Corporate Report 2018

Mitsubishi Paper Mills Ltd.

Editorial Policy
Mitsubishi Paper Mills publishes the Mitsubishi Paper Mills Corporate Report to provide stakeholders with abetter understanding of the Group's overall business activity. It provides a comprehensive accounting offinancial information that includes management measures and performance, as well as non-financial
information such as CSR activities.
In these pages, we report on the Mitsubishi Paper Mills Group's corporate value building activities, whichseek to bring about a more sustainable society.

■ ScopeIn principle, the companies included are Mitsubishi Paper Mills and its consolidated subsidiaries (20companies in Japan and 6 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.

■ Reporting Period

The reporting period is fiscal 2018 (April 1, 2017 to March 31, 2018), with some content falling outside thisperiod.

■ Guidelines Referenced

Table of Contents
To Our Stakeholders
Editorial Policy ･･････････････････････････････1

Compliance with the Antimonopoly Act･･･ ･････ 33

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

Preventing Corruption ････････････ ････････ 33

Table of Contents ････････････････････････････ 2

Disavowal of Anti-social Elements ･･････････ 33

Message from the President ･･･････････････････3

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

History of the Mitsubishi Paper Mills Group････････ 5
Main Offices and Mills ･･･････････････････････ 6
Management Measures ･･････････････････････ 7

Preventing Global Warming ･･･････････････ 36

Special Feature 1: Efforts of the Mitsubishi Paper
Mills Group to Build a More Sustainable Society･･11

Preserving Biodiversity ･･･････････････ ････ 37

Our Website

Business Activities ofthe Mitsubishi Paper Mills Group
Printing Paper Business････････････････････15
Imaging Media Business ･･･････････････････17

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

Research and Development ･･････････････････21■ CSR / Environment

Mitsubishi Paper Mills Group CSR■ Investor Relations
Annual Business Reporthttps://www.mpm.co.jp/eng/ir/library/annual-business-report.html

Speciality Materials Business ･･･････････････19

Mitsubishi Paper Mills Group CSR ･･･････････ ･23
The Way We See CSR ･･･ ････････････････ ･23
Key Issues(Material Issues) Concerning CSR
Activities ･･ ･･････････････････ ･･････････ 24
Corporate Governance ･･････････････････････ 25

Annual report

Overview of Corporate Organizations ･････ ････ 25

Mid-Term Management Plan

Board of Directors Effectiveness Assessments･･ 26

https://www.mpm.co.jp/eng/ir/library/annual-report.html
https://www.mpm.co.jp/eng/ir/library/midplan.html

Basic Policy on Corporate Governance ････････ 25■ Products and Services

CSR Promotion Structure ･･････････････････ 27■ Research and Development

Risk Management ･･････････････････ ･ ･････29

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

Environmental Management System ････････ 35

Special Feature

Overview of Business Segments ･･････････････15

https://www.mpm.co.jp/eng/env/report-index.html

Relationship with the Environment･･･････ ･････ 35
Chemical Substance Management･････ ･････35

Special Feature 2 : Launching a Household
Paper Business at the Hachinohe Mill ･･･ ････13

Corporate reports, CSR reports

Responsible Raw Material Procurement ･･･ ･････33

Consolidated Financial and Non-Financial
Highlights ･･ ･･････････････････････････････ 9

ISO26000GRI Sustainability Reporting Guideline, 4th Edition
Environmental Reporting Guidelines (2012 Edition), Ministry of the Environment

https://www.mpm.co.jp/eng/env/index.html

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

Compliance･･････････････････････ ････ ････ 27

Effective Use of Resources ････････････ ････ 38
Material Balance･･････････････････････････ 39
Environmental Indicators ･･････････････ ･ ･･･ 40
Relationship with Employees ････････････ ･ ･･･ 41
Occupational Safety and Health Initiatives･･･ ･ 41
Promoting Good Mental and Physical Health ･･ 41
Promoting Diversity ･･･････････････････ ････41
Job Safety Performance ･･････････････ ･････42
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 2018 CSR Activities ･････････････ ･ ･ ･ ･ ･ 49
Fiscal 2019 CSR Action Plan ･･･････････ ･ ･ ･･ ･ 51
Company Profile and Corporate Data

53

Information Disclosure ････････････････････ 30
Board of Directors and Corporate Auditors ････32

Cover photo：Tree planting event with invited guest Mayor Hiroshi Takahashi (in photo at left)(Company- owned forest in Nishigo-mura, Nishishirakawa District, Fukushima)

12

Message from the President■ The Mitsubishi Paper Mills Group will strive to realize its corporate philosophy
and will develop itself further in order to contribute to society.

Mitsubishi Paper Mills Group Corporate Philosophy■ We will fulfill our responsibility to society by conducting distinctive CSR activities
that leverage the strengths of our business portfolio and the managerial

resources of the Mitsubishi Paper Mills Group.

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

A corporate groupthat is always
on the leading edgeof technology

Kunio Suzuki,

President andChief Executive Officer

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

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

This year, the Mitsubishi Paper Mills Group celebrates the 120th anniversary of its founding in 1898. With a philosophy
centered on contributing to society through the power of technology, we have developed and supplied the world with highvalue-added products that meet the needs of the next generation, and have contributed to our information culture throughbusinesses such as publishing, printing, and photography.
Now, with the advance of a digital information society, we seek to become "Mitsubishi Paper Mills for high grade andinformation media" as a development-driven manufacturer. In addition to printing paper and printing plate materials andsystems for offset and other printing systems, we manufacture and sell media for almost all recording methods, such aspressure sensitive paper, thermal paper, electrophotographic paper and silver halide photo paper, and inkjet paper. Our
businesses also produce a vast product lineup for growing markets. This lineup includes imaging products (e.g.
transparent conductive films for touch panels, rear projection screen films, and resist materials for electronic circuitboards), as well as specialty materials such as rewritable media and products using nonwoven fabric technology (e.g.
high function filters, water treatment membrane base substrates, and battery separators).
Although it is difficult to predict the future for the Mitsubishi Paper Mills Group's business environment due to things
such as demand trends and crude oil price fluctuation, we began carrying out the Second Mid-Term Management Plan in
April 2016 with the goal of building a solid business foundation that will remain unaffected by changes in the external
environment. As a further measure, we have also decided to expand our capital and business partnership with Oji
Holdings Corporation. Through further opportunities to work with the Oji Group, the Mitsubishi Paper Mills Group will
accelerate growth as it works to fulfill its corporate philosophy and contribute to society. We hope for your continued
support and encouragement in the future.

The Mitsubishi Paper Mills Group views the goal of its CSR activities to be improving corporate value and working tosolve social problems through gaining the trust and empathy of its stakeholders. When tackling the many issues we have
faced, we conducted distinctive CSR activities that leverage the managerial resources of the Mitsubishi Paper Mills Groupand the strengths of our lines of business. Recent years have seen a worldwide increase in companies leveraging the
Sustainable Development Goals (SDGs) in their business. However, we were one of the first to produce and sell
FSC®-certified paper, which contributes to achieving the SDGs, and we continue working to make society moresustainable through our businesses.
In fiscal 2018, we worked on "ensuring product quality" and "enhancing activities to ensure safety and health" as our
top priority issues, and also put effort into achieving the SDGs by expanding our lineup of environmentally conscious
products, which includes FSC-certified paper, water treatment membrane base substrates, and the Thermal DigiPlate
System.
In fiscal 2019, considering the Mitsubishi Paper Mills Group's business environment and conditions, we have put forth
the following three things as top priority issues: "enhancing activities to ensure safety and health," "customer-centeredproduct development," and "promoting various measures to improve human resource performance." In the days ahead,
we will closely communicate with our stakeholders on carrying out CSR activities that enhance corporate value to fulfill
our responsibility to society, and keep working to realize a sustainable society.

FSC® C021528
3

4

History of the Mitsubishi Paper Mills Group
April 1898

Founding of the company■ Head Office & Branches

Hisaya Iwasaki took over a paper milloperated by the Walsh Brothers in
Sannomiya, Kobe, and established Kobe
Paper Mill Company
June 1901

Moved the mill (currently Takasago Mill) to
Takasago City in Hyogo Prefecture

June 1904

The Takasago Mill soon after the Company’s founding

Changed the company's name to Mitsubishi Paper Mills Company

February 1917

Constructed the Nakagawa Mill in Katsushika-ku, Tokyo

November 1917

Incorporated and changed name to Mitsubishi Paper Mills, Ltd.

December 1925

Moved head office from Takasago, Hyogo to Chiyoda-ku, Tokyo

April 1944
August 1946
May 1949
November 1950

Listed in the First Section of the Tokyo Stock Exchange and Osaka Securities Exchange
Acquired all stock of a manufacturer and seller of non-wood pulp (currently Toho Tokushu

Merged with Shirakawa Pulp Industry Ltd. and acquired the Shirakawa Mill (currently
Shirakawa Site) and the Kitakami Mill (currently Kitakami HiTec Paper Corporation)
Ryosan Shokai (founded 1912) merged with CASIWA Co., Ltd. to form Mitsubishi Paper
Sales Co., Ltd.
Established trading subsidiary Mitsubishi Paper International Inc. in New York

February 1992

Established Diamic Co., Ltd.

January 1999

Acquired all stock of the Germany-based paper production company Stora Carbonless
Paper GmbH (renamed Mitsubishi HiTec Paper Bielefeld GmbH in June 1999) and Stora
Special Paper GmbH (renamed Mitsubishi HiTec Paper Flensburg GmbH in June 1999)
Established Mitsubishi Paper Holding (Europe) GmbH in Düsseldorf, Germany as amanagement company for affiliate companies in Europe

April 2005
November 2007
April 2008

Closed Nakagawa Mill
Split off the Kitakami Mill's business and established Kitakami HiTec Paper Corporation
Established Zhuhai MPM Filter, Ltd. (Zhuhai City, Guangdong Province), began filter

Process Development Laboratory

46, Wadai, Tsukuba-shi, Ibaraki

3, Aza Maeyamanishi, Nishigo-mura, Nishi
Shirakawa-gun, Fukushima

Kyoto R&D Laboratory

Takasago Mill

Kitakami HiTec Paper Corp.

105 Sakaemachi, Takasagocho, Takasago-shi, Hyogo
Principal products: Carbonless paper, thermal
paper, inkjet paper, nonwoven fabric,specialty paper

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

Kyoto MillKJ SPECIALTY PAPER Co., Ltd.

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

7-1 Shimbashicho, Fuji-shi, Shizuoka
Principal products: Functional paper (decorative
laminate base paper, impregnated decorative
sheets, base paper for wallpaper, masking tapebacking, etc.)

Hachinohe MillAza Aomoriyachi, O-aza Kawaragi, Hachinohe-shi,
Aomori
Principal products: Printing paper, white
paperboard, copier paper
Shirakawa Site
3, Aza Maeyamanishi, Nishigo-mura, Nishi
Shirakawa-gun, Fukushima
Principal products: Pressboard

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

Acquired all stock of Tomoegawa Paper America LLC (renamed MP Juarez LLC in July

Mitsubishi HiTec Paper Europe GmbH Bielefeld Mill

Zhuhai MPM Filter, Ltd.

Niedernholz 23, D-33699 Bielefeld, Germany
Principal products: Carbonless paper, thermal
paper, inkjet paper

17 Yijing Lane Pingsha Town J, Inwan District,Zhuhai, Guangdong, China
Principal products: Various filters

Mitsubishi HiTec Paper Europe GmbH Flensburg MillMP Juarez LLC

Husumer Strasse 12 D -24941 Flensburg, Germany
Principal products: Thermal paper, inkjet paper

Ave. Valle del Cedro #1551 Paraq. Ind.
Intermex C.P. 32690 Cd. Juarez, Chih., Mexico
Principal products: Inkjet paper

Merged Mitsubishi HiTec Paper Bielefeld GmbH and Mitsubishi HiTec Paper Flensburg
Acquired all stock of KJ SPECIALTY PAPER Co., Ltd. from KOHJIN Film & Chemicals
Co., Ltd.

