Corporate Report 2021

©WWF ジャパン

Mitsubishi Paper Mills Ltd.

Editorial Policy

Table of Contents

Mitsubishi Paper Mills publishes the Mitsubishi Paper Mills Corporate Report, which summarizes financial
and non-financial information to provide stakeholders with an understanding of the Group’ s overall businessactivities. In these pages, we report on the Mitsubishi Paper Mills Group’s corporate value building activities
which seek to bring about a more sustainable society.

Editorial Policy ･･････････････････････････････1

Ensuring Fair Trade･･･ ･････ ･･････････ ･････ 33

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

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

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

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

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

The companies included are Mitsubishi Paper Mills Limited and its consolidated subsidiaries (18 companies
in Japan and 6 companies overseas), as well as its equity-method affiliates (2 companies in Japan and 1
company overseas).

■ Reporting Period

The reporting period is fiscal 2021 (April 1, 2020 to March 31, 2021), with some content included from outside
this period.

■ Guidelines Referenced

ISO26000
GRI’s Sustainability Reporting Standards
Environmental Reporting Guidelines (2018 Edition), Ministry of the Environment■ Contact

Mitsubishi Paper Mills Limited
General Affairs & Corporate Communications Group, General Affairs & Personnel Department
2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026, Japan
Phone: +81 3 5600 1487
Facsimile: +81 3 5600 1489
E-mail：csr@mpm.co.jp■ IssuedManagement Policies･････････････････････････5
Consolidated Financial and Non-Financial Highlights･･ 7

Special Feature

Business Development from a Long-Term Point of View･･ 9

Business Activities ofthe Mitsubishi Paper Mills Group
Overview of Business Segments ･･････････････ 15
Printing Paper Business････････････････････15
Imaging Media Business ･･･････････････････17
Speciality Materials Business ･･･････････････19
Research and Development ･･････････････････21

Initiatives Toward Sustainability
Initiatives Toward Sustainability･････････････ ･･23

August 31, 2021 (Previous: August 31, 2020)

The Way We See Sustainability ････････････ ･23■ Next Report

Late August 2022

Sustainabilit Promotion Structure ･･ ･･････････23

Our Website

Key Issues (Material Issues) Concerning CSR
Activities ･･ ････････････････････････････ 25

ESG/ISO 26000 and Initiative of MPM Group ･･ 24

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 recruitment.
Corporate reports, CSR reports

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

Basic Policy on Corporate Governance ･･････ ･ 26
Corporate Governance Framework･･･････････26

Outside Directors ･････････････････････ ･･･ 28■ Investor Relations

Assessments of the Board of Directors
Effectiveness ･･･････････････････････ ･･･ 29

Annual Business Reporthttps://www.mpm.co.jp/eng/ir/library/index.html■ Products & Services

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

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

Responsible Raw Material Procurement ･･ ････ 33
Relationship with the Environment･･･････ ･････ 35
Environmental Management System ････････ 35
Chemical Substance Management ･･････････ 35
Preventing Global Warming ･･･････････････ 36
Preserving Biodiversity ･･･････････････ ････ 37
Effective Use of Materials ････････････ ････ ･･ 38
Material Balance･･････････････････････････39
Environmental Indicators ･･････････････ ･ ･･･ 40
Relationship with Employees ････････････ ････ 41
Occupational Safety and Health Initiatives ･･･ ･41
Promoting Good Mental and Physical Health ･･ 41
Efforts to Create Comfortable Work
Environments･･･････････････････････････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 ･････････ ･･･ ･ ･･ ･46
Fiscal 2021 CSR Activities ･･････････････ ･ ･ ･ ･ 47
Fiscal 2022 CSR Action Plan ･･･････････ ･ ･ ･ ･ ･ 49

Information Disclosure ･･････････････ ･ ･････30

Financial Section

51

Compliance････････････････････････ ･ ･････31

Company Profile and Corporate Data

58

Risk Management ･･････････････････ ･ ･････32■ Research & Development

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

Corporate Governance ･･････････････････････ 26

Board of Directors and Audit & Supervisory
Board Members ･･ ･･････････････････････27■ CSR / Environment

1

To Our Stakeholders

History and Main Offices and Mills of the Mitsubishi
Paper Mills Group ･･････････････････････ 59<Cover photo>“FSCⓇ-Certified Pandaruma,” which was developed throughthe collaboration among WWF Japan, Ichise Co., Ltd.,
Shirakawa Daruma Sohonpo, and Mitsubishi Paper Mills Ltd.

2

Message from the President
Mitsubishi Paper Mills Group Corporate Philosophy

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

Yukihiro Tachifuji

President andChief Executive Officer

立藤 幸博
Aims of the Mitsubishi Paper Mills Group3

Since its founding in 1898, Mitsubishi Paper Mills has, as “technological Mitsubishi,” contributed to the development of
information media such as printing, publishing, and photography by developing and providing high value-added products.
In the information society, we are witnessing a rapid shift to a structure that does not require paper media throughdigitization. Amidst these drastic changes in the management environment, we entered into a capital and businessalliance agreement with Oji Holdings Corporation with the aim of achieving sustainable growth and increasing thecorporate value of the Mitsubishi Paper Mills Group and, in March 2019, we became an equity method affiliate of Oji
Holdings.
Presently, the Mitsubishi Paper Mills Group has upheld and is vigorously engaging in 3 key strategies as part of its New
Mid-Term Management Plan (April 2019 to March 2022) whose basic principle is “Strengthening and diversifying thebusiness base for a new stage.”In fiscal 2021, as part of our first key strategy “Establish a robust management base through the alliance with the Oji
Group,” we integrated the production systems for carbonless paper and determined the transfer of the pressboard
business. As part of our second key strategy “Make structural reforms and enrich existing businesses,” the control of theprinting photosensitive material tasks was transferred to a subsidiary and the subsidiaries for the inkjet business were
integrated. Finally, as part of our third key strategy “Diversify the business base by fostering new profit pillars,” in addition
to the household and consumer paper business and biomass power generation business, which are operated incooperation with the Oji Group, we set up equipment for manufacturing melt-blown non-woven fabric, determined the
addition of wet non-woven fabric papermaking machine to respond to the healthy demand for base materials for water
treatment membrane and the production increase for battery separators, manufactured and sold special-purpose
release/casting paper, promoted sales of barricote® and barrisherpa®, which contribute to the reduction of plastics andstarted the sale of water-repellent, oil-proof paperboard. Additionally, while coping with the spread of the novel
coronavirus with anti-virus functional filters and alcohol disinfectants, we earnestly engaged in the transformation of ourbusiness portfolio and sowed the seeds towards its next pillar, such as films with added functionality for the electronics
field and medical-related products.
Going forward, we will proceed with strengthening and diversifying our business base, and while aiming to further
develop the Mitsubishi Paper Mills Group, we will improve corporate value and contribute to society.
We hope for your continued support and encouragement in the future.

A corporate groupthat is always
on the leading edgeof technology

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.

Contribution to SDGs
Through the trust and empathy of all our stakeholders, the Mitsubishi Paper Mills Group is aiming to increase its
corporate value and contribute to the solutions to social issues, and is conducting unique activities for various challenges
by utilizing the Group’s business domains and management resources.
In recent years, there have been demands to apply the sustainable development goals (SDGs) to management incorporate activities. We were one of the first to produce and sell FSC®-certified paper, which contributes to the attainmentof SDGs. Furthermore, we are also marketing packaging paper for a variety of food products as well as paper straws inorder to reduce or eliminate plastic usage. Additionally, we established the “Mitsubishi Paper Mills Group Environment
Vision 2050” in March 2021 in order to contribute to the realization of a decarbonized or carbon-neutral society. We willcontinue to make efforts to realize a sustainable society through our businesses.
In fiscal 2020, we worked on “Enhancing activities to ensure safety and health” and “Product development centered on
harmony with society” as the two top priority issues. For fiscal 2021, considering the Mitsubishi Paper Mills Group’sbusiness environment, conditions and performance evaluation results of the previous fiscal year, we have established“Product development centered on harmony with society,” “Enhancing activities to ensure safety and health” and“Ensuring product quality” as the three top priority issues. “Product development centered on harmony with society” isbased on the idea of the SDGs, and aligns with “Diversifying the business base by fostering new profit pillars,” which isone of the key strategies of the current New Mid-Term Management Plan. We will continue to work to develop new
products that will pave the way to realizing a sustainable society. At the same time, with a renewed appreciation of the factthat “Enhancing activities to ensure safety and health” and “Ensuring product quality” undergird the Group’s business, wego back to our corporate philosophy and step up our efforts.

