March 13, 2003

Contribute to responsible forest management
through paper production.
- FSC certificated forest and paper products -Contents• Structural Reform Up to Today• Mid Term Plan 2003-2005• Management Policy 2003-2005• Management Planned Figures• Management Measures• Topics• Future vision of MPM Group

Structural Reform No.1
Structural Reform No.2
Bear the Fruit upon Structural Reform(1) Planned Figures of the Group(2) Sales(3) Operating Income(4) Ordinary Profit(5)-1 Profit Increase Breakdown (2003)(5)-2 Profit Increase Breakdown (2005)(6) Interest-bearing Debt Cutting(7) Employee Plan(1) Photographic (Kitakami’s Photo basepaper)(2) Ink Jet(3) German Operation(4) Global Environment Conservation

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Structural Reform
Up to Today

Structural Reform No.1

Structural Reform Up to Today
Reform of Production Sites were Over

6 Mills in Japan Î
4 Mills in Japan®2 Mills in Germany
In Japan: Production was concentrated toHachinohe, Kitakami, Kyoto, and Takasago
New Instalations for Developing the Business● Hachinohe:

7PM● Takasago:

12CM● Kyoto:9CM● Kitakami：As for New Strategic Site

N1PM•7RC● Bielefeld (Germany)：Multi-Purpose Coater 3CM
1Kitakami MillStructural Reform
Up to Today

Structural Reform No.2Management Resource Concentration toHigh Value Added Business5 Core BusinessDevelopment Oversea

A2 Coated, Thermal

2 Production Bases (Japan, Germany)

Ink Jet , Photo Base, CTP

3 Sales Bases (Japan, USA, Europe)Core Business Concentration’99: 31% J ’02: 42%

Basic Stance atHigh Value Added Products

Promotion ofEnvironmental Management
Reduce Environment Load
Protect and Grow the Forest
Improve Environment Management Level/Information Disclosure

2MPB（Mitsubishi HiTec Paper Bielefeld）

MPF（Mitsubishi HiTec PaperFlensburg）

Mid Term Plan
2003-2005

Bear the Fruit upon
Structural Reform’03-’05 Mid Term Plan : To bear the fruit
Structural Reform
Measures to survive were completed

2003-2005: Bear the Fruit
Measure to be a Winner● Measure to assure the profit out from structural reform● Period to recover and collect the structural reform investment

Prologue for the next Mid Term Plan (2006-)
3

Management Policy
2003-2005
To be a Company Group with “Sustainable High Profit”

1. Achieve the sustainable profit“Profit First” oriented

2. Improve the financial condition
Compress investment andreduce interest-bearing debt

3. Overhaul all categories of expense
4. Strengthen international competitiveness5. Product development by every employees
4Management
Planned Figures(1) Planned Figures ofthe Group

Planned Figures of the Group (Consolidated ＆ MPM)
(Unit: Billion Yen)

Consolidated(Unit: Billion Yen)

Plan

Forecast

MPM

2002

2003

2004

2005

236.0

240.0

250.0

260.0

Sales

Operating Income

1.0

8.0

12.0

16.0

Ordinary Profit

-3.5

5.0

9.0

Net Profit

-15.0

6.0

Interest-bearing Debt

228.0

Number of employees

PlanForecast

2002

2003

2004

2005

162.0

165.0

175.0

185.0

Operating Income

3.05.0

8.5

11.5

13.0

Ordinary Profit

-3.0

3.0

6.5

10.0

3.0

9.5

Net Profit

-15.0

5.5

2.5

8.5

222.0

203.0

190.0

Interest-bearing Debt

152.0

145.0

128.0

117.0

5,500

5,400

5,200

5,000

Number of employeeｓ

2,100

1,900

1,800

1,700

ROA(%)

-3.9

1.6

0.8

2.7

ROA(%)

-5.2

2.0

0.9

3.2

ROE(%)

-20.2

8.1

3.8

11.2

ROE(%)

-19.0

7.1

3.1

9.8

Equity Ratio (%)

18.5

21.3

22.6

25.1

Equity Ratio (%)

26.0

29.0

31.0

34.1

Operating Income/Sales (%)

0.43.3

4.8

6.2

Operating Income/Sales (%)

0.2

3.0

4.9

6.2

Ordinary Profit/
Sales (%)

-1.5

2.1

3.6

5.0

Ordinary Profit/
Sales (%)

-1.9

1.8

3.7

5.4

Sales

5

Management
Planned Figures（２） Sales
Sales Plan

Consolidated/MPM

236.0

240.0

250.0

Consolidated by Segments

260.0
17.0
44.0

162.0

165.0

175.0

185.0

195.0

16.0
45.0

200.0

17.0
48.0

205.0

MPM by Divisions

18.0
52.0

211.0

1.0
2.0

15.0

12.5

13.0

27.0

29.0

99.0

＊excl. internal sales＊

6

1.5
7.0

7.0
14.5

99.58.5
16.0
16.5
33.0

100.0

1.0
9.0
17.5
21.0
36.0

100.5

Management Plan (3) Operating Income
Operating Income Plan
Consolidated Operating Income by Segments

16.0

14.5

9.5
8.0
4.5
0.8

1.0

0.7
-2.2

-4.3

7

0.8

0.7

Management Plan

(4) Ordinary Profit
Ordinary Profit Plan

13.0

9.0

5.0
3.0
-3.0
-3.5

8

6.5

10.0

Management Plan(5)-1 Profit Increase
Breakdown

2002 VS. 2003 Ordinary Profit Increase Breakdown : Turnaround to Black(Unit: Billion Yen)

Ordinary Profit’02 and ’03

Profit Increase
8.5

5.0

Profit Increaseof MPM

2.0
6.0

3.0

2.0

2.0-3.0-3.5

9Management Plan(5)-2 Profit Increase
Breakdown

2002 VS. 2003 Ordinary Profit Increase Breakdown : Expansion of Profit
Ordinary Profit’02 and ’05

Profit Increase(Unit: BillionYen)

Profit Increaseof MPM

16.5

13.0
4.5

10.0
13.0

5.5

3.0-3.0-3.5

10Management Plan

(6) Interest-bearing
Debt Cutting

Plan to Cutoff Interest-bearing Debt
Consolidated Interest-bearing Debt

Interest-bearing Debt

(Unit: Billion Yen)
2002

97

Corporate bond, Loans etc.