5

Speciality Materials R&D Laboratory■ Overseas Production Facilities

GmbH, establishing Mitsubishi HiTec Paper Europe GmbH
October 2011

■ Domestic R&D Facilities

product processing business in China
2008), an inkjet paper finishing company based in Mexico
October 2010

1-1, Fushimimachi 2-chome, Chuo-ku, Osaka-shi,
Osaka(Sumitomo Mitsui Bank Koraibashi Building)■ Domestic Production Facilities

Association of Mitsubishi Paper Mills labor unions organized

April 1966

March 2003

2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026,
Japan (Ryogoku City Core)(currently Kyoto Mill), to produce photographic paper

Constructed the Hachinohe Mill in Hachinohe City, Aomori

May 2002

Osaka Sales Branch

1-6-6, kaiden , Nagaokakyu-shi, Kyouto

April 1966

April 1985

Head OfficeMerged with Kyoto Photographic Industry Company, Ltd. and made it the Kyoto Trial Mill

Pulp Co., Ltd)

April 1972

Main Offices and Mills

July 2012

Moved the head office to Sumida-ku, Tokyo

April 2014

Established MPM Operation Co., Ltd., a spin-off from the Hachinohe Mill

6

Management Measures
The Second Mid-Term Management Plan

■ Improving our profit baseIn order to deal with a business environment that is expected to become increasingly more severe in coming years, weformulated the Second Mid-Term Management Plan (April 2016 to March 2019) with its emphasis on "stabilization of
profit through alliances."
In fiscal 2018, the second year of our Second Mid-Term Management Plan, we entered into a capital partnership with
the Oji Group to make our alliance even more comprehensive and constructive. This move was prompted by therecognition that it is essential for sustainable growth of our company to not only engage in one-off partnerships in certain
businesses, but also strengthen partnerships across multiple businesses. In this partnership our independence andrelationships with current customers and suppliers will be respected, while at the same time accelerating and advancing
mutually beneficial relationships as long-term partners, achieving sound and sustainable growth, and maximizing
long-term corporate value.

Basic Policy Behind the Plan, and Efforts Being Made・Achieve a stable earnings structure not affected by the external environment throughstructural reform and strengthening our alliance with Oji Group.
・Optimize our distribution and logistics systems.

Improvingprofit
proﬁtbasebase
2 Improving
・ Strengthen our alliance with Fujifilm Corporation to build an efficient production
structure.
・ Improve the profit base business by effectively using the business superiority andpositioning 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.

Strengthening the business foundation and financial
4 ground that will support the Group’s earning power
・Work on the reconstruction of business processes and IT infrastructure to reform theGroup’ 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

1 Structural reform of the printing paper business■ Reform the printing paper business structure
To maintain good capacity utilization and to stabilize sales volume fluctuation at our Hachinohe Mill, we are
expanding sales of communication paper as a part of our alliance with the Oji Group, and are also working to increase
printing paper exports and strengthen pulp sales. Additionally, we are working to improve efficiencies in the supply
chain — that is, streamlining our distribution and logistics systems, from production sites to sales outlets — with an eye
to establishing a stable earnings structure. For our business in Germany, we have decided to begin thinking about the
restructuring of our German subsidiaries together with the Oji Group.

7

In the Imaging Media Business, along with strengthening our business foundation through our alliance with Fujifilm
Corporation for photographic base paper, we are working to improve sales of existing products that are at a maturing
stage through aggressive development in overseas markets.
The Speciality Materials Business is focused on expanding sales in the U.S., Europe and Asian countries,
particularly China, and making steady progress in the filters business, the nonwoven fabric business of water
treatment membrane base substrates etc., the rewritable media business, and the decorative laminate base paper
and masking tape backing businesses.

■ Developing new businesses
As a means to establish further new business for the Group, we are expanding business in growth areas such asfunctional films based on imaging technologies, digital image transfer inkjet paper for textile printing, and battery
separators with superior quality. One particular area of focus is functional films, for which we have begun building a
new production facility at the Kyoto Mill. Business operations are scheduled to start in January 2019.
In addition, to achieve a more robust profit base for the Hachinohe Mill, we are expanding the scope of ourbusiness partnership with the Oji Group to include efforts such as the launch of a joint household paper business(with operations scheduled to begin in April 2019) and a joint biomass energy business (with operations scheduled to
begin in July 2019).

■ Strengthening the business foundation and financial base thatwill support the Group’ s earning power
With the goal of reconstructing our business processes and IT infrastructure, we are taking steps to develop abusiness foundation that can flexibly accommodate our corporate strategies. With regard to strengthening ourfinancial base, the end of period interest-bearing debt and debt/equity ratio targets in the Second Mid-Term
Management Plan have already been reached, ahead of plan.

Plan Targets and Results
Results for the second year of the Second Mid-Term Management Plan deviated significantly from planned targets
due to a worsening of business conditions, which included an inability to raise printing paper prices and an increasein raw materials and energy costs. We are making a number of efforts in new businesses, but developing them willtake time. And, as a further measure to achieve results despite increasingly difficult business conditions, we haveconcluded a capital partnership with Oji Holdings.
(Unit: 100 million yen)

Year one of the Second
Mid-Term Management Plan

Year two of the Second
Mid-Term Management PlanFY 2017

FY 2018

FY 2016
ActualPlan

ActualPlan

Actual

2,163

2,200

2,020

2,250

2,015

Operating Income

39

45

43

55

18

Ordinary Income

22

25

27

35

7

Interest-Bearing Debt

1,388

1,350

1,257

1,300

1,193

D/E Ratio

2.8x

2.7x

2.3x

2.5x

2.0x

Equity Ratio

20.4%

21.2%

23.1%

21.8%

25.2%

Sales

8

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

Fiscal Year
Profit and Loss (millions of yen):

2014

2015

2016

2017

2018

214,944

216,340

201,955

201,492

Operating Income

473

1,038

3,872

4,313

1,790

Ordinary Income

62

135

2,216

2,703

652

Profit Attributable to Owners of Parent

280△4,272

2,217

1,152

3,198

6,322

4,369

4,798

5,995

7,438

Capital Investment

300,000

12,222

3,907

12,626

19,83912,809Cash Flows from Investing Activities△433△1,168△2,145△7,070△5,994

Total Assets

2,586

2,535

2,412

2,359

2,374

Outstanding Interest-bearing Debt

1,490

1,448

1,388

1,257

1,193

528

520

492

544

597

Equity Capital

Per Share Information*1 (Yen):
Earnings per Share (EPS)

Book-Value Per Share (BPS)

201,955

200,000

201,492

3,500
3,000

150,000

2,500

1,500

0

2014

2015

2016

Outstanding Interest-bearing debt and D/E ratio

2,000

2.8

2.8

1,490

1,448

●

1,800
1,600

D/E ratio
3.0
2.8

●

●

1,388

△124.96

64.85

33.72

93.57

1,543.13

1,521.56

1,440.45

1,591.00

1,747.54

1,200

1,257

2014

Equity Capital（100millions of yen）
600

2.8

580

2.6

560

1,193

2.4

2.3
●

2017

2018
（FY）

Equity Capital & ROE●

597

ROE（%）
7.0

●

5.6

2.2

1.0

0.5

2.0

2.2

520

2.0

500

1.8

480

-1.0

544

-3.0

520

-5.0

492

-7.0

400

1.8

2.1

0.9

Overseas Sales Ratio (%)

29

31

31

30

32

Equity Ratio (%)

20.4

20.5

20.4

23.1

25.2

Return on Equity (ROE) (%)※2

0.5

△8.2

4.4

2.2

5.6

Employment Rate of People with Disabilities

Debt-Equity Ratio (D/E ratio)※3

2.8

2.8

2.8

2.3

2.0

11,687

11,993

14,534

14,767

12,264

(％)
3

200

2014

3,982

3,622

3,697

3,734

3,723

Employment Rate of People with Disabilities (%)

2.16

2.45

2.32

2.17

2.29

Industrial Property Rights

1,530

1,420

1,607

1,639

1,655

CO2Emissions (1,000 tons)

946

947

959

957

960

1.051

1.057

1.039

1.038

1.017

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 2014.
※2 Return on equity (ROE) = Profit attributable to owners of parent / (net assets - non-controlling interest)※3 Debt-equity ratio = Interest-bearing debt / equity capital※4 Employees denotes full-time employees and does not include temporary workers

2016

2017

Outstanding Interest-bearing debt

2.45

2.5

Employees※4

2015

●

2.17

2014

●

●

-8.2

2015

2016

Equity Capital

●

2018
（FY）

ROE

-9.0

CO2Emissions and Emissinon Intensity

Emission Intensity（tons/product tons）
1.08

1.057
959

●

946

●

1.06

●

1.051
960

947

●

940
1.5

2017

Emissions（1,000 tons）
1,000● 2.29

●
●

●

980

2.16
●
●

2018
（FY）
D/E ratio

2.32

●

2

●

5.0
3.0

●

540

1,000
●

2016

4.4

528

800

2015

●

0.5

CO2Emission Intensity (tons / product tons)

473

0

2018
（FY）

Outstanding Interest-bearing debt
（100millions of yen）
2,200

1,400

8.21

2017

0.2

Non-financial data:

1,038

1,000

Operating Income Margin (%)

EBITDA (millions of yen)

1,790

2,000
100,000

600

Management Indicators:

3,872

4,000

216,340

214,944

207,470

500

Cash Flows from Operating Activities

Financial Position (millions of yen):

4,313

4,500

50,000Cash Flows (millions of yen):

Operating Income

5,000

250,000

207,470

Net Sales（millions of yen）

Sales

（millions of yen）

960

957

1.039

●

1.04

1.038

●

920

1.017

1.02

※1

9

1

2014
●

2015

2016

Mitsubishi Paper Mills

2017
●

2018
（FY）

Statutory Employment Rate

900

2014

2015

2016

Emissions

●

2017

2018
（FY）
Emission Intensity

1.00

10

Special Feature 1 : Efforts of the Mitsubishi Paper
As a company that has been actively contributing to the conservation of the global environment and creating a
recycling society, the Mitsubishi Paper Mills Group practices the responsible use of forest resources through FSC ®
forest certification and provides environmentally-conscious products as part of its efforts to create a sustainable society.
Here we will introduce our contributions to the SDGs and our company’s efforts through FSC forest certification.

Sustainable Development Goals (SDGs)

The SDGs were adopted at the United Nations Sustainable
Development Summit in September 2015. These 17 goals
were mentioned as ones to work with to resolve economic,
social, and environmental problems between 2016 and 2030
to achieve a sustainable society marked by diversity andinclusiveness, where "no one is left behind," whether indeveloping or developed nations. The SDGs are goals
assigned to each country's government, with much of the work
expected to be done by private enterprise. Accordingly, in
November 2017, the Japan Business Federation revised its
Charter of Corporate Behavior based on the SDGs.

Achieve gender equality and empower
all women and girls

Promote gender equality

Goal 6

Ensure availability and sustainable management ofwater and sanitation for all

Indirectly contribute through proper
forest management(FSC 10 Principles)

Goal 8Promote inclusive and sustainable economic growth,
full and productive employment, and decent work
for allSupport proper employment
and fair wages

Goal 12

Ensure sustainable consumption and production
patterns

Maintain resources and provide
sustainable product

Goal 15

Protect, restore and promote sustainable use of terrestrial
ecosystems, sustainably manage forests, combat
desertification, and halt and reverse land degradation andhalt biodiversity loss

“Intended direction of FSC
forest certification”

effective, accountable, and inclusive institutions at all levels

Goal 17
11

FSC contribution

Goal 5

Promote peaceful and inclusive societies for sustainable

Strengthen the means of implementation and revitalize
the global partnership for sustainable development

Responsible Papermaking through the FSC Forest Certification
In order to make paper in a sustainablefashion, the Mitsubishi Paper Mills Group
has acquired FSC forest certification (chainof custody certification), the first paper
company in Japan to do so, for all of its
paper production sites 17 years ago in
2001. We are working on creating asustainable society by procuring wood andmaking paper while paying consideration toenvironmental, social, and economic
aspects.

Hachinohe Mill（SCS-COC-000328）
Kitakami Hitec Paper Corp.
（SCS-COC-000328）
Shirakawa Site
（SCS-COC-000328）
Kyoto Mill（SCS-COC-000328）
Takasago Mill（SCS-COC-000328）⇨ Reference URL: FSC Certified Paper
https://www.mpm.co.jp/eng/env/fsc.html

The SDGs consist of 17 goals and 169 targets. The FSC forest certification contributes to 11 of these goals and 35 of
the targets. Its main contributions are described below. FSC makes a direct contribution to Goal 15, and is an indicatorof the degree to which the goal has been achieved.

Goal 16 development, provide access to justice for all and build

Efforts of the Mitsubishi Paper Mills Group

Company-owned forest(Shichinohe
district, AomoriPrefecture)（SA-FM/COC-002322）
Shin-Hokuryo Forest Products
Co., Ltd.
（SA-COC-001501）
Company-own forest(Iwaizumi Town Group certified)（SA-FM/COC-001289）
Company-owned forest (Sirakawa
district, Hukusima Prefecture)（SA-FM/COC-002322）
Mitsubishi Paper Mills Head Office（SCS-COC-000328）
Mitsubishi Paper Sales Co., Ltd.
（SCS-COC-000424）

FSC® Certification to Help Achieve the SDGs

Sustainable Development Goals

Mills Group to Build a More Sustainable Society

KJ SPECIALTY PAPER Co., Ltd.
（SGSHK-COC-006878）

Diamic Co., Ltd.
（SGSHK-COC-002678）

Participation in the FSC's Vancouver Declaration

At the October 2017 FSC General Assembly, FSC launched the "Vancouver Declaration for the UN SDGs and
FSC Certification." A new initiative aimed at promoting the use of forest resources produced through responsible
forest management, the declaration is a joint statement issued by enterprises who use wood and have made a publicpledge to practice responsible wood procurement. There are 57 companies in Japan and other countries that havesigned the joint statement, including Mitsubishi Paper Mills.