FSC® C021528

4

Management Policies
New Mid-Term Management Plan (FY2020 - FY2022)■ Restructuring and enhancing existing businesses

Since April 2019, with “Strengthening and diversifying the business base for a new stage” as our basic principle, wehave been taking initiatives under a New Mid-Term Management Plan, which aims to achieve sound and sustainablegrowth and maximize corporate value over the medium- to long-term. There was a sudden change in the businessenvironment in the second year, that is fiscal 2020, due to the spread of the novel coronavirus, and it significantly
impacted our businesses in the printing and communication paper field and the imaging field. In a New Mid-Term
Management Plan, the following three key strategies are established:(1) Establish a robust management base through the alliance with the Oji Group;(2) Make structural reforms and enrich existing business; and(3) Diversify the business base by fostering new profit pillars.
We are aiming for a shift away from the conventional business structure based on printing and communication paper
and the strengthening and diversification of our business foundation. We believe there is a need to further accelerate thischange.

Status of initiatives for priority strategies■ Establish a robust management base through the alliance with the Oji Group◇ Centralization of the Carbonless Paper Business

In November 2019, it was agreed to transfer the carbonless paper production and sales business of Oji
Imaging Media Co., Ltd. to Mitsubishi Paper Mills, and the business was officially transferred in July 2020 after
adjustment of the sales network. We will expand market share and improve profitability through enhanced
productivity. We will aim for at least a 35% share of the domestic market going forward.

◇ Transfer of the Pressboard BusinessIn August 2020, we integrated our production systems for electrical insulation paper pressboard in Oji F-Tex
Co., Ltd. and determined the transfer of the right of business (excluding the heat insulated pressboard business)to it. By integrating production systems in the Nakatsu factory of Oji F-Tex, which is superior in production
capacity, we will increase earnings (scheduled to be implemented in October 2021).

◇ Household and Consumer Paper Joint Venture

MPM Oji Home Products Co., Ltd., which engages in the household and consumer paper business, begancommercial operation in April 2019. Amid robust demand for household and consumer paper, MPM Oji Home
Products is using the Tohoku region where the brand is already established as a foundation to expand into Tokyoand other areas of the Kanto region. In fiscal 2021, we enhanced our product lineup by releasing twice volume
toilet paper, kitchen towels, hand towels, an alcohol-free version of anti-bacterial wet wipes in addition to thealcohol-added version.

◇ Merger of Group Companies(Reorganization of the Printing Photosensitive Material Business)

In June 2020, Diamic Co., Ltd. (surviving company) and Pictorico Co., Ltd. were integrated and the printing
photosensitive material business of Mitsubishi Paper Mills was transferred to Diamic Co., Ltd. Overlapping andcommon operations will be optimized for the printing photosensitive material business and efforts will be madetoward comprehensive business stability based on the maintenance of domestic business and businessexpansion in the Asian region. In the inkjet business, we will enhance the Pictorico brand, which was cultivated in
the high-quality photography paper and photography output business aimed at professionals and advanced
amateurs, and mutually cooperate in the fields of proofs, plate making and posters, thus expanding overall sales.

◇ Reorganization of the Research and Development Base

In January 2020, we established the Research and Development Division, which oversees all the R&D
divisions that had previously been under the umbrella of the business departments, creating an environment inwhich we can flexibly develop new products, provide technical support, and optimize human resources across all
businesses. Under this system, we achieved results by formulating key research themes based on management
challenges and by optimizing the allocation of research resources. Additionally, we are also focusing on thecreation of future-oriented research themes.
Further, in order to accelerate development and ensure contribution to earnings, we reformed thedevelopment implementation system and closed the Tsukuba R&D Laboratory, which was located far away fromthe manufacturing site, and established the Takasago R&D Laboratory inside the Takasago Mill, which is related
to major research themes. We also transferred some of the research themes related to the Kyoto Mill to the
Kyoto R&D Laboratory. At the same time, analysis operations, which existed in both Tsukuba and Kyoto, will be
integrated into the Kyoto R&D Laboratory and strategically operated as an organization under the direct controlof the Research and Development Division.

■ Diversify the business base by fostering new profit pillars◇ Expand in Non-woven Fabric Growth Sectors

At the Takasago Mill, we will install new melt-blown non-woven fabric manufacturing equipment and add more
wet non-woven fabric papermaking machines. In the field of speciality materials, we will develop
high-performance functional filter materials and aim to expand its business, while taking steps to expand
businesses with healthy demand, such as the businesses of water treatment membrane support substrates andbattery separators.
We also relocated our filter business base from Yashio City, Saitama Prefecture to the Takasago Mill andtransferred our R&D functions to the newly established Takasago R&D Laboratory in the same mill. The
Takasago site was established as the base for comprehensive development and production of the Speciality
Materials Business, and we continue to expand this business.

◇ Environmentally Friendly Products

Anti-bacterial wet wipes（Alcoholic type）

We are enhancing the lineup of environment-friendly products. In addition to barricote ® and barrisherpa®,
which are the plasticless packaging papers with high biodegradability and recyclability released in May 2020, welaunched water-repellent, oil-proof paperboard with greatly improved water and oil resistance and anti-bacterial
kraft paper with anti-bacterial properties.

◇ Special-purpose Release/Casting Paper

Twice volume toilet paper

Kitchen towel

At Kitakami HiTec Paper Corporation, manufacturing equipment for special-purpose release/casting paper,
which has been remodeled from existing equipment, has begun operation and new businesses other than thephotographic base paper business have started.

Hand towel(Above: Pillow type)(Below: Box type)◇ Electronic Industrial Materials
Anti-bacterial wet wipes(Non-alcoholic type)5

FSC® C021528

With the full-scale operation of the new coater at the Kyoto Mill, we are expanding the profitability of functionalfilms, such as photosensitive resists for electronic industrial materials.

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

Fiscal Year

2017

2019

2020

2021

201,955

201,492

203,997

194,575

162,325

Operating Income

4,313

1,790

△40

1,976

△1,770Ordinary Income

2,703

652

△914

2,696

△636

Profit Attributable to Owners of Parent

1,152

3,198

351

801

△2,532

Capital Investment

5,995

7,438

12,481

5,524

6,422

Cash flow situation (millions of yen):
Cash Flows from Operating Activities

19,83912,80919,066

9,976

13,014

Cash Flows from Investing Activities△7,070△5,994△8,979△6,571△2,098Financial Position (100 millions of yen):
Total Assets

2,349

2,374

2,328

2,122

2,094

Outstanding Interest-bearing Debt

1,257

1,193

1,046

1,019

979

544

597

664

605

629

Equity Capital

201,955

200,000

33.72

93.57

10.04

17.96

△56.72

Book Value per Share (BPS)

1,591.00

1,747.54

1,485.64

1,355.27

1,408.45

Management Indicators:

△0.0

1.0

△1.1

30

32

35

33

29

23.2

25.2

28.5

28.5

30.0

※2

2.2

5.6

0.6

1.3

△4.1

Debt-Equity Ratio (D/E Ratio)

2.3

2.0

1.6

1.7

1.6

14,76812,264

10,076

11,801

7,261

Overseas Sales Ratio (%)
Equity Ratio (%)
Return on Equity (ROE) (%)※3

EBITDA (millions of yen)Non-financial information：
Number of employees※4 (persons)

3,734

3,723

3,668

3,676

Number of intellectual property rights (cases)

1,639

1,655

1,691

1,588

94

96

96

95

95

Greenhouse Gas Emissions (1,000 tons)

1,065

1,095

1,037

958

897

Greenhouse Gas Emissions Emission
Intensity (tons / product tons)

1.155

1.160

1.155

1.185

1.423

Industrial Waste Effective Utilization Ratio※5(％)

※1

7

※2
※3
※4
※5
※6

3,579
※6

1,521

As of October 1, 2016, we conducted a reverse stock split at a ratio of 1 share for every 10 shares of common stock. The calculation is basedon the assumption that the reverse stock split was carried out at the beginning of FY2017.
Return on equity (ROE) = Profit attributable to owners of parent/(net assets - non-controlling interest)
Debt-to-equity ratio (D / E ratio) = Interest-bearing debt / equity capital
The number of employees is working personnel and does not include the number of temporary employees.
Effective utilization rate of industrial waste = (amount generated-final disposal amount) / amount generated
In the continuous maintenance of intellectual property, we have been intensively taking inventory of patents since 2019. As a result, the numberof holdings has decreased.

