Biodiversity (JBIB)
・Promote environmentally conscious products such as
FSC-certiﬁed paper
・Develop and roll out new environmentally conscious products
・Reduce industrial waste
・Improve environmental communication

Action Plan

・Participate in regional activities at each of our sites and maintain
good relations in those regions
・Provide on-going support focusing on the Mitsubishi Group andrelated industry groups
・Entrench and expand efforts in the form of on-going activities

Top Priority Issues

FSC® C021528
51 Mitsubishi Paper Mills Corporate Report 2017 Fiscal 2018 Action Plan

Mitsubishi Paper Mills Corporate Report 2017 Fiscal 2018 Action Plan 52

Company Profile and Corporate Data (as of March 31, 2017)
Company Name
Mitsubishi Paper Mills Limited

Consolidated subsidiaries
19 in Japan, 7 overseas

Address
2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026, Japan

Mitsubishi Paper Sales Co., Ltd.
Kitakami Hitec Paper Corp.
Mitsubishi Paper Engineering Co., Ltd.
Ryoshi Co., Ltd.
Diamic Co., Ltd.
NAMITSU Co., Ltd.
Pictorico Co., Ltd.
Shin-Hokuryo Forest Products Co., Ltd.
Toho Tokushu Pulp Co., Ltd.
Hachinohe Paper Processing Co., Ltd.
KJ SPECIALTY PAPER Co., Ltd.
Takasago Paper Processing Co., Ltd.
MPM Shared-service Co., Ltd.
Hachiryo Co., Ltd.
Ryoko Co., Ltd.
MPM Operation Co., Ltd.
Kyoryo Chemical Co., Ltd.
Hokuryo Co., Ltd.
Hakuryo Paper Technology Co., Ltd.
Mitsubishi Paper Holding (Europe) GmbH
Mitsubishi HiTec Paper Europe GmbH
Mitsubishi Paper GmbH
Mitsubishi Imaging (MPM), Inc.
MPM Hong Kong Limited
Zhuhai MPM Filter, Ltd.
MPE Real Estate GmbH

Representative
Kunio Suzuki, President and Chief Executive Officer
Founded1898
Paid-in Capital
32,756 million yen
Consolidated Number of Employees
3,734
Shareholder Register Administrator
Mitsubishi UFJ Trust and Banking Corporation
Independent Auditor
Ernst & Young ShinNihon LLC
Main Business Activities
The Mitsubishi Paper Mills Group is primarily engaged
in the manufacture, processing, and sale of paper, pulp,
and photosensitive materials, and the main products
and services of each division are provided below.
Paper and pulp business
Coated printing paper, uncoated printing paper,
finely-coated printing paper, specialty printing paper,communication paper, hygienic paper, electricalinsulation pressboard, high-quality white paperboard,
specialty white paperboard, and other specialty paper,bleached kraft pulp, and specialty pulp
Imaging Media Business
Inkjet paper, photographic paper, base paper forphotographic paper, printing plate materials,
printing machines, CTP software, and treatment
chemicals
Speciality Materials Business
Chemical paper (decorative laminate base paper,
impregnated paper, wall coverings base, masking tapebacking, etc.), non-woven fabrics, filters, rewritable
media, battery separators, and specialty materials● Total number of authorized shares

90,000,000● Total number of outstanding shares

34,258,433● Shareholders

18,323(1,846 year-over-year decrease)● Composition of shareholders
March 31,
2017

31.9

March 31,
2016

31.6

March 31,
2015

30.1

Other Businesses
Engineering operations, sports facility management,
insurance agency business, real estate business,warehousing business, transport-related business

1.6
1.3
2.2

0

10

20

30

20.4

11.2

34.9

20.5

10.1

36.5

20,9

7.5

39.3

40

50

60

70

80

■ Financial institutions

90

100
（%）

■ Financial instruments business operators■ Other corporations■ Foreign corporations, etc.
■ Individuals, other

See Mitsubishi Paper Mills' website for more information.
⇨https://www.mpm.co.jp/eng/company/gaiyo.html

53

See Mitsubishi Paper Mills' website for more information.
⇨https://www.mpm.co.jp/eng/ir/index.html

Mitsubishi Paper Mills Corporate Report 2017 Company Profile and Corporate Data