Awareness Raising Initiatives■ Exhibition at Eco-Products 2017

■ Sponsorship of the SDGs for School

Eco-Products 2017 was held at Tokyo Big Sight inDecember 2017. At the event, Mitsubishi Paper Mills
held a joint exhibition with Mitsubishi Paper Sales,
administrator of the FSC Support Project, one of ourenvironment projects. Through this we explained how
the FSC forest certification contributes to the SDGs andabout the distinctive efforts the Mitsubishi Paper Mills
Group is making using the FSC certification.

NPO Think the Earth, which sees schools as
having responsibility for educating the people who willbring about a more sustainable society, conducts the
SDGs for School project. The project provides juniorhigh schools and high schools with books free ofcharge that allow students to learn about SDGs in aneasy and fun way. Mitsubishi Paper Mills sponsors
the project in solidarity with the goal of raisingawareness of the SDGs for junior high and highschool students, the caretakers of tomorrow.

Comply with related laws

Support feasible forest
management

FSC® C021528

12

Special Feature 2 : Launching a Household Paper

Business at the Hachinohe Mill
About MPM Oji Home Products Co., Ltd.

Mitsubishi Paper Mills is currently
implementing printing paper business reforms as
part of its Second Mid-Term Management Plan.
The goal of these efforts is to strengthen thebusiness structure of the Hachinohe Mill, ourmain plant, and build a stable earnings structure.
As one of the efforts toward this goal, we havelaunched a joint business with Oji Nepia Co.,
Ltd., a subsidiary of Oji Holdings Corporation, at
our Hachinohe Mill in the household paper
business, where market growth is expected.
Through this joint business we will work tostrengthen the profit base of the Hachinohe site.

Plans call for MPM Oji Home Products Co., Ltd. to produce toilet paper, tissue paper, and similar products for
Mitsubishi Paper Mills and Oji Nepia. With the goal of conducting household paper business that is competitive andenvironmentally conscious, the company will fully leverage the area's geographical advantages as an oceanfront mill aswell as the mill's existing utility and FSC® certified pulp production capabilities. MPM Oji Home Products' production
operations are also expected to create further jobs in the region and stimulate the local economy.

Image of the completed site

Aerial view of the Hachinohe Mill, and household paper production
facility construction site (area within the yellow lines)

Overview of the Household Paper Business
Having Oji Nepia Co., Ltd. relocate their production equipment to be used as the facility’s main production equipment
and leveraging both the favorable geographical advantages of the Hachinohe Mill and existing infrastructure will allow
us to establish cost-competitive production. Plans call for establishing the Tohoku region as the main sales region so as
to reduce logistics costs.

Mitsubishi Paper Mills
・Mill with excellent oceanfront location
・Use existing infrastructure

・Supply pulp, energy, and utility

Strengthen
the profit base of
the Hachinohe site
Start of operations

Oji Nepia

Scheduled for April 2019

■ Production Facility overview
Land area: 24,403 m²
Floor area: 12,455 m²
Production equipment: Papermaking machines, converting and finishing equipment, etc.
Products: Toilet paper rolls, tissue paper
Production capacity: 18,000 tons/year

Business Progress
MPM Oji Home Products was launched in June 2017 as a joint venture for household paper business, and a site
agreement was signed in September by Aomori Prefecture and the city of Hachinohe. A groundbreaking ceremony washeld in February 2018. Construction is now under way, aiming to begin operations in April 2019.

・Relocate production equipment

Joint Venture Profile● Company: MPM Oji Home Products Co., Ltd.
(Mitsubishi Paper Mills’ stake: 70%, Oji Nepia’s stake: 30%)

● Location: In the site of Mitsubishi Paper Mills' Hachinohe Mill

Groundbreaking ceremony (February 9, 2018)

Construction status (as of June 25, 2018)● Capital stock: ¥80 million● Investment amount: ¥5 billion
13

FSC® C021528
14

Overview of Business Segments
Products

Printing Paper BusinessBusiness Results
In the domestic market, sales of communication paper
remained strong owing to the effects of alliances and otherfactors. However, printing paper saw a further decline indemand that resulted in lower sales volume overall in thedomestic market.
Exports of printing paper increased, but was not sufficient
to offset the domestic downturn. This resulted in an overall
decline in sales volume, with sales revenue also decreasing
due to limited effectiveness of efforts taken this fiscal period
to revise prices. Meanwhile, for our German subsidiary, bothsales and sales volume increased as demand for themainstay products, thermal paper in particular, was steady.
This brought sales for all paper and pulp businesses to¥152,220 million, a 1.2% year-over-year increase.

■ Printing paper

Paper and pulp business sales（100 million yen）

■ Communication paper

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

1,617

1,654

1,643

1,600

1,504

1,522

1,500
1,400
1,300
1,200
1,100
1,000

2014

2015

2016

2017

2018
（FY）

Business Strategies

Used in publications such as brochures and books,
and for packaging.

■ Pressboard

Products including copier paper, slips, and receipts.

■ Sanitary paper

To sustainably enhance the corporate value of Mitsubishi Paper Mills Group, it will be essential to bolster thecompetitiveness of the printing paper business, which accounts for nearly 70% of the Group's sales. This is in line withthe business unit strategy from the Second Mid-Term Management Plan, which aims to build a stable earnings structurethat is not affected by the external environment.
In order to consistently keep the utilization rate high at the Hachinohe Mill, our main plant, we are strategically
expanding our OEM business while ramping up paper exports and external sales of pulp. We are also working to
improve supply chain efficiency by integrating manufacturing and sales operations through efforts to re-examine our rolewith distributors and reduce inventory by optimizing distribution and logistics systems. Meanwhile, we are working toboost the profitability of our German business through means such as implementing price-focused sales policies,
reducing costs, and rolling out new products. We are also working to build a stable earnings structure in Japan andelsewhere through efforts that include starting a household paper joint business with Oji Nepia Co., Ltd.

Business Topics
Expanding and Improving Our Lineup of Mitsubishi Diabulky Products,
Well-suited to Picture Books, Coloring Books, Catalogs, and More

Used as insulating material around transformers,
among other things.

■ Docodemo Paper / TouchCard

Our high quality sanitary paper is highly acclaimed
in the market.

■ Reglobe(recycled construction material)

We developed Diabulky as a product perfectly suited to products suchas picture books, coloring books, and catalogs — products for which
paper provides something digital media cannot achieve. Featuring aunique, high-class texture coupled with superior color reproduction whenprinting and just the right feel for writing, Diabulky enjoys a strong
reputation with many users. We have now added two new additional
weights (shiroku ban 88 kg and shiroku ban 101kg). We will continue todevelop products that satisfy users' needs.

A new business that aims to cultivate demand througha fusion of paper and electronic media.

15

Used as roadbed materials, backfill, weed control,and other products.

16

Overview of Business Segments
Imaging Media BusinessBusiness Results

Domestic sales revenue dropped owing to a drop in
demand for photosensitive materials and printing platematerials.
In overseas markets, orders for photosensitive material
were stable due to the effects of business alliances, andinkjet paper business grew mainly in emerging nations.
However, sales revenue declined as a result of decreased
demand for existing products.
This resulted in total sales for the Imaging Media Businessof ¥36,907 million, a 5.1% decrease year-over-year.

（100 million yen）

600
500

416

435

389

369

■ Inkjet Paper Products●CTP (Computer to Plate) printing plate systems●Inkjet paper for fine art

・Thermal DigiPlates (TDP)・Violet DigiPlates (VDP)●CTP printing plates fornewspaper printing

300

・PD-NEWS● Analog printing plate systems

200

・Silver masters (SLM)●Digital screen mask make systems

100●Inkjet proofing paper (for proofing)・MDS-360
2014

2015

2016

2017

2018
（FY）

The Imaging Media Business operates based on three strategies: ①strengthening alliances, ②expanding andimproving the lineup of existing products, and ③fostering new businesses.
①The first strategy, strengthening alliances, is to expand the production and supply volume of resin coated base paper
for photographic applications through further strengthening collaboration with industry partners, thus fortifying the profit
base, and strengthening competitiveness.
②The second strategy, 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. For inkjet paper, this means focusing on business applications, which areprimed for growth, and moving into the B to B market with primarily inkjet labels and cards. For print-related products, thismeans expanding business in the flexo and screen printing market and post-print processing field.
③The third strategy, fostering new businesses, will see us develop and sell new products that include functional films
such as transparent conductive films for touch panels and photosensitive resists for electronic materials, as well as
products for electronics-related fields and the medical/healthcare fields. We are also building a new coater for the Kyoto
Mill, which will drive greater profitability in new businesses. In addition, we will supply digital textile inkjet printing transfer
paper not only for sublimation transfer printing on polyester but also thermal transfer printing on cotton, silk, and othernatural fabrics. We are working to cultivate new customers in the textiles industry primarily in overseas markets.

Business Topics
事業トピックス
About Diamic's Print Support Center
The "b-side" print support center, which Diamic Co., Ltd. runs at its Osakabranch, is a showroom for printers that includes a garment printer for
printing on clothing and silkscreen printing
equipment that can print on a variety ofmaterials, embroidery machine, and printers
for water bottles. This showroom allows
customers considering a purchase to try out the equipment. The center also
does original printing, taking even single unit orders for products such as T-shirts,
tote bags, towels, and water bottles.

17■ Products for Printing
・Silver DigiPlates (SDP)

418

400

0

Business Strategies

Products

Imaging Media Business Sales● Software

・DIALIBRE Series■ Products for photography■ Resin Coated Base Paper Products

・Mitsubishi Grace Color Paper MG-1000●Resin coated base paper

・Color paper processing chemicals

・For photography

・For inkjet printing
・For sublimation

thermal transfer
printing● Specialty paper

・Processing basepaper

(casting paper)
Products made from photographic base paper

Mitsubishi Color Casual Photo Contest,
a summer tradition■ New businesses●Electronic materials

・Transparent conductive films for touch panels
・Silver nanoparticle ink
・Photosensitive resists

・Sensitizing dyes for solar cells● Rear projection screen films

・SaiVisTransparent conductive films for
touch panels

Silver nanoparticle ink

Photosensitive resists

Digital textile inkjet printing
transfer paper●Covers that warm, moisturize, and provide
restful sleep

・My Dome● Digital textile inkjet printing transfer paper

18Overview of Business Segments
Speciality Materials BusinessBusiness Results
In speciality materials, sales of filters and rewritable media wereon par with the previous year, while sales of water treatment
membrane base substrates, battery separators, and nonwoven
fabric for electrical discharge machining filters increased. Sales
revenue was also up.
Sales revenue was down for KJ SPECIALTY PAPER, which saw
sales rise for decorative laminate base paper, masking tapebacking, and other products, but fall for inorganic fiber papers.
As a result, total sales for the Speciality Materials Businessincreased 0.4% year-over-year to ¥17,026 million.

Speciality Materials Business Sales（100 million yen）
250

Products■ Backing material for EM shielding sheets■ Battery separators
Heat resistance testing for separators

200

160

168

169

170

170

2015

2016

2017

2018
（FY）

After 5 seconds at 400°
C

150

100

50

0

2014

Business Strategies

For the Speciality Materials Business Unit, our business unit strategy for the Second Mid-Term Management Plan will
involve, among other things, expanding nonwoven fabric business, which includes water treatment membrane basesubstrates and battery separators, along with increasing sales in Eastern Asia with a focus on China, Korea, and ASEAN
nations for filters and rewritable media products.
Mitsubishi Paper Mills' nonwoven fabric business began with the production of glass sheets for flooring and filtering media
for electrical discharge machining. Then in 2012, the deployment of new nonwoven fabric production equipment at the
Takasago Mill allowed us to add reverse osmosis membranes and other water treatment membrane base substrates andrechargeable battery separators to the lineup. We have steadily grown our water treatment membrane base substratecustomers, mainly in China and Europe. In the rechargeable battery separator segment as well, ultra heat-resistant lithium-ion
battery separators, which we announced at the end of 2016, have attracted the attention of battery manufacturers in Japanand overseas for their improved safety and its sales have grown together with separators for both capacitors and condensers.
We are also currently considering business prospects involving rechargeable battery separators for electric vehicles in China
and are taking steps that include possibly expanding facilities for manufacturing nonwoven fabrics.
For our filter business, while we currently develop and manufacture air filters mostly for air purifiers and automotive air
conditioning systems, the increasingly severe problem of air pollution in China, where our plant is located, is prompting
increased demand for functional filters and total heat exchanger elements used in power-saving ventilation fans. We are
currently planning efforts to develop products that target domestic demand in China in order to achieve further growth.
In the KJ SPECIALTY PAPER segment, our washi-like tape base paper has been well received in Japan, the U.S., andEurope for its superior stretchability and cuttability, and its sales have grown for use as a base substrate for masking tape anddecorative tape.
Our Speciality Materials Division is working on a number of new development projects that are very highly regarded in theirrespective fields, with the goal of bringing products to market and achieving growth.