1,976

1,790

2,000
1,000

100,000△40

0

50,0002017

2018△1,770

2019

2021
（FY）

2020

△1,000△2,000

0

2017

2018

2019

2020

2021
（FY）

△3,000

Outstanding Interest-bearing Debt and D/E Ratio
Outstanding Interest-bearing Debt
（100 millions of yen）
2,000

D/E Ratio
3.0
2.8

Equity Capital（100 millions of yen）
700

1,193

2.4

2.3

1,000

1,046

●

1,019

979

2.2
2.0

2.0

Equity Capital & ROE
ROE（%）
7.0

5.6

664

●

650

5.0
629

2.2

2.6

1,500

●

600

●

544

550

●

0

2017

2018

●

1.6

2019

Outstanding Interest-bearing Debt

2020
●

1.6

2021
（FY）
D/E Ratio

Number of intellectual property rights（cases）

1.6
1.4

●

0.6

1.3

1.0
-1.0
-3.0

500

●

400

1,655

1,691

1,588 ※6

1,500

2018

2019

Equity Capital

2020
●

ROE

1,521

1,000

●

1,200

2018

2019

2020

2021
（FY）

800

1.500

1.423

1.155

1,065

●

1.160

●

1.155

1.200

●

1.185
0.900

1,095
1,037

0.600
958
897

900

2017

-9.0

Emission Intensity（tons/product tons）

Emissions（1,000 tons）

1,000

500

2021
（FY）

Greenhouse Gas Emissions and Emissions Intensity

1,100

0

2017

●

1,639

-5.0
-7.0

1,300

2,000

-4.1

450

1,400

2,500

3.0

605

597

1.8
1.7

●

0.9

3,000

194,575500

2.1

Operating Income Margin (%)

203,997

150,000●

Earnings per Share (EPS)

201,492

162,325※1

Operating Income

4,000

1,257

Per Share Information (yen):（millions of yen）
5,000
4,313

Net Sales

250,000

Profit and loss situation (millions of yen):
Net Sales

2018（millions of yen）
300,000

2017

2018

2019

Emissions

●

2020

2021
（FY）
Emission Intensity

0.300

0.000

8

Special Feature: Business development from a long-term perspective
Next-generation products that will transform the business portfolio
In order to shift away from the conventional business structure of printing and communication paper, we aredeveloping businesses from a long-term perspective and aiming to diversify the business base by fostering new profit
pillars. In this special feature, we will introduce major next-generation products that will transform our business portfolio in
the fields of high-performance products, home and healthcare products, and packaging-related products.

Highly functional products■ Dry Film Resist■ Battery separator
The battery separator is one of the important components that make up a battery, and it is necessary to ensure ionic
conductivity while separating the positive and negative electrodes of the battery. For this reason, it is required to have aporous structure in which fine pores are evenly distributed in the separator, and our ultra-thin non-woven fabricmanufacturing technology using fine fibers is utilized there.

Charging
current

Negative
electrode

Discharge
current

Positive
electrode

Li IonPositive
electrode

At present, battery separators are produced by one wet non-woven fabric papermaking machine at the Takasago Mill.
However, in addition to battery separators, this papermaking machine produces water treatment membrane support
substrates such as reverse osmosis membranes (RO membranes), and an insufficiency of production capacity due toincreased demand in each business has become an issue.
In order to increase the production output of battery separators, we started to increase the wet non-woven fabricpapermaking machine at the Takasago Mill. By specializing in the production of thin wet non-woven fabrics such asbattery separators that require more thinness and higher precision, this new manufacturing equipment will improve
productivity and stabilize quality in each product group and will be able to respond to future demand growth.

Among our separator products, the product supply forhigh-capacity capacitor applications has increased
significantly, particularly in Japan, China, and South Korea.
Especially, the global spread of COVID-19 has boosted
demand for network infrastructure, including that for
telecommuting, and has increased demand for renewableenergy-related facilities along with the electrification of
automobiles. Demand for EDLC and solid capacitors,
which use our separators, is also growing, and this trend is
expected to continue.

The development of information and communication technologies, such as 5G and IoT, and the accompanying
evolution of display devices as well as the trend toward electrification and automation in the automobile industry are
expected to lead to an increase in the number and functionality of various electronic devices. In such an environment, inorder to improve the functionality of component materials, it is necessary to develop processes with a high degree of
manufacturing difficulty, such as miniaturization, complexity, and thinning of components, along with high heat dissipationand high heat resistance required for automotive components, as well as resist materials used in such processes.
Our photosensitive resist film is suitable for manufacturing and processing applications of high-performance materials
such as special grades specialized for microblasting (fine sandblasting) applications and highly chemical resistant gradessuitable for difficult-to-etch metals and glass processing applications. We will continue to promote product development
and sales expansion that meet the needs of our customers.

Separator

Structure of the lithium-ion battery

Dry film resist roll

■ Special-purpose Release/Casting Paper

Photo of capacitor disassembly (the yellow sheet is a separator.)

Examples of products that include capacitors (such as servers)(This image is unrelated to the actual projects in which our products
were adopted.)

9

We have started the production of special-purpose release/casting paper for industrial materials by utilizing quality
control, advanced technology and production equipment cultivated during the production of photographic base paper.
We have developed base paper for synthetic leather as release/casting paper, utilizing technology and equipment toachieve high levels of flatness and a uniform surface quality required in photographic base paper.
In addition, the Mitsubishi Paper Mills Group is proactively promoting the launch of new product groups by remodelingexisting equipment to produce release/casting paper, utilizing the laminating technology along with technology andequipment that can achieve a fine coated layer.

10Special Feature: Business development from a long-term perspective
Home and Healthcare Products■ Melt blow dry non-woven fabric, non-woven fabric mask
We have newly established a manufacturing facility for non-woven fabric masks and melt blow dry non-woven fabrics,
which are the materials for them, at the Takasago Mill. This project has been adopted by the Ministry of Economy, Tradeand Industry as a "domestic investment promotion project cost subsidy project for supply chain measures". The
non-woven fabric mask manufacturing equipment began commercial operation in January 2021, and the melt-blow dry
non-woven fabric manufacturing equipment began commercial operation in June 2021.

■ Air filter (anti-virus functional filter, total heat exchange element)
Mitsubishi Paper Mills produces and sells air filters with diverse functions, such as deodorizing, dust collecting,anti-bacterial, anti-viral, anti-allergen, humidifying (transpiration) and total heat exchanging properties. Since thecoronavirus outbreak, especially, sales of filters with anti-virus functionality and energy recovery ventilator cores haveincreased.

Antiviral functional filter

Melt-blown equipment

The melt-blown dry non-woven fabric is a dry non-woven fabric with intertwined fine fibers that combine high collection
efficiency and low-pressure loss and is a key material that gives non-woven masks high collectivity for fine contaminants
such as viruses and pollen.
We believe that the establishment of a new melt blow dry non-woven fabric manufacturing facility is an importantmeasure that will provide a foothold for our company, which has focused on wet non-woven fabrics, to enter the dry
non-woven fabric field. We will start by supplying melt-blown dry non-woven fabrics for masks, but by combining themwith our wet non-woven fabric technology, we will increase added value and expand into the fields of liquid and gas filtersand new applications other than filters.

As for mask manufacturing equipment, we started
operation of melt-blown dry non-woven fabric manufacturing
equipment, and in January 2021,we launcheda high-performance
non-woven fabric mask while procuring raw materials
and manufacturing the products all in Japan. The “Mitsubishi
Paper Mills Rakuten Ichiba Store” was newly opened in
March 2021, making it available to individual customers.
Furthermore, we are developing highly functional non-woven
fabric masks using functional filter materials, such as“Allersweep®,” which has been developed in the air filter
field, with the effect of controlling harmful substances
through plant-based components.

With widespread awareness of the importance of air purification and ventilation to create safe and comfortable spaces,
global demand for air purifiers and total enthalpy heat exchangers has grown significantly over the past year. This trend
is likely to continue. In order to meet such global demand, we are required to enhance the lineup of antiviral functional
filters and total heat exchange elements, and to achieve both energy saving and safety / comfort through more vigorous
new product development. We will contribute to the realization of a safe and comfortable space for the post-corona
society.

Enthalpy exchanger core
Paper element (right) and polymer element (left)

High-performance non-woven fabric mask

1112

Special Feature: Business development from a long-term perspective
Packaging-related Products■ Coated paper for packaging with barrier properties and heat seal suitability
barricote®・barrisherpa®
®

Mono material

Full recycling

Biodegradable

High barrier®

Heat seal“barricote®” is an alternative material that can contribute to the reduction of waste plastics, as measures against
marine plastic waste and global warming are strongly desired due to the consumption of plastics for containers andpackaging, which is rapidly increasing worldwide.

Main features●Sustainable wrapping coated paper that responds to the realization of a carbon-neutral society and the reduction ofmarine plastic waste.
●A mono material product that has the original excellent biodegradability and full recyclability of paper materials.

●It has excellent barrier function and heat sealing properties, and covers a wide range of needs in the flexible packaging
market.
●FSC®-certified bleached kraft paper is used as the base material.

Paper+
plastic
film
combination

Contributes
to plastic
reduction

Biodegradability

barrisherpa® is a laminated hybrid product of barricote® and plastic film. While maintaining the heat sealability andstrength of plastic film, it contributes to reducing the amount of plastic use, and can also be combined with plant-derived,
biodegradable plastic film. For the logo design, we created a design based on the concept of a tree growing in the
sunlight.

Main features●A brand that combines barricote® and plastic film to meet high quality requirements.
●Contributes to the reduction of plastic while using the minimum amount of plastic film with excellent strength, water
resistance and heat seal suitability.