218.0

190.0

Construction Cost

10.0-228.0

190.0SUM9381

228.0

73
222.0

203.0

2005

Payback 38.0 Billion Yen

Cash Flow: 2003-2005
INCOME

190.0

Net Profit

18.5

Depreciation

49.0

Real Estate Nakagawa

SUM

D/E Ratio

EXPENDITURE

11.5
79.0

38.0

Investment

29.0

Current Assets Increase

9.0

Dividend etc.

3.0

SUM

3.3
2.1

11

Interest-bearing debt
Payback

79.0

Management Plan

(7) Employee Plan

Consolidated/MPM Employee Plan
Number of Employees at the end of the fiscal year

6,298
5,500

5,400

5,200

5,000

2,587
2,100

121,900

1,800

1,700

Management Measures

7 Projects to Meet the Plan
1. Turnaround of Kitakami’s New
Facility
2. Profitability Improvement ofMPB/MPF
3. Build up of Aluminum CTPBusiness
4. Sales Management Improvement• Each project hassub-projects• Realized fast by directors’
strong leadership

5. Optimization of Mill Production
6. Strengthening of R&D
7. Review of Costs and Expenses
13

(1)Photographic

TOPICS[Kitakami’s Photo basepaper]

World Demand

Production Volume MPM

Photo paper and Photo IJ Paper

4.1

2002 Forecasted 1.75 Billion m2
3.0

1.9

2005 Expected

2.1

1.2

2.00 Billion m2

0.7

Basic Strategy

Pursue the synergy of resin coated basepaper with photo
paper and photo IJ paper

1. Production increase in Kitakami (2005 RC Basepaper 400 Mil. m2)
2. Promote collaboration with Kodak and others
3. Strong promotion in Asian market
4. Production increase of photo basepaper for Ink Jet
14TOPICS(2) Ink Jet

World Demand

Sales Plan MPM
22.5
19.5
17.0
13.5

Coated IJ Paper:2002

Basic Strategy
Maintain Leading Position
1. Personal use: Marketing of digital image output
2. Business use: Development of system supply business3. Promotion of high quality (e.g. Photo IJ) Ink Jet paper
4. Worldwide sales/production
15TOPICS(3) German Operation

World DemandPlan of MPB/MPF

38.5

39.0

40.0

1.7

42.0

Profit Increase
Breakdown ’02→’03
Product shift 0.8
Cost down
0.3
Sum1.12.3

1.0-0.1

Thermal: 2002

Basic Strategy• MPF: Concentration to non-fax thermal– Expansion of high vale added specialty.
– Product and production adjustment to grade increase and to small lot size.

• MPB: Shift to POS/FAX thermal– Commodity products with large volume, high productivity.
– Profitability improvement of carbonless paper.

Increased sales and production of Ink Jet paper– More Gloss and Matt Grades Production, sales base of Ink Jet paper in Europe.

• MPM: R&D covering the production in Europe
16

TOPICS(4) Global Environment
Conservation

Life Cycle Assessment (LCA)* is our fundamental tool
1. Overseas Afforestation
Chile, Australia (Tasmania, Aderade, Equadol)

2. Forest Management Certification (FSC)**
FSC certification for forest in Chile
FSC/CoC *** certification for production sites and sales department
Promoting domestic certification

3. Energy sift: Fossil fuels to Biomass/Refuse derived fuels
2004: Biomass/Refuse derived fuel boiler is on duty (Hachinohe mill)

4. Chemicals management
Reducing emissions/changing to environmentally benign chemicals
Information service（web access of MSDS etc.）
ReduceReduce CO
CO22 emission
emission
2005
2005Reduction
Reductiontarget
target20％
20％Reduction
Reductioncomparecompareto
to19901990emission
emission

Afforestation area/Paper production*LCA: Life cycle assessment is a tool for evaluating the environmental loadings for which the life
cycle of a product is responsible. Environmental loadings refer to demand for natural resources
and to emissions and solid waste.

** FSC: Forest Stewardship Council is an international non-profit organization to support

environmentally appropriate, socially beneficial and economically viable management of theworld’s forests.

*** FSC/CoC: Chain of Custody means the possibility to trace the certified wood content of a
product to a certified forest.

MPM ＝ Leader of ISO 14001・FSC/COC・ECFpulp・Biomass usage
17

Future vision of MPM
Group
Future vision of MPM Group

Becomean Overall Printing Media/System Supplierwith a paper supply as a core business.
Additionally to theCompetitiveness improvementof the commodity business,
MPM Group will aggressively expand its business byexploring.

New business is based on MPM’s key technology.
18

Note about forecasts
Forecasts of future performance contained in these statements are based on
the current expectations, estimates and assessment of the markets in which it
operates. A number of factors, many beyond the Company's control, could
cause actual results to differ materially from the forecasts contained in thesestatements.