These thin nonwoven fabric sheets are used in EMshielding materials.

■ Thermal rewrite cards

Nonwoven fabric separators with high heat resistance help
ensure improved battery safety.

■ Tape backing material
Masking tape

Decorative tape
Card points, expiration dates, and other information
can be rewritten.

■ Total heat exchanger elements

A washi-like high performance tape backing material.

■ Carbon nano-tubes (CNT)

Business Topics
RO Membrane Base Substrates

Reverse osmosis (RO) membranes are separation membranes usedin seawater desalination and water purifiers and work by letting water
through but preventing the passage of ions and bacteria. Mitsubishi
Paper Mills manufactures and sells nonwoven fabric base substrates
used in RO membrane fabrication, contributing to the supply of cleanwater. In addition to base substrates for membranes, we will continue toexplore a range of possibilities for business success in the water
treatment market, an area of good growth potential.

19

Water treatment elements

Used in energy-saving devices that collect heat andair moisture.

Ultrathin, high-temperature CNT membrane heaters thatfeature good temperature response.

20

Research and Development
In line with our motto, ”Mitsubishi Paper Mills for High Grade and Information Media", Mitsubishi Paper Mills develops andmanufactures products in a wide variety of fields that include imaging-related materials and speciality materials, in addition to
printing and communication paper. Along with researching paper and peripheral basic technologies, we are combining thepaper technologies we have developed over the years with silver halide photosensitive material technologies developed in our
photo and printing fields to develop advanced products for our digital society. We are also developing printing equipment andsystems as well as new speciality materials (in the electronic materials and amenities fields) based on the technicalcapabilities honed through our development of photosensitive materials, special materials, and other materials.
Research and Development Expenses（million yen）
1,150

FY 2018 R&D Expense Allocation

1,100

17%

1,050

■ Imaging Media Business

1,000

54%

29%

950

■ Speciality Materials Business■ Paper and Pulp Business

Process Development Laboratory
While paper and speciality material production technologies
and printing technologies become more sophisticated day byday, customers' quality demands are also changing. To
quickly provide end products and pipeline products that will
satisfy customers, we operate test plants with papermaking
machines, coaters, calendaring machines, and otherequipment. We also use plate-making and printing machines
to create prototype products with technology on par withcurrent market products, and to evaluate product qualities.
Furthermore, we create product samples to show thefeatures and characteristics of our products. At the sametime, we leverage the expertise of Laboratory personnel todevelop production technologies and new applications for
products, in addition to surveying cutting-edge manufacturing
technologies.

One-shot goniophotometer (prototype)

900
850

2014

2015

2016

2017

2018
（FY）

Laboratories for product and technology development
Speciality Materials R&D Laboratory
Product performance is continually evolving in the field of water
treatment membranes and lithium batteries. To contribute, we use ourbasic technologies, such as papermaking and coating to improve anddevelop battery separators and base substrates for water treatment
membranes. We are also developing next-generation products that
include cellulose and synthetic resin composites, micro-fibrillated
cellulose, and carbon fiber sheets. As part of our basic research activities
for these products, we also conduct joint research with universities andother companies.
To develop new products and improve the quality of existing products,
we need advanced analysis technologies. Our analysis group is therefore
working hard examining and developing new analysis technologies.

y

it
av

C

it

Sl

Coating flow analysis business
Analysis through magnification of
coating bead free surface, whichforms a bridge as it flows out theslit in the coater head toward thebase substrate
3D distortion of the portion
that pools in the lip

Coating bead flow analysis for slots with microfiber linkage

MPM CAE Center Co., Ltd. (established in April 2011)
conducts contracted research and provides consulting
services using numerical analysis techniques. It provides
services that meet users' needs through the use of coupledanalysis techniques and high speed analysis systems.
With its high level of technical expertise, the company has
long been engaged in scientifically analyzing coatings, which
are applied to base substrates, and has created numericalanalysis (computer simulation) technology for optimizingthem. In recent years we have also begun basic research
focused on the behavior of not only liquids but also solid
particles and microfibers contained in coatings.

Pyrolysis gas chromatograph mass spectrometerIntellectual Property

Kyoto R&D Laboratory
In the electronics field, we are building on the base of silver halide photography
technologies and inkjet media-related technologies Mitsubishi Paper Mills hasdeveloped over the years to develop and commercialize a range of products. These
include resist films with unique properties, insulation material processing technologies
that involve wet processing, sensor film for touch panels, and silver nano particle ink.
And in the printing field, we have developed and launched the Screen Meister
MDS-360, a heat-sensitive digital screen-making machine that can print screen plateswith only data supplied from a PC, without the need for block copy films, emulsion
coating, image development, or drying processes.

21

g t
in
at inleCo lorcoResist patterns forhigh-resolution dry films

Screen Meister MDS-360

Intellectual property is an important asset in developing
our business and boosting our competitiveness. Patents,
in particular, are what secure, maintain, and enhance thecompetitive strength of new products. Consequently, we
submit roughly 200 patent applications every year in Japanand abroad. Although we have traditionally submitted
mainly in Japan, the U.S., and Europe, we are now
submitting more applications to China, South Korea,
Taiwan, and other countries in Asia as part of an active
effort to expand business in overseas markets. We havealso been actively applying for and registering trademark
in order to improve customer confidence for new products.

（Rights）
1,700

Industrial property rights held

1,600

1,500

1,400

2014

2015

2016

2017

2018
（FY）

22

Mitsubishi Paper Mills Group CSR
The Way We See CSR

The purpose of CSR is to improve corporate value through gaining everyone’s trust and empathy, and address social
problems, so we view CSR fulfillment as an important management priority in our business activities. Guided by the Code of
Conduct of the Mitsubishi Paper Mills Group, Mitsubishi Paper Mills is making a number of efforts to make good on theprinciples of our corporate philosophy. These principles focus on making us into a "corporate group that lives up to the trust of
its customers in the world market," a "corporate group that is always on the leading edge of technology," and a "corporategroup that contributes to preserving the global environment and creating a recycling society."⇨ Reference site: Code of Conduct of the Mitsubishi Paper Mills Grouphttps://www.mpm.co.jp/eng/company/kensyou.html

Organizational Governance■ Process 1 Ascertain the circumstances surrounding the Mitsubishi Paper Mills Group

Stakeholders

・Communication with our customers

Customers■ Process 2 Establish key issues and top priority issues to satisfy the needs of society

Product Safety and Quality

・Holding explanatory meetings forinvestors

Human Rights and Labor

・Enhancement of internal
communications
・Dialogue with the local community

Suppliers
Shareholders
Employees
Government

・Issuing integrated reports, etc.

Local Communities

・Provision of information via theInternet

NGOs/NPOs

ISO 26000 Core Subjects and Mitsubishi Paper Mills Group Initiatives
ISO 26000 Core Subjects
Organizational Governance

Mitsubishi Paper Mills Group CSR

Human Rights

Compliance
Promoting Social Responsibility in the Value Chain
Responsible Raw Material Procurement
Relationship with Employees
Relationship with Communities

Labor Practices

Compliance
Relationship with Employees

Environment

Responsible Raw Material Procurement
Relationship with the Environment

Fair Operating Practices

ComplianceFair Operating Practices

Consumer issues

Information Disclosure
Fair Operating Practices
Relationship with the Environment
Relationship with Customers

Community involvement andPreserving Biodiversity

development

Relationship with Communities

We assigned priority to each issue based on how they impact our business and on feedback fromstakeholders. We then extracted key issues that address social needs and from among them established toppriority issues based on a comprehensive consideration of our business environment and progress made in
addressing key issues.

■ Process 3 Verify the appropriateness of the process
The CSR Committee, a cross-organizational body, verified the appropriateness of our process for determining
issues and established key issues and top priority issues through discussions held at meetings of the Board of
Directors.

Key Issues and Top Priority Issues in FY 2019

Mitsubishi Paper Mills Group Initiatives
Corporate Governance

23

Process for Defining Issues

Type of information relayed
・Sharing of environmental data with
suppliers and customers

Social Contribution

With the goal of contributing to making society more sustainable through its business activities, the Mitsubishi Paper
Mills Group has set forth the following issues toward satisfying the needs of society.

We conducted an analysis of the circumstances surrounding the Mitsubishi Paper Mills Group fromenvironmental, social, and governance viewpoints. We then identified issues according to ISO 26000 and otherguidelines, and assessed efforts that are being made with respect to these issues.

Compliance

Environment

Key Issues (Material Issues) Concerning CSR Activities

P23-24
P25-32
P27-28

ISO 26000 Core Subjects
Organizational GovernanceFair Operating Practices

P33

FY 2019 Key Issues (◎ are the top priority issues)
Ensuring the effectiveness of corporate governance
Establishing a risk management structure

Thoroughly familiarizing employees with our Corporate

Code of Conduct and the Compliance Conduct Standards

P33-34

Ensuring strict legal complianceP45-48

Expanding initiatives out to affiliated Group companies

Promoting communication with stakeholders

P41-42
P27-28
P41-42
P33-34
P35-40

Human Rights

Labor Practices
Environment◎ Enhancing activities to ensure safety and health◎ Promoting various measures to improve human resource
performance

Promoting activities to prevent global warming
Promoting activities to preserve biodiversity

P27-28

Improving and enlarging our environmentally conscious

P30-31

Reducing environmental risk and impact

P33-34
P33-34

product lineup

Consumer issues

P35-40
P43-44
P37

P45-48Community involvement and development

Ensuring product safety

Ensuring product quality◎ Customer-focused Product Development
Promoting community support activities
Promoting cultural contribution activities

Promoting activities of the Eco System Academy24Corporate Governance
Overview of Corporate Organizations

Mitsubishi Paper Mills has chosen to structure itself as a company with a board of corporate auditors and assigned
two independent outside directors, thereby creating a structure fulfilling the role required by the Board of Directors. We
also divide up the oversight and executive functions, adopting an executive officer system to limit the size of the Boardof Directors, speed up decision-making, and define responsibilities for business execution. Also, we established an
Audit & Supervisory Board which includes outside corporate auditors, and meetings are held both periodically and asneeded.
In addition, we have instituted a Nomination and Remuneration Committee that is chaired by an independent outside
director and that acts as an advisory body to the Board of Directors in the interest of maintaining objectivity andtransparency in matters concerning executive appointment and remuneration.

Corporate Governance Framework
General Meeting of Shareholders
Election and Dismissal

Audit

◀

Audit & Supervisory Board
1 Internal、3 Outside

Board of Directors◀
7Internal、2Outside ◀
◀

◀

Election, dismissal,and oversightPresident and C.E.O.

Auditing company

Cooperation◀

Nomination andRemuneration Committee◀

Executive functions
17 Executive Officers

CSR Promotion Structure

◀

Audit

Audit

◀

◀

Internal Audit Department◀

Cooperation

ReportAccounting Auditors ◀

◀

Cooperation

Audit
ReportElection and Dismissal

◀

◀

◀

Election and Dismissal

Business Divisions and Subsidiaries

Basic Policy on Corporate GovernanceWith the aim of bolstering our corporate governance, we have established the Mitsubishi Paper Mills Limited Basic
Policies on Corporate Governance. More information is available on the following site.
⇨ Reference site: Corporate Governancehttps://www.mpm.co.jp/eng/company/governance.html

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-takeover measures, 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, andother areas.

25

Board of Directors Effectiveness Assessments

The Board of Directors conducted a questionnaire for Directors and Corporate Auditors, to analyze and evaluate theeffectiveness of the Board of Directors as a whole. The results of the questionnaire were then discussed at the Board of
Directors. An outline of the questionnaire and results is provided below. In addition to sharing the current
understanding, the Board of Directors will identify and discuss issues to make future improvements and continually work
to improve its effectiveness.