●Achieves excellent barrier function without impairing total biodegradability by combining with biodegradable plastic.
●Bio-PBS/PBSA (manufactured by Mitsubishi Chemical Corporation) can be used as bio- and biodegradable plastics.

●Developed at a domestic factory for the domestic market based on the usage record of the EU market where paper

Plastic laminate

packaging is ahead.
●A lineup of optimal grades and thicknesses for various packaging formats for primary/secondary packaging, including
food and daily hygiene products.

Various plastic
packaging materials

Features for primary packaging

Water-based coating layer

・Water vapor/Oxygen/Food oils and fats/Flavor barrier property

Water-based coating layer
Paper base material・Heat seal suitability/Compliance with the Food Sanitation Act

Features for secondary packaging

Disintegration test (up to 10 weeks)・Heat seal suitability (no barrier property)

Barrier performance/Seal strength

0.1

Aluminum foil
10.0

For primary packaging
Aluminum or inorganic
vapor deposited film

1
10

For secondary
packaging
Nylon

100

1,000
10,000Barrier plastic film
(EVOH, etc.)

Paper
1,000

Non-barrier plastic film
100

PE

PP

10

1

Water vapor (g/m2/day)

0.1

good

For primary packaging J-HS-WGOM
For secondary packaging J-HS-G

8.0

barricote®

6.0
4.0

barricote

®

2.0
0.0
80

90

100

110

120

Temperature（℃）※The values shown are measured by us and are not guaranteed values.

FSC® C021528
13

starting point

barricote®

Heat seal strength (N/15 mm)

Oxygen (cc/m2/day/atm)

good

Photo

※The values shown are measured by us and are not guaranteed values.

Test conditions: Compost/Culture soil = 50/50, Temperature 60°C
Test cooperation: Mitsubishi Chemical Corporation

100

Degree of decomposition (%)

Paper base material

80

60

40

20

0

0

2

4

6

8

10

12

Elapsed time (weeks)14Overview of Business Segments
Printing Paper BusinessBusiness Results

In the domestic market, although the product price level wasmaintained, the demand declined significantly mainly in the firsthalf due to the impact of the Corona disaster, and both thesales volume and the amount decreased. Regarding exports,
both sales volume and amount decreased. Under thesecircumstances, we have continued to reduce production inorder to tighten supply and demand, and have been working toestablish a production system in anticipation of future declines
in demand.
As for our European subsidiaries, the supply-demand
relationship for each main product deteriorated due to COVID-19,
and sales revenue decreased following a decline in sales
volume, lower prices, and impact of exchange rates.
As a result, net sales for all paper and pulp businesses was¥125,340 million, down 14.4 ％ year over year. Operating
income decreased ¥2,440 million from ¥1,140 million in theprevious fiscal year to a loss of ¥1,299 million. Although there
were effects of lower raw material and fuel prices and cost
reductions, they were not enough to offset the negative impactof the decrease in production and sales volume.

Trends in operating income of the paper
and pulp business（Million yen）

Product introduction■ Printing Paper■ Communication Paper

2,500
2,000

2,022

1,500

1,140

1,000
500
0

98
2017

2019

2021
2020

2018

（FY）

△500

Used for copy paper, copy slips, receipts, etc.

△1,000△1,500Used for catalogs, books, copy paper, copy slips, etc.
△1,427△1,299■ Household and Consumer Paper■ Heat-resistant Pressboard

Business Strategies

Under the three key strategies of the “New Mid-Term Management Plan” (April 2019 to March 2022), which is now in
its second year, we are working to “strengthening and diversifying the business base for a new stage.”(1) Establish a robust management base through the alliance with the Oji GroupWe are promoting shared inter-regional OEM with the Oji Group and reducing logistics expenses, including mutual use
of warehouses and distribution. Also, we are implementing shared OEM in printing and communication paper, joint
storage at warehouses in consumption areas, and transportation of products by Oji Logistics dedicated ships.
(2) Make structural reforms and enrich existing businessWe will optimize the production system according to demand trends, organize production brands and optimize
inventories, and maintain prices.
(3) Diversify the business base by fostering new profit pillars
We are working to shift its product portfolio by expanding sales of bleached kraft paper and functional paperboard, andexpanding the lineup of barrier coated paper, which contributes to the elimination of plastics.

It has a reputation as a household paper with a high-class texture.

■ barricote® and barrisherpa®

Used as an insulator for transformers.

■ Bleached Kraft Paper

Business Topics《Launch of water-repellent and oil-resistant paperboard》

As we are transforming our product portfolio, we have launched water- andoil-resistant paperboard as a new product in the packaging field, which will
increase the product ratio in the future.
This paperboard has a special aqueous coating that gives it the ability towithstand take-away containers without plastic film, which used to be laminatedwith plastic film. This material has begun to be used in various take-away
containers as a material that can contribute to the reduction of plastic.

15

Barrier paper that can contribute to reducing the amount ofplastic used

Used for paper bags, shopping bags, etc.

16Overview of Business Segments
Imaging Media BusinessBusiness Results

Demand for photographic photosensitive materials and inkjet
paper, mainly for image output, was sluggish in both domestic andoverseas markets due to the effects of refraining from traveling andevents due to the Corona disaster, and the sales amount decreased.
As a result, total net sales for the Imaging Media Business were¥25,182 million, a 25.1% decrease year-over-year. Operating loss
increased ¥1,798 million from ¥330 million in the previous fiscal
year to ¥2,128 million. Negative factors such as a decline in sales
volume and higher costs due to lower utilization rates of production
facilities were significant, which were not offset by efforts to expand
new inkjet paper products for business use, sales of alcohol
sterilizing solution and other infection prevention products, andreduction of fixed costs.

（Million yen） 948
1,000

0

Imaging Media Business
Operating Income
449

500

2018

■ Inkjet paper related

・Mitsubishi Grace Color Paper MG-1000
・Color paper processing chemicals●Highly weatherproof inkjet synthetic paper●Inkjet paper for sublimation transfer
2021

2019

△500

■ Photography related●Antibacterial and antiviral inkjet paper

537

2020
2017

Product introduction

（FY）
△330

△1,000△1,500△2,000△2,500△2,128Business Strategies

The Imaging Media Business is working on the following initiatives as strategies under the New Mid-Term Management Plan.
As a restructuring of the existing business, the business of the print sensitive material business was transferred to thesubsidiary Diamic Co., Ltd., and in the inkjet business, Diamic Co., Ltd. and Pictorico Co., Ltd. were merged in order to improvebusiness efficiency and strengthen the sales system.
While strengthening our business foundation by reorganizing our production system in Japan and overseas and improving theefficiency of our sales system, we will aggressively expand into overseas markets to enhance sales of existing products that are
maturing. We are expanding new products for inkjet paper, and we are working to expand sales by launching antibacterial andantiviral inkjet paper.
In printing-related products, we will work to expand our business to the Asian region, where corrugated board and package
printing are growing rapidly, centered on chemical-free thermal plate-making films, and secure the profitability of our existing
businesses.
In new businesses, the Kyoto Mill’s No. 10 coater is now in full operation, and we are working to expand the profitability offunctional films for the electronics field, such as photosensitive resists for electronic industrial materials, and to develop andlaunch new products. Kitakami HiTec Paper Corporation commenced the commercial operation of a new facility for the
manufacture of special-purpose release/casting paper and other products, which was converted from existing facilities, and a
new business other than photographic base paper was launched. We are also making efforts to cultivate new customers for
digital transfer inkjet paper in various textile fields ranging from fast fashion which is suited to inkjet printing. In the medical andhealthcare fields, we will develop new products and expand sales, and take other measures to expand our business in growing
fields and establish various new businesses.

Antibacterial and antiviral inkjet paper■ Printing related■ Resin coat base paper related●Resin coat base paper●CTF (Computer to Film)

・T-GAF completely chemical-free thermal-sensitive film

・For photographic paper

・Thermal DigiPlates (TDP)・For sublimation
thermal transferpaper・For inkjet paper●CTP (Computer to Plate)printing plate systems

Completely chemical-free thermal
printing plate● Speciality paper

・Silver DigiPlates (SDP)

Liquid-saving processor system● CTP printing plates for newspaper
printing

T-GAF

・PD-News RECTA Ver.2

・Processing basepaper(release/casting
paper)

Partition

・Stacked board (Sheet pallet/ partition)

Completely chemical-free●Digital screen mask
make systems

・MDS-360(Mitsubishi on Demand Silkscreen)Emulsion application, no washing required

MDS-360■ New Businesses

Business Topics《Bank Paper Takasago Premium exclusive for fountain pens launched》

The "Three Diamond" watermarked bank paper made for bank books in 1960 is used by many fountain pen
enthusiasts because of its writing characteristics.
In response to the demand for the ultimate fountain pen
characteristics, we have developed and launched “Bank Paper
Takasago Premium” for fountain pen paper, based on users’
feedback. You can enjoy the silky touch and the wonderful color andshade expression of the ink.
We were also interviewed by the staff of Shumi No Bungu Bako, ahigh-end stationery magazine, and were featured in the January
2021 issue, vol.56.