（1）Date of Board of Directors Effectiveness Analysis and Evaluation in FY 2018
December 27, 2017 - January 10, 2018 Questionnaire conducted
January 31, 2018
Discussions held at Board of Directors meeting（2）Questionnaire Topics
a.Composition of the Board of Directors
c.Functions of the Board of Directors

b.Operation of the Board of Directors
d.Other proposals for improvements（3）Analysis and Evaluation of FY 2018 Board of Directors Effectiveness— Summary of Resultsa.Board of Directors Composition
Given the Company's lines of business, internationalness (domestic demand oriented type), product category(materials), company size, and other considerations, the Board of Directors is deemed to be appropriate overall interms of things such as its number of members, balance among the members, and members' knowledge andunderstanding.The Board of Directors is also aware of the need to discuss diversity, such as the promotion of
female employees.

b.Operation of the Board of Directors

The frequency of Board of Directors meetings, meeting duration, proceedings, prepared materials, and thesystem for providing information are deemed to be appropriate on the whole. Because being flexible as to theprocedure of the meetings is considered useful in carrying out proper and adequate discussions among membersof the Board of Directors, this approach will be used accordingly in the future. In particular, to facilitate theunderstanding of outside directors, consideration will be made to make sure that ample time is available toconsider Board of Directors meeting materials and to provide information about Medium-Term Business Plan
progress and monthly business status summaries, as well as information to keep investors and shareholders
informed. Steps will be taken to ensure this information is reported properly and efficiently.

c.Functions of the Board of Directors

Proper measures are generally being taken concerning strategic decision-making, effective monitoring,consideration of stakeholder benefit, the creation of an environment for proper risk-taking, consideration andmutual oversight of conflicts of interest, and the establishment of executive activity scope, among other matters.
Discussions will be held going forward about building a system to allow for properly ascertaining the status ofinvestor and shareholder relations in a timely manner and for making prompt management decisions about B to C
business. Furthermore, summaries of the discussions held by the Nomination and Remuneration Committee, anadvisory body voluntarily set up, are properly reported to the Board of Directors, and this committee is deemed tobe generally functioning properly.

d.Proposals for Improvements and Other Matters

Improvements are underway in response to the results of the previous analysis and evaluation of the Board of
Directors effectiveness, and the current methods for analyzing and evaluating effectiveness are deemed to beappropriate at the present time. Further discussions will be held about these matters, including from theperspective of objectivity and other aspects.The current approach is deemed to be seamless and useful withregard to meetings of outside directors and corporate auditors for the purpose of exchanging information andopinions between them.As part of our approach to the stock market, further discussions will be held by the Boardof Directors based on the recognition that further improvements could be made to IR and SR policies andmethods.

26

Corporate Governance
CSR Promotion Structure

Activities to Promote Better Awareness of ComplianceTo carry out the business of the Mitsubishi Paper Mills Group with an emphasis on CSR, we have nominated a CSR
director and have established a CSR committee, which is chaired by the president. The CSR Committee oversees allnine areas of the Group's CSR activities (compliance, risk management, safety and health, the environment, productsafety, product quality, human rights and labor, information, and social contribution).

Director in Chargeof Technology andEnvironment Department

Product Safety
Product Liability(PL)Committee

Supervising office:Technology & Environmental
Department

Environment
Environmental Conservation
Committee

Supervising office:Technology & Environmental
Department

Social Contribution

Responsible department:
General Affairs & Personnel
Department

Information

Responsible department:
General Affairs & Personnel
Department

Human Rights and Labor

Responsible department:
General Affairs & Personnel
Department

Safety & HealthCompany-wide Safety and
Health Committee

Supervising office: General Affairs& Personnel Department

Risk Management
Risk Management Committee

Supervising office: General Affairs& Personnel Department

Compliance
Compliance Committee

Supervising office: General Affairs& Personnel Department

Asset Protection

Responsible department:
General Affairs & Personnel
Department

CSR Director

President

CSR Committee
Supervising office:President's OfficeDirector in Chargeof the General Affairs& Personnel Department

Director in Chargeof the General Affairs& Personnel Department

Internal Control

Responsible department:
General Affairs &Personnel Department

Director in Chargeof the Internal Audit
Department

Compliance27

Business Effectiveness andEfficiency
Operating Audits

Reliability of Financial Reporting

Responsible department:Internal Audit Department

Responsible department:Internal Auditing Department

To ensure our actions remain in accordance with the Code of Conduct of the Mitsubishi Paper Mills Group, the Group
has laid out rules to be followed by executives, employees, and other company-related people in the Mitsubishi Paper
Mills Group Compliance Conduct Standards, and we ensure every corporate activity is legally compliant. We have alsoestablished a Compliance Committee that reports to the CSR Committee, where the Legal Department works as its
supervisory office. The Compliance Committee provides training and conducts awareness-raising activities in order tofamiliarize all employees with the Code of Conduct and the Compliance Conduct Standards and to ensure legal
compliance.

■ Compliance NewsWe released nine Compliance News issues in fiscal 2018, providing an easy-to-understand look at issues
such as the Personal Information Protection Law, contracts, system development disputes, Act against Delayin Payment of Subcontract Proceeds, Etc. to Subcontractors, and compliance training.

■ Compliance Training
Our fiscal 2018 compliance training was held in October for all line managers in the Group. Then, over the
next six months, the line managers shared what they had learned with their teams. The training saw a total of
3,328 participants consider and discuss case studies that involved responding to situations where data
falsification was implied. Participants also completed questionnaires, and the views expressed on thequestionnaires were shared with all executives and employees. Certain issues were also marked to be rectified
in the future.

■ Legal Affairs Training
At the two legal affairs training sessions we held in fiscal 2018 for executives, line managers, and personnel
in charge of signing contracts, we promoted a better understanding of laws that applied to the participants'
work and communicated the importance of compliance.
First Session: "Introduction to M&A"
Date: September 15
Instructor: Keiko Kaneko, Attorney-at-Law(Of the law firm of Anderson Mōri & Tomotsune)
Participants: 138△

Responsible department:
Technology & Environmental
Department△

Product Quality

The Mitsubishi Paper Mills Group considers continued awareness programs to be essential for promoting an
understanding of the importance of compliance and for fostering a corporate culture that emphasizes good compliance.
As one measure to improve employees' concern for legal issues, we periodically issue a newsletter called ComplianceNews, conduct discussion-based compliance training for all employees, and provide legal affairs education taught by
instructors that include lawyers from a variety of specializations.

Second session: "Intellectual Property —Exercising Rights and Resolving Disputes"
Date: February 14
Instructor: Yoshio Kumakura, Attorney-at-Law(Of the law firm of Nakamura & Partners)
Participants: 235

FY 2018 Legal Aﬀairs Training (First Session)

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. And to better familiarize
employees with the system, we also discuss it in issues of Compliance News.

28

Corporate GovernanceRisk Management
To maintain and improve our corporate value, it is important that we properly manage a range of risks that arise in thecourse of our business activities. Using our CSR promotion structure, the Mitsubishi Paper Mills Group has expressed
its commitment to "building a risk management structure and improving its risk map as part of Group management,"
with the Group's risk management efforts overseen by the Risk Management Committee. Each division and committee
devises and executes a number of measures to address risks.

Risk assessment▼

Communication and discussion
CSR Committee▼▼

Monitoring and reviews
Risk Management Committee▼

Risk analysis▼

Risk identification

Risk response
Business environment volatility risks
Each company and each department
Legal violation risks
Compliance Committee
Safety and health risksGroup-wide Safety and Health Committee
Product Safety risks
Product Liability (PL) Committee
Environmental risks
Environmental Preservation Committee

Improving Our Risk Map
The Mitsubishi Paper Mills Group conducts cross-organizational monitoring of more than 200 risks group-wide. We
analyze 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 improve the effectiveness of our risk
management.

Building a Crisis Management System

The Mitsubishi Paper Mills Group formulated the Crisis
Management Manual in order to respond quickly in fulfilling its
corporate social responsibility and maintaining social credibility inthe event of an accident or disaster that could cause serious harmto people or equipment, or impact surrounding communities. And toconstruct an effective risk management system, we regularly
conduct simulation training and operation tests at every businesssite and at a scale that involves the entire company, also working to
identify and resolve issues.

Enhancing Information Management

Training for both communicating information andconfirming safety during emergencies

The Group practices the efficient and comprehensive usage of information and works to manage it properly. Alongwith establishing Information Management Regulations that set forth our measures for managing and protecting
information handled in our business activities, we have codified a guideline for upholding these regulations in the form of
the Information Handling Guidelines.

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

Corporate Governance
Information Disclosure■ Ordinary General Meeting of Shareholders

The Mitsubishi Paper Mills Group expresses its commitment to transparency in its business activities in the Code of
Conduct of the Mitsubishi Paper Mills Group. The Group has established and publicized its Disclosure Policy based on
this code and has declared that it will practice the timely and proper disclosure of corporate information. We have alsoestablished the Information Disclosure Regulations for ensuring that stakeholders receive an accurate, timely, fair, andcontinuous disclosure of information, with our Corporate Communications & IR Department in charge of managing
these efforts. We also hold public relations sessions as part of efforts to disclose information about the Group. In theinterest of fair disclosure, when we make announcements about things such as timely disclosed information, press
releases, and new products, we also post the information on our web site.
⇨ Reference site: Disclosure Policy
https://www.mpm.co.jp/eng/ir/disclosure/disclosure_policy.html

Financial Services
Agency's website◀

◀

Mitsubishi Paper Mills' website◀

Financial
Services
Agency◀

◀

Information
disclosure

Stakeholders

Media

◀

Tokyo
Stock
Exchange◀

Timely disclosure

TSE's website
Media reporting◀
◀

Discuss and verify

Department in Charge ofInformation Disclosure◀

General Affairs & Personnel Department /Accounting Department

Directors in Charge
Site Manager(Division General Managers)(Head Office Department Managers)

Prepare documents
for disclosure
Provide information

Information Handling Manager

Information DisclosureManager

Affairs & Personnel Department(President and C.E.O.)

Notify of finalized
matters

Director in Charge of the General

Board of Directors

Stock exchange
information◀

◀

Information disclosure system

To ensure that shareholders have sufficient time toconsider issues presented at the Ordinary General
Meeting of Shareholders, convocation notices areannounced over the Internet 29 days prior to themeeting date and mailed out 26 days prior to themeeting date. Information about the Ordinary General
Meeting of Shareholders is also provided in 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 toensure information is conveyed in an easily understoodmanner, and allotting ample time for questions andanswers with shareholders.

153rd Ordinary General Meeting of Shareholders■ Communication with Stakeholders
To provide our diverse stakeholders with a better understanding of the Mitsubishi Paper Mills Group’ sbusiness activities, we are committed to proactive communication and the proper disclosure of information.

Communication■ IR information site
An investor relations site can be found on the Mitsubishi
Paper Mills website.
Information is disseminated using this website, 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.

Analyst briefings

Mitsubishi Social Contribution Liaison Council(Experiencing Ecosystem Academy activities)

Business status briefing for the labor union

Environmental seminars⇨ Reference site: Investor Relations
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 ourprincipal 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)

30

31

Corporate Governance
Board of Directors and Corporate Auditors (as of August 31, 2018)

Board of Directors

President andChief Executive Officer

Representative Director,
Senior Executive Vice President

Representative Director,
Senior Managing Executive Officer

Director,
Senior Managing Executive Officer

Director,
Managing Executive Officer

Director,
Managing Executive Officer

Director,
Senior Executive Officer

Outside Director

Outside Director

Attorney-at-Law
Mori Hamada & Matsumoto
Law Office

Chairman and Certified Public
Accountant
ZECOO Partners, Inc.

Kunio Suzuki

Junji Harada

Nobuhiro Sato

Kazuhisa Taguchi

Masaki Shuto

Tomohisa Shinagawa

Kanji Morioka

Naoki Okawa

Soumitsu Takehara

Corporate Auditor

Standing Corporate Auditor

Kenji Oka

Outside Corporate Auditor

Outside Corporate Auditor

Outside Corporate Auditor

Former Director,Deputy
President, Meiji Yasuda Life
Insurance Company

President, Ryoshin Holdings
Co., Ltd.

Adviser, Research Instituteof Capital Formation,
Development Bank of Japan, Inc.

Hiroaki Tonooka

Takayuki Nakazato

Takeshi Kobayashi

32

Fair Operating Practices
Compliance with the Antimonopoly Act■ FSC forest certification

The Mitsubishi Paper Mills Group's corporate philosophy is to "live up to the trust of its customers in the world
market," "always be on the leading edge of technology," and "contribute to preserving the global environment andcreating a recycling society." Trust, technologies, and contributions that have true value are born from engaging in faircompetition and achieving mutual growth and improvement. As such, we believe that complying with the Antimonopoly
Act is the first step towards achieving our corporate philosophy.
Along with pledging to comply with the Antimonopoly Act in the Mitsubishi Paper Mills Group Compliance Conduct
Standards, we have established the Antimonopoly Act Compliance Manual to promote a better understanding of andcompliance with the Antimonopoly Act by all executives and employees. Guided by these principles, our businesspractices emphasize free and fair competition, regardless of circumstances.

Preventing Corruption

FSC forest certification was established in 1993 with the goal of auditing and certifying
responsible forest management according to sound economic, environmental, and social
principles. It aims to ensure that the world's forests are kept healthy by labeling wood andwood products sourced from these forests. There are two types of FSC certification:
forest management (FM) certification and chain of custody (CoC) (processing anddistribution process management) certification. In August 2001, the Mitsubishi Paper
Mills Group became the first paper mill in Japan to acquire CoC certification.
⇨ Reference site: FSC Certified Paper
https://www.mpm.co.jp/eng/env/fsc.html

Method for verifying legal compliance and sound management

The Mitsubishi Paper Mills Group maintains a resolute stance against anti-social elements that threaten social orderand safety. This stance is set forth in the Mitsubishi Paper Mills Group Compliance Conduct Standards, and executives,
employees, and other company-related people are made fully aware of the content of the standards. We have also
implemented an anti-social forces search system that uses an external database and that enables us to mitigate the riskof inadvertently entering into relationships with anti-social forces.

1. Evidence of use of the forest certification and CoC certification systems(FSC certified wood, 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.
◎ 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◎ 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 purposes
E ) Genetically modified trees
・Receiving audits of risk assessment results by an FSC certifying body

Promoting Social Responsibility in the Value Chain■ Raw Wood Procurement in Fiscal 2018

Mitsubishi Paper Mills' Compliance Conduct Standards prohibit business activities that may result in social decay:
entertaining or giving gifts to civil servants (including low-ranking civil servants), and giving benefits to officials in foreign
governments and public organizations. As part of efforts to build fair and transparent relationships, we have alsoestablished internal rules governing all manner of contributions and donations to organizations, and we take firm action
against bribery, the provision of improper benefits, illegal political donations, and other acts that could constitute politicalor administrative collusion.

Disavowal of Anti-social Elements

We aim to forge business relationships of mutual prosperity based on the belief that all suppliers involved in

procuring raw material and similar operations are partners that provide us with competitive products. In order to

We have verified that all wood chips and wood pulp procured in fiscal 2018 came from forests that werelegally and appropriately managed.

ensure that we as the Mitsubishi Paper Mills Group conduct ourselves responsibly and ethically, and that
suppliers practice fair trade with a similar business posture, we have established the Basic Policy for

Procurement and the Policy on Forest Resource Preservation and Nurturing, and on Wood Procurement and

FSC certified wood
44%

Products, which lay out our basic approach to raw material procurement. We work to promote social
responsibility by periodically having our suppliers, too, complete questionnaires.

⇨ Reference site: Procurement of Raw Materials
https://www.mpm.co.jp/eng/env/timber.html

Responsible Raw Material Procurement
Mitsubishi Paper Mills Group conducts business with wood as a principal raw material. In the interest of responsible
wood procurement, we were one of the first organizations to acquire FSC® forest certification, and procure timber fromforests being properly managed in accordance with FSC forest certification.
*FSC: Forest Stewardship Council®

33

FSC® C021528

Countries of raw wood chip production

Types of raw wood

0

20

Controlled wood
56%

40

60

80

Chile
35%

100 %

0

20

Australia Other
21%
11%

Japan
33%

40

80

60

100 %

Maintaining Conformance with the Clean Wood Act*In accordance with FSC forest management standards, we have completed the process of verifying that we are inconformance with the Clean Wood Act, which went into effect on May 20, 2017. Business entities that ensure businessis conducted in compliance with this law can register at third-party entities certified by the government, and the
Mitsubishi Paper Mills Group has completed this registration.
*The Act on Promotion of Use and Distribution of Legally-Harvested Wood and Wood Products

34

Relationship with the Environment
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 prevent global warming
and preserve biological diversity, but also to earn the trust of all its
stakeholders through the use of sustainable forest resources and throughefforts to develop environmentally friendly production technologies andproducts. This commitment is set forth in our Environmental Charter,
formulated in April 1993 to guide our distinctive business activities, whichleverage the Group's lines of business.
For the sixth year running, Mitsubishi Paper Mills has been given theDevelopment Bank of Japan’ s (DBJ) highest environmental rating. Thisrating reflects an acknowledgment by the DBJ that our efforts have been
"excellent advanced environmental initiatives."⇨ Reference site: Environmental Charter
https://www.mpm.co.jp/eng/env/charter.html

Mitsubishi Paper Mills received anenvironmentally rated loan from theDevelopment Bank of Japan (DBJ) in
March 2018 and we received the following
environmental rating: "excellent advanced
environmental initiatives."

Environmental Management System

To realize the fundamental principles of the Environmental Charter, the Mitsubishi Paper Mills Group has acquired
ISO 14001 certification for its major production facilities and is working to continuously improve the Group's
environmental performance. We are also building a company-wide system for ensuring the effectiveness of these
efforts. The Technology & Environmental Department is in charge of these initiatives and conducts environmental audits
once a year for all major business sites as a way to check these sites' environmental performance.

Research Laboratory
ManagerPresident

Director of Technology &the Environment

Environmental Manager

Statutory Manager

MillMill Manager

Mill Environmental
Conservation Committee

Special Subcommittees

Environmental Management
Division

Environmental Conservation Committee
Administrative office: Technology &Environmental Department

Affiliated Company
President

Chemical Substance Management
With the aim of protecting the environment and ensuring product safety with respect to chemical substances
throughout our entire supply chain, the Mitsubishi Paper Mills Group has formulated its own Chemical SubstanceManagement Guidelines and Rules for Administration of the Chemical Substance Management Guidelines inconformance with various regulations. The guidelines take into account the impact on the environment and humanhealth, as well as social trends and other considerations. All our mills, offices, and affiliated production companies
control and handle chemical substances properly and efficiently according to these guidelines, with central oversight by
the Technology & Environmental Department at the head office. We also formulated the Mitsubishi Paper Mills Group
Clean Procurement Standards and Procedures based on these guidelines, promote green procurement and makeefforts to mitigate environmental risks posed by chemical substances.

35

Relationship with the Environment
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 2018, ouroverall energy use was 89%, and fossil fuel-based energy consumption was 78% of that in fiscal 2006.
Energy consumption（TJ）
35,00030,52527,05730,000Types of energy used
100%
80

25,00060

20,00015,00040

10,00020

5,000
0FY 2006■ Fossil fuels

FY 2018■ Purchased electricity

0

FY 2006■ Renewable energy

FY 2018■ Energy from waste（Scope of statistics: Mitsubishi Paper Mills Limited, Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd., KJ SPECIALTY PAPER Co., Ltd.）

Logistics segment initiatives■ Eco Rail Mark Certification

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

■ Green Management Certification
Namitsu Co., Ltd., a distribution company affiliated with the Mitsubishi Paper Mills Group, has acquired GreenManagement Certification at its main facilities and is reducing the level of CO2 emitted by its trucks duringtransport. Ongoing efforts that include the use of start-stop systems improve fuel efficiency and reduce fuelconsumption. Aimed at reducing the environmental impact of the transport industry, Green Management
Certification is given to business entities that have been audited and certified by the Foundation for Promoting
Personal Mobility and Ecological Transportation for having reduced the environmental impact of their operations
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.

36

Relationship with the Environment
Preserving Biodiversity

Report of receiptof thinned wood
"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
administrative office（Office Chonai-kai,
environmental NPO）

Certificate of contribution to forest thinningand usage of wood from thinning

Morino Chonai-kai

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 theforest certification system under the forest certification
system. At the same time, we are engaged in a numberof efforts to help forest preservation and support more
prosperous local forestry and logging industries. This
includes promoting forest thinning through Mori no
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

Ecosystem Academy

As one member of the industry benefiting from trees, the "gifts of the forest," the Ecosystem Academy was opened in2010 with the goal of transmitting the knowledge and experience the Group has accumulated over the years to adiversity of people while helping to protect the global environment. With interactive environmental education, forest
surveys and research, and information dissemination as the three core activities, the academy is focused on
establishing and advancing ongoing efforts, carrying out activities throughout the Group with significant support fromrelevant outside organizations.

■ Interactive environmental education

In addition to environmental education that seeks topromote a greater knowledge of ways to prevent global
warming and protect biodiversity in the interest of forest
preservation, we carry out observations, measurements,
and tree planting using company-owned forests, andprovide opportunities to try papermaking and paper crafts
as a means to experience the art of manufacturing. In
fiscal 2018, a total of 770 participants took part in 25
sessions ranging from environmental education to tree
planting events in Kyoto, Tokyo, Fukushima, Iwate, andAomori.

■ Forest surveys and research

Environmental education held for Zhuhai MPM Filter, Ltd.
(a consolidated subsidiary)Along with conducting vegetation and growth surveys in company-owned forests, we work with the Wild Bird
Society of Japan's Shirakawa Chapter to conduct ongoing wild bird surveys and create birdwatching areas. In
2017 we began conducting soil life surveys under the guidance of Dr. Tadashi Miyashita, a professor at the
University of Tokyo.

■ Information dissemination

We hold regular environmental seminars led by instructors engaged in pursuits that include forestry,
environment preservation, and teaching at universities. At the eighth Environmental Seminar, held in 2017,professor of the University of Tokyo, Dr. Takeshi Tange and Forestry Girls founder, Yuka Inoue were invited to
speak on the theme "Thinking about Satoyama." They gave talks from an academic perspective and discussed
the Forestry Girls' efforts to create Satoyama, providing a multifaceted examination of the deep connection
between human activity and the Satoyama.
®

37

FSC C021528

Relationship with the Environment
Effective Use of Resources

The Mitsubishi Paper Mills Group's main mill, the Hachinohe Mill, gets energy from the black liquor produced in thepulp production process as well as from the paper sludge generated in the use of wastepaper and the papermaking
process. The black liquor is burned in recovery boilers, where heat energy and chemicals used to manufacture pulp arerecovered. The paper sludge, along with cut up tires, waste wood, and other waste materials, are used as fuel to power
waste boilers. The incinerator bottom ash produced by the waste boilers and the ash produced by coal boilers is used tomake a recycled construction material named "Reglobe" and is also recycled into cement material and raw material forsteelmaking. These efforts to effectively use waste reduce final disposal volume while at the same time reducing fossil
fuel consumption.
Carbon fixation

Properly managed forests

Customers

Waste paper

Local companies, etc.

Paper andpulp products

Waste tires andwaste material

Ash recycling

CO2

EnergyWood chips

Pulp millprocess
Wood chips andwaste paper⇨ PulpPapermaking
process
Pulp ⇨ Paper

Paper sludge
Waste boilers

Coal boilers

Recovery boilers

Chemical recovery

Biomass fuels■ Amount of waste generated and effectively used
（1,000 tons）

120
100
80
60
40
20
0

2014

2015

2016

■ Waste generated

2017■ Waste used

2018
（FY）

（Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Kitakami HiTec Paper Corporation, KJ SPECIALTY PAPER）

38

Relationship with the Environment
Material Balance

Mitsubishi Paper Mills Group(Domestic)

Input
Main raw materials
Imported wood chips
Domestic wood chips
Purchased pulp
Waste pape
Inorganic pigments(1,000 tons)
806
399
36
45
63

1 business officeSpeciality Materials R&D
Laboratory(Crude oil equivalent, 1,000kl)
Fossil fuels
269
Purchased electricity
43
Biomass
346
Waste-derived fuel41

Service waterIndustrial water

Amount released
COD
SS

KJ SPECIALTY PAPER
Co., Ltd.

960
857
264
375

(1,000 tons)(1,000 Nm³)
(1,000 Nm³)
(tons)(million tons)
127(tons) 7,702(tons) 3,660

Waste

Toho Tokushu Pulp
Co., Ltd.

Waste generated
Volume effectively used
Final disposal amount127(1,000 tons)

114
87
9

Product sales volume

Reference: 2 mills in Germany

Purchased pulp
(1,000 tons)
134(1,000 tons)
Waste paper0Service water usage (1,000 tons) 2,777

Environmental impact data

Atmospheric Release

Released into water systems

Kitakami HiTec Paper
Corporation(million tons)

OutputCO2 emissions
NOx emissions
SOx emissions
Dust and soot3 mills

EnergyEnvironmental Indicators

Paper(1,000 tons) 881
Photosensitive materials (million m²) 27
53(1,000 tons)
Pulp

45
CO2 emissions (1,000 tons)(1,000 tons) 2,087
Wastewater

Unit: kg/year (mg-TEQ/year is used for dioxins only)

Volume transferred
Sewerage
Off-site1

Silver and its water-soluble compounds

82

0

0

0

0

2

Chloroform

127

20,600

4,900

0

0

3

Cyclohexylamine

154

0

0

0

0

4

2,2 -Dibromo-2-Cyanoacetamide

210

0

12

0

0

5

Dioxins

243

0.00

4.53

0.00

2.90

6

Triethylamine

277

2,100

0

0

0

7

Toluene300

17,200

0

0

8,400

8

Hydrazine

333

0

0

0

0

9

Hydroquinone

336

0

0

85

0

10

Boron and its compounds

405

0

0

210

0

11

Formaldehyde

411

178

1

38

771

Methylnaphthalene

438

250

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). In FY 2018, all preregistered transformers and capacitors wererendered harmless.
Efforts are also under way to detoxify stabilizers containing high concentrations of PCBs, and plans call for all stabilizers to be
detoxified by the legally mandated deadline.
*We are also detoxifying hardware containing low concentrations of PCBs.