17●Electronic industrial materials

・Photosensitive resists
・Resin etching system

Pureleaf（Sterilization liquid）

・Silver nanoparticle ink● Medical/healthcare

・Diamour, a cryopreservation device for
fertilized eggs
・Pureleaf (sterilization solution)

Glass art created using
photosensitive resist

・My Dome, a cover that warms,
moisturizes, and provides restful sleep

Pollen●Digital signage

Dust

・SaiVis (projection screen films)● Textile digital printing

・Digital transfer inkjet paper

My Dome

Digital transfer inkjet paper

18Overview of Business Segments
Speciality Materials BusinessBusiness Results

In the area of speciality materials, sales revenue increased as
the decrease in sales volume of rewritable media and non-woven
fabrics for construction materials was offset by the increase insales of water treatment membrane support substrates, battery
separators and air filters.
The sales amount of chemical paper decreased due to thelarge impact of corona damage on construction purposes, etc.,
and the quantity of mainstay decorative board base paper andbacking paper for wallpaper fell.
As a result, total net sales for the Speciality Materials Businessdecreased 6.4% year-over-year to ¥15,144 million. Operating
income increased by ¥553 million year-over-year to ¥1,506
million thanks to the effect of cost reduction and lower raw
material and fuel prices as well as sales increase in water
treatment membrane support substrates, battery separators, etc.

Product introduction

Speciality Materials Business
Operating Income（Million yen）

■ Battery separator

2,000■ Water Treatment Membrane Support
Substrate(Photo: Element with built-in support substrate)

1,800
1,506

1,600
1,400
1,200
1,000

970

953

952

800

653

600
400
200
0

Business Strategies

2017

2018

2019

2020

2021
（FY）

In the Speciality Materials Business, we continue to focus on increasing new users for water treatment membrane
support substrates and expanding sales of membrane bioreactor (MBR) membrane support substrates, battery
separators, decorative laminate base paper, and tape base paper.
For water treatment membrane supports, we are expanding our sales channels by capturing increasing demand in
Asia and Europe, mainly in China. Demand for battery separators for capacitors, condensers and lithium-ion batteries isincreasing, and we plan to start commercial operation of a new non-woven fabric manufacturing facility in April 2022.
As for air filters, the demand for air purification and ventilation is increasing due to the corona virus, and sales for air
purifiers and total heat exchange ventilation fans are increasing. Regarding total heat exchange, in addition to expanding
the current product lineup of paper devices, we are developing polymer devices, which are the mainstream in Europe
and the United States and show signs of growing demand in China, with the aim of expanding sales channels globally.
In chemical paper, we are developing products and cultivating markets with the aim of creating high value-added
products that match market requirements. We aim to expand sales of new products such as tape base paper, for which
demand is growing in Japan and overseas, Heat & Fire Resistant Bio-soluble Ceramic Fiber Sheet, and carbon nanotube
dispersions.
In addition to the above, we are aiming to strengthen our business foundation and expand our business portfolio by
continuously expanding into new fields, such as by introducing production equipment for non-woven fabric masks andmelt blow dry non-woven fabrics that are the materials for them at the Takasago Mill.

It has high heat resistance and contributes to improving
the safety of batteries.

■ Enthalpy exchanger core
(Polymer type: developed product)

It has excellent total heat exchange efficiency, gas barrier properties,
condensation resistance, and water resistance.

■ Sterilized paper

It is used as a support for water treatment membranes andcontributes to the supply of safe water.

■ Thermal Rewrite Cards

Rewrite

It is a resource-saving and economical information recording mediumthat can be reused by repeatedly rewriting the display.

■ Paper straws

Business Topics《Super heat-resistant glass fiber non-woven fabric》
We have developed a super heat-resistant glass fiber non-woven
fabric with non-flammability and heat resistance that could not berealized with conventional wet non-woven fabrics. It can withstandthe conditions of 750 ° C for 20 minutes in a heating furnace, and will
not be punctured by a flame of 1000 ° C. Consideration is being given
to using it for building materials that can obtain non-combustible
certification by itself and for non-combustible sheets that prevent the
spread of fire when a lithium-ion battery for electric vehicles (EV)ignites.

19

We use FSC®-certified paper, which is friendly to the environment
and local communities.

Base paper for sterilization packaging that ensures the safety of
medical devices.

FSC® C021528
20

Research and Development
In line with our “Mitsubishi Paper Mills for High Grade and Information Media” philosophy, Mitsubishi Paper Mills
develops and manufactures products in a wide variety of fields that include not only printing and communication paper
but also imaging-related materials and speciality materials. At each of our R&D laboratories, along with researching ourexisting field of paper and peripheral basic technologies, we are combining the paper technologies we have developed
over the years with silver halide photosensitive material technologies developed in our photo and printing fields todevelop advanced products for our digital society. We are also mobilizing technical capabilities honed through thedevelopment of photosensitive materials, special materials, and other materials to develop new speciality materials(electronic industrial materials and amenities fields).
In January 2020, we established a new Research and Development Division to consolidate our research departments,
and are working to enrich existing businesses and diversify the business base by fostering new profit pillars. In fiscal
2021, we reorganized our R&D laboratories to further streamline development.
Building a sustainable society is the most important goal for the papermaking industry, whose business base relies onan abundance of forest resources. Combining concern for the environment and dedication to enriching cultural life is thestarting point of all our product development efforts.

Organization of
Research andDevelopment Division
Research andDevelopment Division

Research and Development Expenses

Intellectual Property Department（ million yen）
1,200

Product Development Department
Takasago R&D Laboratory

1,100

1,000

Kyoto R&D Laboratory
900

Analysis GroupIntellectual Property

800

Intellectual property is an important asset in developing ourbusiness and reinforcing our competitiveness. We submit applications
for patents, utility models, and designs in Japan and overseas, not only
to protect existing products, but also to raise our competitiveness in
new fields. In particular, we are submitting more applications overseas
in areas such as the U.S., Europe, China, South Korea, and Taiwan toback up our cultivation of new markets. We have also been actively
applying for trademarks to improve brand power in our products.

2017

2019

2018

2020

2021
（FY）

Domestic

Overseas

Patent505

289

Utility model right

18

34

Design

7

6

105

77

As of March 31, 2021

TrademarkNumber of rights held

Bases for Product and Technology Development
Product Development Department

The Product Development Department is responsible for thedevelopment of paper products, which are our mainstay products.
In particular, in response to the recent marine plastic issues andother demands for products that contribute to the reduction ofplastic in containers and packaging, we are developing distinctive
packaging and industrial paper using the papermaking and coating
technologies we have cultivated in printing and communication
paper. We have commercialized “barricote®,” a barrier paper withexcellent oxygen and water vapor barrier properties,“water-repellent,
oil-proof paperboard” with superior water and oil resistancecompared to conventional paperboard, and “anti-bacterial kraft
paper” with antibacterial properties.
We will continue to develop unique paper products in the future.

21

Viable bacteria status after 24 hours of incubation

Takasago R&D Laboratory

Takasago R&D Laboratory, inaugurated on June 21,
2021, is developing speciality materials such as support
substrates for various separation membranes, separatorsfor secondary batteries and capacitors, paper products as
substitutes for plastic containers and packaging, andnonflammable boards and sheets, based on the
manufacturing technologies for non-woven fabrics andpaper that we have developed over the years.
We plan to establish an integrated development system,
including labs and actual devices.
Takasago R&D Laboratory

Kyoto R&D Laboratory

Using core technologies consisting of the Group’ s
extensive photosensitive resin, inkjet media, and silver
halide photography technologies, this laboratory isdeveloping and commercializing a range of products
including various resist films, which enjoy unique properties
in the electronics industry; micro-structure fabrication
systems, which involve wet processing of difficult-to-processinsulating materials to support 5G; and antibacterial inkjet
media and a variety of sterilization solutions to meet theneeds amid the COVID-19 pandemic.
In the new field of medical and health care, we are also
working on the development of new device systems forcryopreservation of fertilized embryos for fertility treatment.

Cryopreservation device system for embryo (enclosed type)

Analysis GroupIn order to develop new products and improve the qualityof existing products, it is essential to have advanced
analytical technologies to support them.
The Analysis Group of the Research & Development
Division, which was established in April 2021 as a result oforganizational restructuring within the Research &Development Division, assists the entire Mitsubishi Paper
Mills Group in its research and development and productquality improvement efforts by quickly responding to theconstantly evolving analytical technologies of the world.