39

FY 2006

FY 2016

FY 2017

FY 2018

15,131

11,174

11,572

12,089

13.6

12.1

12.5

12.7

Water consumption

Million tons

125

127

121

127

Wastewater

Million tons

-

126

122

127

CO2 emissions*1

1,000 tons

1,164

959

957

960

1,000 Nm³

1,076

910

876

857

1,000 Nm³

247

223

272

264

tons

-

406

459

375

tons

Atmosphere
NOx
SOx
Soot and dust
Water quality
COD

Waste generated
Final disposal amount

7,717

7,051

7,123

7,702

tons

3,417

3,730

3,723

3,660

1,000 tons

120

99

105

114

15

8

11

9

1.40%

0.95%

1.23%

1.23%

1,000 tons

Percentage vs.
production volume

Targets（FY）

12.1 (FY2021)

920 (FY2021)

0.30% (FY2021)*1 For CO2 emissions from purchased power, we use the CO2 emissions coefficient provided by the Federation of Electric Power Companies of Japan.
*2 Final disposal rate = (final disposal volume / production volume) x 100

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Kitakami HiTec Paper Corporation, KJ SPECIALTY PAPER

12

TJ

Unit fossil fuel-based energy consumption GJ/product-tons

Final disposal rate*2

Volume of PRTR-listed substances emitted and transferred in FY 2018
Emissions
Atmospheric Water systems

Fossil fuel-based energy consumption

Waste

Figures from Mitsubishi HiTec Paper Europe GmbH (two mills in Germany: 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.

Cabinet order No.

Natural resources

SS

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.

No. PRTR Class 1 Designated Chemical Substances

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

Environmental Accounting in FY 2018

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

Environmental conservation costs
Category

Unit: Million yen

Primary Initiatives

Investments

Expenditures(1) Indirect business costs

387

2,362

1. Pollution control costs

198

1,366

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

Recovery and recycling of container and packaging materials
Environmental education, environmental management systems,
and acquisition of certifications
Development of environmentally conscious products
Greening, environmental beautification, and environmental data
disclosure
Fees for pollution-related health damage

Total

Economic benefit of environmental conservation measures
Details of benefits

Revenue

Benefit of reusing pallets

469

Profits from sale of repurposed resources

23

Cost savings from energy efficiency

10

Cost savings from improved material yield
Total

5

72

991

327

424

4

62

0

0

30

32

0

49

748

2,929

Unit: Million yen

Category

Cost savings

117

Amount66
568

40

Relationship with Employees
The Mitsubishi Paper Mills Group makes a number of efforts to fully leverage the abilities of every employee based on
our Principles and Guidelines Concerning Human Rights and Labor Practices, and ensure that we can continue tocreate comfortable and fulfilling work environments.

Occupational Safety and Health Initiatives
The Mitsubishi Paper Mills Group views all occupational safety and health activities as one of the Group's toppriorities. Based on the Group-wide Safety and Health Management Guideline, which incorporates the Principles andGuidelines Concerning Human Rights and Labor Practices, we carry out a number of activities as a unified corporategroup.

Fiscal 2018 activities

Job Safety Performance
Lost time accident frequency rate

（Accident frequency rate）
1.5

●

1.0
◆

●
◆

●

◆

●

◆
●

◆

◆

●

0.5

0.0

2009

2010

2011
●

◆

●
◆

2,000

■

◆

1,900

■

◆

●

2015

2016

2017

2018
（FY）

Japan Paper Association (industry statistics)

■

■

◆

◆

2009

■

◆

◆
●

■

■

■

◆

◆

◆

●

●

●

2016

2017

2018
（FY）

●

2010

Job Level-based training(Takasago Mill workgroup leaders)

■

●

●

●

1,800

◆

●

■

2011
●

2012

2013

Mitsubishi Paper Mills

2014
◆

2015

Industry-wide■

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

Promoting Good Mental and Physical Health

One of the goals in our action plan to comply with the Act on Promotion of Women's Participation and Advancementin the Workplace is achieving a 70% or higher 5-year retention rate for female employees. We have revised a numberof programs over the years, including extending our childcare leave period and the period during which employees canwork shortened hours to provide childcare. These efforts have created workplaces that make program participants want
to stay with us. We also provide new managers with training on subjects such as handling team members' pregnancy,
childbirth, and returning to work, to give them a better understanding of how to create comfortable working
atmospheres, allocate duties, and provide support to program participants.

2014

Total hours worked annually●

Promoting Diversity

2013*Scope of statistics: Kyoto Mill, Takasago Mill, Shirakawa Site, MPM Operation Co., Ltd. Kitakami HiTec Paper Corporation,
KJ SPECIALTY PAPER, and each site’s Collaboration Committee

2,100

Promoting good health among our employees is another important theme aimed at improving labor productivity. Witha belief in the importance of business entities actively promoting employee health management, the Mitsubishi Paper
Mills Group promotes good mental and physical health as a way for employees who are under considerable stress, or
who have been diagnosed with a condition through regular medical checkups, to take preventive measures at an earlystage. We make a number of efforts to raise awareness of good health management among employees. These include
stress checks, mental health counseling via an external support program, and working with the health insurance union
to establish and operate a committee whose goal is to reduce healthcare expenses while maintaining and improving
employee work performance (state of health).

2012

Mitsubishi Paper Mills（Hours/FY）

41

◆

◆

●

With the goal of further strengthening our efforts to eliminate serious workplace accidents, the president conductedmill safety inspections, and safety training for each job level was held. We also took steps to rectify and visualize fatal
accident risk areas based on the "efforts to identify fatal accident risks," which were conducted for all workplaces in2016.

Safety inspection conducted by the president(Kitakami HiTec Paper Corporation)●●

Paid leave acquisition rate

（%）
100

●
●

●

◆

◆

◆

2009

2010

2011

80

●

●

●

●

●

◆

◆

◆

◆

◆

◆

◆

2012

2013

2014

2015

2016

2017

2018
（FY）

●

●

60

40

●

Mitsubishi Paper Mills◆

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

42

Relationship with Customers
In order to provide customers with products they can feel good about using, we have drafted our own Product Safety
Code, which guides our efforts to maintain and improve product safety.
Along with maintaining legal compliance and conducting fair marketing practices, we will continue to actively
communicate with our customers to provide products that benefit society.

Product Safety Code

Mitsubishi Paper Mills believes that the role of a company in society is to provide safe and useful products
along with satisfying 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 tomaintain stable management and continue providing society with safe products and satisfying services that meetthe 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.

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

Quality control system

To be able to quickly respond to customer
feedback and quality issues, the Group'sbusinesses are divided into seven businesssegments, and have built a quality control
system overseen by the president.
The key production facilities in eachbusiness segment have acquired ISO 9001
certification. In addition, quality control
administrators with quality-related
responsibilities and authority for eachbusiness segment share information withthe relevant business division generalmanagers while maintaining and improving
the quality control system. Furthermore, toguarantee quality control systemeffectiveness, the Technology &Environmental Department at the head
office regularly audits quality control efforts
for each business segment and issues
reports to the officers in charge.

Hachinohe Mill business segment
Quality control administrator:Hachinohe Mill Manager

President

Takasago Mill business segment
Director in Charge ofTechnology &the Environment
Printing Paper Business
Division General Manager
Imaging Division
General Manager
Speciality Materials
Division General Manager

43

Digital & screen printing expo
SGIA Expo 2017 (New Orleans)

Screen and textile printing expo
FESPA 2018 (Berlin)

New Values Enhanced by Machine, Material,
and Processing Technology
N-PLUS (Tokyo)

Quality control administrator: Takasago Mill Manager

Kyoto Mill business segment
Quality control administrator: Kyoto Mill Manager

KHP business segment
Quality control administrator: KHP* president

Pressboard business segment

Quality control administrator: Commercial Printing &Business Communication Paper Sales
Department Manager

Speciality Materials Business segment
Quality control administrator: Speciality Materials
Division Deputy General Manager

KJ SPECIALTY PAPER segment
Quality control administrator: KJ SPECIALTY
PAPER president*KHP: Kitakami Hitec Paper Corp.

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

Asia Nonwovens Exhibition and Conference
ANEX 2018 (Tokyo)

Encouraging the worry-free use of our products

Product Liability (PL)Committee
Product Safety
Judgment Panel
Product Liability (PL)Subcommittee

Product safety activities◆ Legal compliance team◆ Outside party negotiationteam◆ Education team
◆ Consumer support team
◆ Product safety assurance
team

The products the Mitsubishi Paper Mills Group provides are made from raw materials proven to be safe. Along withswiftly obtaining toxicological data and information about new regulations, all departments involved — including
affiliated companies — share information with each other and conduct thorough safety inspections for the raw 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 voluntarystandards set by the industry according to product application and satisfy the demands of individual customers. We willcontribute to the betterment of society by continuing to provide eco-friendly, safe products that customers can feel safe
and comfortable about using.

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 to proactively interact with communities through its business activities. Throughactivities such as those conducted by the Eco System Academy (see page 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.

Social Contribution - Direction of Activities● 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 are activities closely connected with our business andinclude supporting FSC®-certified forests, supporting forest thinning, etc. together with NPOs.
● 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.

Coexistence with the Community

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

Every year the Takasago Mill takes part in the
Takasago lantern festival, which is put on by Takasago
community members. During the event, we open up the
Mitsubishi Paper Mills' Uomachi Club to the public,
allowing people to use this historic building as a venue
for jazz concerts and other events.

■ Opening up our row of cherry trees to
the general public

There is a row of cherry blossom trees at the Kyoto
Mill that turns into a "cherry blossom tunnel" in thespring. We open up this area to the public when theflowers begin to bloom so that community members canalso enjoy the sights. We also take visitors' pictures andoffer a photo printing service. The event has been very
well appreciated.

Communication with community members

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

Dialogue with community members

We regularly hold dialogues with community members to provide plain language explanations of our businesssituation to them and also as a means to learn their thoughts on, and solicit suggestions concerning, our business, aswell as to stimulate local economies through our business activities.
■ Shirakawa Site — Explanatory Meeting on the State of Operations (April)■ Hachinohe Mill — Environmental Monitoring Meeting (November)■ Kitakami HiTec Paper Corporation — Community Gathering (December) 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. We hope the program will be of benefit in these students' futures.

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

45

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

Mitsubishi Paper Mills' Uomachi Club (Takasago Mill)

Opening up to the public of the "cherry blossom tunnel"(Kyoto Mill)

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

■ Participation in Mt. Fuji Foothills
Beech Forest Development Project

Papermaking workshop at the Environmental Fair (Kyoto Mill)

Participants in Mt. Fuji Foothills Beech Forest Development
Project (KJ SPECIALTY PAPER)

Every year in November, Nagaokakyo City holds its
Environmental Fair as a means to promote better
environmental awareness among residents. To bringfurther excitement to the event, the Kyoto Mill conducts
papermaking workshops and gives talks on the lifecycle
and bounties of the forest to schoolchildren and theirparents. The mill also provides information about
environmental efforts being made by Mitsubishi Paper
Mills.

The year 2017 marked the 10th year of KJ
SPECIALTY PAPER’ s participation in the Mt. Fuji
Foothills Beech Forest Development Project, which isput on by the city of Fuji. This year, 14 company-relatedparticipants planted 2,000 beech and other broadleaf
tree saplings. As an enterprise rooted in the community,
KJ SPECIALTY PAPER will continue actively
contributing to environmental preservation activities
around Mt. Fuji, a Cultural World Heritage site.

46

Relationship with Communities
Contributing to Local Communities■ Sponsorship of children's portableshrine parade

Namitsu Co., Ltd., a consolidated subsidiary,sponsored the Children's Portable Shrine Parade, which
is organized by Oohiraki Kindergarten, a neighbor to
Namitsu’ s head office, and received an offering fromthe kindergarten’ s children. Through efforts such asthese, we will continue to strengthen relations with
community members and achieve mutual growth.

■ Support for earthquake victims
in Mexico

Two powerful earthquakes did extensive damage to
Mexico in September 2017. MP Juarez LLC, which isbased in Mexico and its employees donated relief
goods.

Making Use of our Business Activities■ Support for calligraphy performanceat Hachinohe Higashi High School
The Hachinohe Mill regularly provides Hachinohe Higashi HighSchool's calligraphy club with the jumbo-sized paper used atcalligraphy performances. Famous as a frequent participant in the
Shodo Performance Koshien, a national calligraphy competition,
the high school gives outstanding performances at various eventsin the area. We look forward to lending our support to future
calligraphy performances by Hachinohe Higashi High School.