Staphylococcus
aureusGas chromatograph time-of-flight mass spectrometer

Coating Flow Analysis Business
Escherichia coli
(E. coli)

General bleachedkraft paper

Anti-bacterial
kraft paper

Evaluation results of the antibacterial propertiesof anti-bacterial kraft paper

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 coupled analysis
techniques and high-speed analysis systems.
With its high level of technical expertise, the company has long been engaged in scientifically analyzing coatings(specifically, application of liquid to base substrates), and has created numerical analysis (computer simulation)technology for optimizing them. Leveraging this technology, we ran droplet prevention simulations on the collapsible
desktop partitions and ventilation simulations of indoor air conditioners as a countermeasure to COVID-19.

22

Initiatives Toward Sustainability
The Way We See Sustainability

The Mitsubishi Paper Mills Group aims to enhance its corporate value by earning the trust and appreciation of all
stakeholders, while contributing to the realization of a sustainable society by providing solutions to various social issues.
To this end, we have positioned CSR activities as one of the important management issues to be addressed in ourbusiness.
We established the Code of Conduct of the Mitsubishi Paper Mills Group as a materialization of this philosophy. Since
then, we have respected the spirit of the code and dedicated ourselves to putting it into practice.
⇨ Reference link: Code of Conduct of the Mitsubishi Paper Mills Grouphttps://www.mpm.co.jp/eng/company/kensyou.html

Organizational Governance

Timely and appropriate information disclosure
・Communication with our customers
・Sharing of environmental data with
suppliers and customers
・Holding explanatory meetings forinvestors
・Enhancement of internal
communications
・Dialogue with the local community
・Issuing integrated reports, etc.
・Provision of information via theInternet

Human Rights
Labor Practices
The Environment
Fair Operating Practices
Consumer Issues

Community Involvement
and Development

ESG/ISO 26000 and Initiatives of MPM Group

The Mitsubishi Paper Mills Group views ISO 26000, an international standard for organizational social responsibility, as
a common indicator for promoting sustainability and promotes activities in each field. In this corporate report, we note thefollowing as activities being done for the “seven core subjects” and “issues” of ISO 26000.
ESG Core subjects
G

Organizational
Governance

Stakeholders
Customers

Human Rights

Suppliers

Shareholders
Employees

Administration organs
Local Communities
NGOs/NPOs

Labor Practices

Sustainability Promotion Structure

To contribute to the realization of a sustainable society and 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 chairedby the president. The CSR Committee oversees all nine areas of the Group’s CSR activities (compliance, risk
management, safety and health, the environment, product safety, product quality, human rights and labor, information,and social contribution).

Technology andEnvironment Department
Director in charge

CSR Director

President

CSR Committee

Supervising office:General Affairs & Corporate
Communications Group

General Affairs &Personnel Department
Director in charge
General Affairs &Personnel Department
Director in charge
Internal Control

Responsible department:
General Affairs & Personnel
Department

Internal Audit Department
Director in charge

23

Product Quality

Responsible department:
Technology and Environmental
Department

Product Safety
Product Liability(PL)Committee

Supervising office:Technology and Environmental
Department

Environment
Environmental Conservation Committee

Supervising office:Technology and Environmental
Department

Social Contribution

Responsible department:
General Affairs and Personnel
Department

Information

Responsible department:
General Affairs and Personnel
Department

Human Rights and Labor

Responsible department:
General Affairs and Personnel
Department

Safety & HealthCompany-wide Safety and Health Committee

Supervising office:General Affairs and Personnel
Department

Risk Management
Risk Management Committee

Supervising office:General Affairs and Personnel
Department

Compliance
Compliance Committee

Supervising office:Legal Department

Asset Protection

Responsible department:
General Affairs and Personnel
Department

Business Effectiveness and Efficiency
Operating Audits

Responsibleoffice:department:
Supervising
General Affairs
Internal Audit Department& Personnel Department

Reliability of Financial Reporting

Responsible department:Internal Audit Department

S

Fair Operating
PracticeIssuesOrganizational Governance

1. Due diligence
2. Human rights risk situations
3. Avoidance of complicity
4. Resolving grievances
5. Discrimination and vulnerable groups
6. Civil and political rights
7. Economic, social, and cultural rights
8. Fundamental principles and rights at work
1. Employment and employment relationships
2. Conditions of work and social protection
3. Social dialogue
4. Health and safety at work
5. Human development and training in the workplace
1. Preventing corruption
2. Responsible political involvement
3. Fair competition
4. Promoting social responsibility in the value chain
5. Respect for property rights
1. Fair marketing, factual and unbiased information,

IssuesCommunity

Involvement
andDevelopment

E

The

Environment

Initiatives Toward Sustainability

Pgs. 23-25

CompliancePg. 31

Promoting Social Responsibility in

Pg. 33

Corporate GovernanceRisk Management

Pgs. 26-32
Pg. 32the Value Chain

Responsible Raw Material Procurement Pgs. 33-34
Relationship with Employees

Pgs. 41-42

Relationship with Communities

Pgs. 45-46

CompliancePg. 31

Risk Management

Pg. 32

Relationship with Employees

Pgs. 41-42

CompliancePg. 31

Fair Operating Practices

Pgs. 33-34

2. Protecting consumers' health and safety
3. Sustainable consumption
4. Consumer service, support, and complaint andSpecial FeaturePgs. 9-14

Fair Operating Practices

Pgs. 33-34

5. Consumer data protection and privacy
6. Access to essential services
7. Education and awareness1. Community involvement
2. Education and culture
3. Employment creation and skills development
4. Technology development and access
5. Wealth and income creation
6. Health
7. Social investment
1. Prevention of pollution
2. Sustainable resource use
3. Climate change mitigation and adaptation
4. Protection of the environment, biodiversity,and fair contractual practices

Consumer

Page mentioned

dispute resolution

Information Disclosure

Pg. 30Relationship with the Environment

Pgs. 35-40

Relationship with Customers

Pgs. 43-44

Preserving Biodiversity

Pg. 37

Relationship with Communities

Pgs. 45-46

Responsible Raw Material Procurement Pgs. 33-34
Relationship with the Environment

Pgs. 35-40

and restoration of natural habitats

24

Initiatives Toward Sustainability
Key Issues (Material Issues) Concerning CSR Activities

With the goal of contributing to the realization of a sustainable society through its business activities, the Mitsubishi
Paper Mills Group has established the following items to satisfy the needs of society.

Process for Defining Issues■ Process 1: Ascertain the circumstances surrounding the Mitsubishi Paper Mills GroupWe analyzed the circumstances surrounding the Mitsubishi Paper Mills Group from environmental, social, andgovernance viewpoints. We then identified issues referencing ISO 26000, GRI, the SDGs and other guidelines, andassessed efforts that are being made with respect to these issues.

■ Process 2: Establish key issues and top priority issues to satisfy the needs of society
We assigned priority to each issue based on how they impact our business and on feedback from stakeholders. We
then extracted key issues that address social needs and from among them established top priority issues based on acomprehensive 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 2021
ESG/ISO 26000 core subjects
G/Organizational GovernanceS / Fair Operating Practices

Key issues (items with an asterisk (◎)represent 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

Ensuring strict legal complianceCorporate Governance
Basic Policies on Corporate Governance

Mitsubishi Paper Mills’ corporate activities are based on its corporate philosophy: 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. Under this philosophy, the Group pursues corporate group management that values CSR,
enhances management transparency, and augments corporate governance, all to achieve the sustainable growth of theGroup and the medium- to long-term improvement of its corporate value. We have established the the Mitsubishi Paper
Mills Limited Basic Policy on Corporate Governance so that we can take concrete steps toward achieving the above, andmake it available on our website.
⇨ Reference link: Corporate Governancehttps://www.mpm.co.jp/eng/company/governance.html

Corporate Governance Framework (as of August 31, 2021)

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 Board of
Directors, speed up decision-making on management, and define responsibilities for business execution.
At special meetings of the Board of Directors which are held as needed in addition to the regular monthly meetings,
decisions are made about and oversight provided concerning matters prescribed in laws, regulations and the Articles ofIncorporation, as well as the execution of significant business. Moreover, in principle, the Management Committee, whichis comprised of main executive officers, is held once a week to deliberate on important matters related to the
management of the Mitsubishi Paper Mills Group and to ensure thorough Group governance and the sharing of Groupstrategies and important information. Our Audit & Supervisory Board, which also includes outside Audit & Supervisory
Board members, holds meetings periodically and as needed.
For business execution, we have adopted a system of business divisions. To strengthen our business execution
structure, we have given these divisions the responsibility for revenue generation and authority to make decisions.
In addition, we have a Nomination and Remuneration Committee that, in the interest of maintaining objectivity andtransparency in matters concerning executive appointment and remuneration, is chaired by an independent outside
director and that acts as an advisory body to the Board of Directors.