Calligraphy Performance at Hachinohe City Hospital■ Photo printing service

Donating relief goods to earthquake victims (MP Juarez LLC)

Leveraging the technologies of Mitsubishi Paper Mills'
Imaging Media Business, we provided photo and printing
services at events held near the Kyoto Mill and the
Kitakami HiTec Paper Corporation.
■ Takenoko Festa and Garasha Matsuri (Kyoto Mill)■ Kitakami Tenshochi Sakura Festival, Iwate Kitakami
Marathon (Kitakami HiTec Paper Corporation)■ Braille Calendar
The release of the 2018 edition of the Braille Calendar
is the 22nd edition, since the first edition was released in
1997. The calendar, which has contained food recipes inrecent years, has been well appreciated by those it has
been donated to, such as social welfare organizations
and the Japan Braille Library, as well as the visually
impaired who use the calendar.

Sponsorship of children's portable shrine parade (Namitsu)■ Community cleanup activities

To develop comfortable urban environments together
with community members, every one of our businesssites regularly takes part in efforts to beautify and clean
up their surrounding areas.
As examples of these efforts, every April and October
the Speciality Materials R&D Laboratory participates incommunity cleanup efforts held by the liaison council it
belongs to. Also, Toho Tokushu Pulp Oyama Mill
conducts green belt beautification activities every monthon roads managed by Oyama City.

Kitakami Tenshochi Sakura Festival(Kitakami HiTec Paper Corporation)
Industrial park cleanup (Speciality Materials R&D Laboratory)

Braille Calendar (2018 edition)

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

Breakdown of philanthropic expenditures

Philanthropic Expenditures

Regional activities/
cultural preservation

Social welfare

4,000

Environment
International exchange, etc.

Academics,
Culture and arts

2,000

0

47

Greenbelt beautification activities on city roads(Toho Tokushu Pulp's Oyama Mill)

Gomi-zero (zero trash) activities (Kyoto Mill)

research,
education

2013

2014

2015

2016

2017

2018
（FY）

48

Fiscal 2018 CSR Activities
In fiscal 2018, we made efforts toward improving corporate value with the selection of the following as our two top priority
issues: "ensuring product quality" and "enhancing activities to ensure safety and health." We also promoted environmental
preservation activities and the reduction of industrial waste, and worked to make our products more environmentally friendly
through efforts such as using FSCⓇ-certified paper to help achieve the UN's Sustainable Development Goals (SDGs).

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
・Held meetings of the Nomination and Remuneration○
Committee, conducted outside director conferences, andprovided training for directors and Corporate Auditors
・Reviewed training conducted last fiscal year for directors
・'Review governance functions○
and Board of Corporate Auditors, had Board of Directors
evaluate their effectiveness, and held outside director andBoard of Corporate Auditors meetings
・Enhance structural preparations and our risk ・Conducted semiannual risk map reviews, reconfirmed risk,○
and re-evaluated risks
map in the interest of Group management
・Decided on response measures should head office functions
・Discuss the drafting of a BCP○
be lost・Conducted safety check training, reconfirmed issues, andbegan discussions on responses
・Provided training for all line managers in the Group and had
・Improve employees' understanding of the○it passed on to all employees (including part-time andCorporate Code of Conduct, thecontract employees) in the workplace
Compliance Conduct Standards, andrelated laws and regulations through morerobust compliance education

・Conducted legal checks and had legal consultations
・Strengthen legal functions
・Promote a better understanding of laws and ・Conducted legal training for executives, line managers, andthose in charge of signing contracts
regulations applicable to our operations,and enforce compliance・Regularly issued the Compliance News newsletter as ameasure to improve employees' concern for legal issues
・System to check anti-social elements introduced as a trial
・Strengthen and enhance our system forto study its usefulness
responding to anti-social elements
・Disseminated information that includes Second Mid-Term
・Promoting communication ・Further improve the IR information weManagement Plan progress (analyst briefing materials),
provide on our website, etc.
with stakeholders
corporate reports, annual reports, earnings briefing andinformation related to General Meetings of Shareholders
・Disseminated information about investments (2), new・Disseminate information about new
products (6), trade shows (11), and shop and gallery
products, etc. (sharing information about
openings
affiliated companies)
・Enhance and make use of the Head Office ・Held 5 planned exhibitions and exhibited products in atimely fashion in the permanent exhibit
gallery・Issued Corporate Report 2017 in August in an integrated
・Enhance our corporate reportreport format
・Step up efforts at continually promoting CSR ・Conducted awareness raising activities using corporate
・Expanding initiatives out
reports, and better familiarized Group employees with CSR
activities
to affiliated Group
policycompanies○○○

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

・Discuss efforts to absorb more CO2 using
company-owned forests in Japan・Track Scope 3 CO2 emission trends
・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, etc.
・Develop and roll out new environmentallyconscious products
・Reduce industrial waste

・Improve environmental communication

49

Key Issues
・Ensuring product safety○○

Action Plan・Enhance chemical substance management

・Enhance the activities of the Product
Liability (PL) Subcommittee
・Ensuring product quality ・Promote thorough adherence to ISO 9001
management and improve customer
satisfaction (reducing complaints, etc.)
・Promote the commercialization of・Rolling out new
proposed ideas and support businessuser-oriented products
activities focused on the customers'
and building optimalpurchasing processsales channels

Activity Results
・Promptly revised controlled substance lists in light ofregulatory revisions
・Business sites promptly reported to local governments inaccordance with PRTR Law
・Convened the PL Subcommittee six times
・Shared information in a timely fashion, including
information about law amendment
・2H quality audit (product audit) identified one item
requiring improvement; formulated corrective action plan・Devised projects with social relevance and otherwise
revitalized the system for making proposals

Evaluation
○

○
△
△

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

Key Issues
・Enhancing activities toensure safety andhealth○・Promoting various
measures to improve
human resource
performance○

Action Plan
・Improve efforts to eliminate serious
accidents
・Improve safety system audits

Activity Results
・Conducted three "special audits" and worked to prevent
accident recurrence
・Audited efforts made to identify fatal accident risks
・Checked state of voluntary inspections to gauge theseverity of equipment aging
・Held debriefings on results following stress checks and・Follow up on stress check results andimproved the systemenhance the system
・Acquire necessary personnel through・Recruited personnel by utilizing various hiring techniques
and took measures to prevent employees from resigningenhanced hiring activities and work to retain
them
after a short period of time・Collect information about work style reform・Internally discussed means of correcting disparities
targeted as priorities by the government and improved
and discuss means of implementation
systems

Evaluation
○
○
○
○
○

○

Basic Policy 5. Promoting activities that contribute to society
Key Issues

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

Activity Results
Evaluation
・Maintained and managed equipment subject to the Revised○
Fluorocarbons Recovery and Destruction Law
・Installed new and modified equipment to reduce fossil fuelusage
・Carried out operations under our Forest Management Plan○
for a company-owned forest in Shichinohe
・Maintained J-VER credit certification
・Worked to acquire information related to Scope 3 and○surveyed industry trends
・Made active use of FSC-certified wood chips and met○
targets
・Acquired a deeper understanding through participation in JBIB○
activities, etc.
・Took part in Eco-Products 2017 and promoted the FSC logo○
・Applied and was approved for credit for wastepaper usedby Hachinohe Mill・Exhibited TDP at an overseas trade show, loaned some to○users, and otherwise promoted environmentally conscious
products
・Detoxified capacitors with high concentrations of PCBs○
within the legally mandated deadline
・Successfully began operation of waste recycling equipment
at Hachinohe and shipped 1,139 tons of product・Worked to hold a dialogue with stakeholders through○Environmental Monitoring Meetings at the Hachinohe Milland other opportunities
・Participated in regional environmental conservation
organization activities
・Participated in community cleanup efforts

FSC® C021528

・Promoting community
support activities
・Promoting culturalcontribution activities
・Promoting activities of
the Eco System
AcademyTop Priority Issues

Action Plan
・Take part in local activities at eachbusiness site and continue good relations
with communities
・Implement ongoing support focusing on
the Mitsubishi Group and related industry
groups・Ensure these activities become ongoing

Activity Results
・Every business site strengthened relations with local
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 experiential environmental education sessions in
Kyoto, Tokyo, Fukushima, and Iwate○(Evaluation)○: target achieved○○△: Insufficient implementation

50

Fiscal 2019 CSR Action Plan
For fiscal 2019, we have established the following three things as top priority issues: "enhancing activities to ensure safety
and health," "promoting various measures to improve human resource performance," and "customer-oriented productdevelopment." Implementing our action plans will see us 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
uniquely suited to the Mitsubishi Paper Mills Group.

ISO 26000 Core Issues 1.
ISO 26000 Core Issues 2.
Key Issues

Organizational governanceFair operating practices

・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 Group
companies

Action Plan

・Ensure good governance based on the Basic Policies on
Corporate Governance・Review governance functions

・Enhance structural preparations and our risk map in the interest ofGroup management
・Discuss ways of improving simulations and training
・Improve employees' understanding of the Corporate Code of
Conduct, the Compliance Conduct Standards, and related laws
and regulations through more robust compliance education
・Strengthen legal functions
・Promote a better understanding of laws applicable to ouroperations, and enforce compliance・Strengthen and improve systems through Group-wide
implementation of information management rules
・Further improve the IR information we provide on our website, etc.
・Disseminate information about new products, etc. (sharing
information about affiliated companies)
・Enhance and make use of the Head Office gallery
・Enhance our corporate reports
・Step up efforts at continually promoting CSR activities

ISO 26000 Core Issues 5.
Key Issues

Environment

・Promoting activities to prevent global warming

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

ISO 26000 Core Issues 6.
Key Issues

Consumer issues

・Ensuring product safety
・Ensuring product quality

・Customer-centered product development

ISO 26000 Core Issues 3.
ISO 26000 Core Issues 4.
Key Issues

Human rights
Labor practices

・Enhancing activities to ensure safety and health・Promoting various measures to improve humanresource performance51

Action Plan

・Improve efforts to eliminate serious accidents
Review standard operating procedures concerning fatal accident
risks
・Practice appropriate assignment of diverse personnel andimprove individual performance(1) Practice appropriate assignment of personnel throughout theGroup and hire personnel so as to achieve the appropriate age
distribution(2) Improving training to boost skills and promoting self-awarenessISO 26000 Core Issues 7.
Key Issues

Action Plan

・Promote CO2 emissions reductions in our business activities andemployees' homes
・Support and get involved in renewable energy projects
・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, etc.
・Develop and roll out new environmentally conscious products
・Reduce industrial waste
・Improve environmental communication

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 (reducing complaints, etc.);
continue to conduct quality audits
Also, step up repeat complaint monitoring and review efforts toprevent data falsification (manage contractors and control datasuch as labels and SDS)
・Identify latent customer needs and explore useful products andservices that bring high customer satisfaction

Community involvement and development

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

Action Plan

・Take part in local activities at each business site and continue
good relations with communities
・Implement ongoing support focusing on the Mitsubishi Group andrelated industry groups
・Ensure these activities become established and advanced

Top Priority Issues

FSC® C021528

52

Company Profile and Corporate Data (as of March 31, 2018)
Company Name
Mitsubishi Paper Mills Limited

Consolidated subsidiaries
20 in Japan, 6 overseas

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

Mitsubishi Paper Sales Co., Ltd.
Kitakami Hitec Paper Corporation
Mitsubishi Paper Engineering Co., Ltd.
Ryoshi Co., Ltd.
Diamic Co., Ltd.
NAMITSU Co., Ltd.
MPM Oji Home Products 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 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
3,723
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 and uncoated graphic papers, magazine paper,
specialty printing paper, communication paper, sanitary
paper, electrical insulation pressboard, high-quality
white paperboard, specialty white paperboard, andother specialty paper, bleached kraft pulp, and specialty
pulp
Imaging Media Business
Inkjet paper, photographic paper, base paper forphotographic paper, printing plate materials, platemaking systems, CTP software, and chemicals
Speciality Materials Business
Functional paper, nonwoven fabrics, filters, rewritable
media, battery separators, and specialty materials
Warehouse and Transport Business
Warehousing and transport-related business
Other Businesses
Engineering operations, sports facility management,
insurance agency business, travel agency business,real estate business● Total number of authorized shares

90,000,000● Total number of outstanding shares

34,258,433● Shareholders

17,314(1,009 year-over-year decrease)● Composition of shareholders
March 31,
2018

30.8

March 31,
2017

31.9

March 31,
2016

31.6
0

10

20

2.6

20.1

12.0

34.5

20.4

11.2

34.9

20.5

10.1

36.5

1.6
1.3

30

40

■ Financial institutions

50

60

70

80

90

100
（%）

■ Financial instruments business operators■ Other corporations■ Foreign corporations, etc.
■ Individuals, other⇨Reference site: Corporate Profile/Business Fields
https://www.mpm.co.jp/eng/company/gaiyo.html⇨Reference site: Investor Relations
https://www.mpm.co.jp/eng/ir/index.html

53