Promoting communication with stakeholders

Expanding initiatives out to affiliated Group companies◀

Improving and enlarging our environmentally conscious◎Product development centered on harmony with society
Promoting community support activities

Promoting cultural contribution activities

Promoting activities of the Ecosystem Academy

President and C.E.O.
◀

Cooperation
Internal Audit Department
Audit

Audit

Executive functions◀

Cooperation

Audit
ReportAccounting Auditors ◀
Auditing company ◀

ReportNomination andRemuneration Committee

Sustainability Promotion Structure

12 Executive Officers◀

S / Community Involvement andDevelopment◎Ensuring product quality

Election, Dismissal,
and Oversight

Cooperation

Reducing environmental risk and impact
Ensuring product safety

Board of Directors ◀
6 Internal、2 Outside ◀

Election and Dismissal◀

S / Consumer Issues

Audit

◀

product lineup◀

Promoting activities to preserve biodiversity

Audit & Supervisory Board
1 Internal、3 Outside◀

Promoting activities to prevent global warming◀

performanceElection and Dismissal◀

Election and Dismissal

Promoting various measures to improve human resource◀

E / The Environment

General Meeting of Shareholders◎Enhancing activities to ensure safety and health◀

S / Human Rights/Labor Practices

Business Divisions and Subsidiaries⇨ The action plan for each key issue is shown in the Fiscal 2021 CSR Action Plan on page 48.
25

26

Corporate Governance
Board of Directors and Audit & Supervisory Board Members(as of August 31, 2021)

Directors

Outside Directors■ Somitsu Takehara, Director (Born on April 1, 1952)

Important positions concurrently held at other companies, etc.
Director & Chairman, ZECOO Partners Inc.
Outside Audit & Supervisory Board Member, EDION Corporation (since June 2014)
Outside Director, Genki Sushi Co., Ltd. (since June 2015)
Outside Audit & Supervisory Board Member, TBS Holdings, Inc.
(since June 2020)

Reason for election
Expertise in finance and accounting, extensive knowledge of corporate
management

Board of Directors meeting attendance (FY 2021)
Board of Directors meetings: 15 of 15■ Yoshihiro Kataoka, Director (Born on July 30, 1954)
Representative Director, Chairman

Yoshiaki Takeda
In charge of Accounting
Department

Representative Director,
President & CEO

Yukihiro Tachifuji

In charge of Management
Planning Department,
Research & Development Division,
Energy Business Office andTechnology and Environment
Department

Director, Managing Executive
Officer

Director, Managing Executive
Officer

In charge of Printing Paper
Business
General Manager of Printing
Paper BusinessDirector and President of Mitsubishi
Oji Paper Sales Co., Ltd.

In charge of Functional Materials
Division and Kitakami Business
Division
Assistant manager in charge ofthe business in Germany
General Manager of Functional
Materials DivisionNobuhiro Sato

Shinpei Yamada

Shigeharu Sanada

Director, Senior Corporate Adviser

Kunio Suzuki

In charge of General Affairs &Personnel Department,
Legal Department,
Raw Material Department,Internal Audit Department,
and Shirakawa Site Executive incharge of CSR

Outside Director

Outside Director

Director and Chairman of ZECOO
Partners Inc.
Certified public accountant

Partner Chief of Kataoka &Kobayashi LPC
Attorney-at-law

Soumitsu Takehara

Yoshihiro Kataoka

Audit & Supervisory Board Members

Number of MPM shares held: 0

Career Summary
April 1980 Registered as an attorney-at-law (Tokyo Bar Association)
April 1983 Hosoda and Kataoka Law Office
September 1984 Chief, Yoshihiro Kataoka Law Office
June 1990 Partner Chief, Kataoka & Kobayashi LPC (to present)

Important positions concurrently held at other companies, etc.
Partner Chief, Kataoka & Kobayashi LPC
Visiting Professor, Chuo Law School (since April 2007)
Outside Director, The Higo Bank Ltd. (Audit Committee member)(since June 2021)

Reason for election
Expertise in law and many years of experience in corporate legal affairs

Board of Directors meeting attendance (FY 2021)
Board of Directors meetings: 15 of 15■ Hiroaki Tonooka, Audit & Supervisory Board Member (Born on January 23, 1953) Number of MPM shares held: 0
Important positions concurrently held at other companies, etc.
Career Summary
April 1976 Joined Meiji Life Insurance Company (currently Meiji Yasuda Director, The Kitasato InstituteLife Insurance Company) (hereinafter “MY”)
July 2005 Director, General Manager; Group Market Planning & Research
Department, MY
December 2005 Director, MY
April 2006 Director, Managing Executive Officer, MY
July 2006 Managing Executive Officer, MY
April 2008 Senior Managing Executive Officer, MY
July 2012 Director, Deputy President, MY
April 2016 Director, MY
June 2016 Adviser, MY
July 2016 Director, The Kitasato Institute (to present)
Reason for election
Expertise in finance and accounting, extensive experience in corporate
management

Director, Managing Executive
OfficerNumber of MPM shares held: 0

Career Summary
January 1977 Joined Peat Marwick Mitchell & Co.
December 1981 Joined Coopers & LybrandJuly 2000 General Manger, Transaction Service Division, Chuo Aoyama
April 2005 Representative Director, ZECOO Partners Inc.
November 2017 Director & Chairman, ZECOO Partners Inc. (to present)

Board of Directors and Audit & Supervisory Board meeting attendance(FY 2021)
Board of Directors meetings: 15 of 15,
Audit & Supervisory Board meetings: 15 of 15■ Takeshi Kobayashi, Audit & Supervisory Board Member (Born on April 11, 1955) Number of MPM shares held: 0
Career Summary
April 1979 Joined Japan Development Bank (currently Development
Bank of Japan Inc.) (hereinafter “DBJ”)
June 2009 Executive Officer and General Manager of Human Resources
June 2010 Management Department, DBJ
June 2011 Managing Executive Officer, DBJ
Standing Audit & Supervisory Board Member, DBJ
June 2014 Member of the Board, Managing Executive Director, Japan
Nuclear Fuel Limited (hereinafter “JNFL”)
June 2016 Managing Executive Officer, JNFL
June 2018 Adviser, Research Institute of Capital Formation, DBJ
June 2019 Chairman, DBJ Capital Co., Ltd. (to present)

Important positions concurrently held at other companies, etc.
Outside Corporate Auditor, Takagi Seiko Corporation (since June 2018)
Chairman, DBJ Capital Co., Ltd.
Outside Corporate Auditor, Keisei Electric Railway Co.,Ltd. (since June 2019)

Reason for election
Expertise in finance and accounting, great discernment of corporate
management

Board of Directors and Audit & Supervisory Board meeting attendance(FY 2021)
Board of Directors meetings: 14 of 15
Audit &Supervisory Board meetings: 14 of 15■ Satoshi Takizawa, Audit & Supervisory Board Member (Born on June 21, 1961)

Standing Audit & Supervisory
Board Member

Koichi Nakayama

27

Outside Audit & Supervisory
Board Member

Hiroaki Tonooka
The Kitasato Institute
Director

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

DBJ Capital Co., Ltd.
Chairman

Representative Director andPresident of Mitsubishi UFJ TrustBusiness Co., Ltd.

Takeshi Kobayashi

Satoshi Takizawa

Number of MPM shares held: 0

Career Summary
April 1984 Joined Mitsubishi Trust and Banking Corporation (currently
Mitsubishi UFJ Trust and Banking Corporation) (hereinafter“MUFJ TBC”)
June 2010 Executive Officer and head of Financial Planning Section of
Mitsubishi UFJ Financial Group, Inc. and an Executive Officer
of MUFJ TBC
June 2012 Executive Officer and head of Management Planning Sectionof MUFJ TBC
June 2013 Managing Executive Officer, MUFJ TBC
June 2016 Director, Senior Managing Executive Officer, MUFJ TBC
June 2019 Representative Director and President of Mitsubishi UFJ TrustBusiness Co., Ltd. (to present)

Important positions concurrently held at other companies, etc.
Representative Director and President of Mitsubishi UFJ Trust BusinessCo., Ltd

Reason for election
Expertise in finance and accounting, great discernment of corporate
management

Board of Directors meeting attendance (FY 20201)(Assumed his position in June 2021)

28

Corporate Governance◀

29

Financial
Services
AgencyFinancial Services
Agency's website

Mitsubishi Paper Mills' website and other means◀

In addition to the above discussion items, the active promotion of IR and SR activities taking into accountthe change in the composition of end users, etc. was proposed.

Information
disclosure◀

d. Other Proposals for Improvements

Media

◀

It can be recognized that the Board of Directors functions appropriately as a whole, but it is necessary to
respond to significant changes in the business environment more swiftly under the mid/long-term
management strategies, for example, by reforming the business portfolio. In addition, it is necessary toaddress sustainability issues, meet the expectations from stakeholders, including investors, employees, andcustomers, and adopt share-based compensation as medium- to long-term incentives while consideringsocial demand and responding flexibly.

◀

c. Functions of the Board of Director

Discuss and Verify

Tokyo
Stock
Exchange

Stakeholders

It can be considered that the frequency, duration, operation, and review of the meeting of the Board of
Directors, and the system for providing outside executives with material in advance are appropriate as awhole. It is still necessary to operate the meetings of the Board of Directors so efficiently that sufficient time
can be allocated to the discussions on important items, such as mid/long-term management strategies andinvestment strategies, and increase opportunities to share information through discussions outside theBoard of Directors, involving outside directors, to promote freewheeling strategic discussions.

◀

Timely disclosure

TSE's website
Media reportingb. Operation of the Board of Directors

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

Prepare documents
for disclosure
Provide information

Department in Charge ofInformation Disclosure

It can be considered that an appropriate system has been maintained for fulfilling the functions of theBoard of Directors, from the viewpoints of the number, knowledge, experience, and balance of directors, but
it is still necessary to increase the ratio of independent outside directors to one-third or higher, recruit female
executives in a planned manner, for example, by inviting them from outside the Company, optimize thebalance of expertise of directors for improving effectiveness, and acquire broad cross-sectoral knowledge.

Information DisclosureManager

General Affairs & Personnel Department /Accounting Departmenta. Composition of the Board of Directors(President and C.E.O.)

Notify of finalized
matters

Information Handling Manager

Analysis and Evaluation of FY2021 Board of Directors’ Effectiveness（3）—Summary of Results

Board of Directors

Director in Charge of the General Affairs &Personnel Departmentb. Operation of the Board of Directors
d. Other proposals for Improvements

Stock exchange
information◀

◀

Information Disclosure System

Questionnaire Topics（2）a. Composition of the Board of Directors
c. Functions of the Board of Directors⇨ Reference link: Disclosure Policy
https://www.mpm.co.jp/eng/ir/disclosure/disclosure_policy.html◀

December 24, 2020 - January 8, 2021: Questionnaire conductedFebruary 10, 2021: Discussions held at Board of Directors meeting◀

Date of Analysis and Evaluation of the Board of Directors’ Effectiveness in FY2021（1）

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, and fairdisclosure of information on a continuous basis, with our General Affairs & Corporate Communications Group in chargeof managing these efforts. It also regularly holds public relations sessions and manages the disclosure of information
about the Group. Furthermore, in the interest of fair disclosure, materials from financial result briefings are also disclosed
at the time meetings are held.

◀

The Board of Directors conducts a questionnaire for Directors and Audit & Supervisory Board members to analyze andevaluate the effectiveness of the Board of Directors as a whole. The results of the questionnaire are 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.

Information Disclosure◀

Assessments of the Board of Directors EffectivenessCommunication■ IR Information Website

An investor relations page can be found on the Mitsubishi
Paper Mills website. Information is disseminated in a timely
manner on this page, which provides primarily earnings
highlights, an IR calendar, an IR library (with access to annual
business reports and mid-term management plan materials),
General Meeting of Shareholders presentation materials, stock
information, etc.

⇨ Reference link: Investor Relations
https://www.mpm.co.jp/eng/ir/index.html■ Head Office Gallery: Paper Design Square
We have built a gallery at the head office displaying ourprincipal products to engender a stronger affinity with the
Mitsubishi Paper Mills Group products in addition to regularly
held planned exhibitions.
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, Sundays, public
holidays, and designated holidays)*We provide alcohol-based sanitizer and masks and regularly
disinfect tables, etc. at the gallery as measures against
COVID-19.

30

Corporate Governance

Code of Conduct of the Mitsubishi Paper Mills GroupOur basic concept for compliance has been formulated and upheld as “theCode of Conduct of the Mitsubishi Paper Mills Group.” In order to realize thephilosophy of the code, we gave shape to each item and formulated “theMitsubishi Paper Mills Group Compliance Conduct Standards.” This applies
to all executives and employees of the Mitsubishi Paper Mills Group, andserves as a guideline for daily activities.

Risk identification

Risk assessment

Risk response

Disclosure of risk information

Risk of business environment volatility
Each company and eac h department
Risk of legal violation
Compliance Committee
Risks to safety and health

Annual securities reports
Declining domestic demand andfalling market prices▼

Monitoring and Reviews
Risk Management Committee

If training is conducted repeatedly rather than only once, executives and employees are expected to become moreaware of compliance. In the Mitsubishi Paper Mills Group, line managers first undergo training every year, and then holdtraining for their respective staff, including temporary workers and part-time employees, following the cascade method.
The effectiveness of training is improved, if they gather and have discussions face-to-face, but there was the lingeringcoronavirus pandemic also in this fiscal year. To cope with it, we planned and conducted training tailored for each
workplace so that opinions can be exchanged while keeping social distance or remotely by using the Internet. The
number of trainees was 3,059.

Training Regarding Laws, Regulations, Etc. Related to Business Operations
In order to foster the knowledge of laws and regulations on business
operations and legal mind, we regularly hold in-company seminars on
legal affairs while inviting experts, including lawyers. In fiscal 2021, as werevise business operations amid the rapidly changing environment during
the coronavirus pandemic, the seminars were focused on subcontracting
and antimonopoly laws, so that our staff will not commit improper acts inrelationships with outsourcees and competitors. To cope with thesituation of the coronavirus pandemic, we held video seminars by
uploading videos to the intranet of our corporate group.

Title: “Incidents occur on site! Methods for dealing with cases that nearly violate a subcontracting or antimonopoly law”
Lecturers: The lawyer Dai Iwasaki and the lawyer Yojiro Arai of Tokyo International Law Office

Corporate Ethics Hotline, an Internal Whistleblowing System
Mitsubishi Paper Mills has an internal whistleblowing system that is available to all employees working in the Mitsubishi
Paper Mills Group in Japan. In fiscal 2021, we adopted a system in which whistle-blowers can notify anonymously in
addition to the conventional system. The whistle-blowing status is checked at the regularly held meeting of theCompliance Committee, and reported to the Board of Directors.

Communication and Discussion
CSR Committee

Company-wide Safety and HealthCommittee
Risks of product safety
Product Liability (PL) Committee
Risks to the environment

Rising cost of raw materials
Capital investment

Exchange rate volatility▼

Code of Conduct of the Mitsubishi Paper Mills
Group pocket card

Training on Compliance

31

Risk analysis

Rising interest rates▼⇨Reference link: Code of Conduct
https://www.mpm.co.jp/eng/company/gaiyo.html

To maintain and improve corporate value, it is important to properly manage a range of risks that arise in the course ofbusiness activities. In our Group, the Risk Management Committee, which is supervised by the General Affairs &Personnel Department, oversees Group-wide risk management efforts based on the sustainability promotion structure.
Divisions at company headquarters, committees, and business sites are working on a variety of measures to strengthenrisk management, including the establishment of various rules and manuals for responding to relevant risks, developmentof prevention systems and drills, and formulation of recurrence prevention measures when problems occur.

▼

In order to remain a corporate group that can earn the trust of society and live up to its expectations, the Mitsubishi
Paper Mills Group makes efforts to foster a corporate culture focused on compliance and enhance the awareness of
executives and employees.

Risk Management▼

Compliance

COVID-19 pandemic risk

Environmental Conservation
Committee

Disasters
Regulations and litigation
Other contingencies

Improving Our Risk Map

The Risk Management Committee is currently monitoring more than 200 risks Group-wide. We analyze the impact ofthese risks and the frequency with which they occur to build our risk map, and we regularly identify and analyze risks to
improve the effectiveness of our risk management.

Building a Crisis Management System

The Mitsubishi Paper Mills Group formulated “the Mitsubishi Paper Mills Group’ s Crisis Management Manual” torespond quickly in fulfilling its corporate social responsibility and maintaining social credibility in the event of an accident
or disaster that brings serious harm to people or equipment, or impacts
surrounding communities. In addition, to construct an effective risk
management system, we regularly conduct various drills and operation
tests at every business site and on a scale that involves the entire
company, and work to identify and resolve issues. We have run drills
using the safety check system installed at the Company’ s headquarters
in 2018 at business sites and Group companies in Japan to build aGroup-wide crisis management system. We have also been working toprevent the spread of COVID-19 by combining working from home andstaggered working hours.

Enhancing Information Management

Fire drill (Kitakami HiTec Paper Corporation)

The Group practices efficient and integrated use of information and works to manage it properly. Along withestablishing “the 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.

32

Fair Operating Practices
Ensuring Fair Trade■ FSC® Certification
FSC® certification was established in 1993 with the goal of auditing and certifying
responsible forest management from the economic, environmental, and social
perspectives. It aims to ensure that the world’ forests are kept healthy by labeling woodand wood products sourced from these forests. There are two types of FSC ®
certification: forest management (FM) certification and chain of custody (CoC)(processing and distribution process management) certification. In August 2001, theMitsubishi Paper Mills Group became the first paper mill in Japan to acquire CoC
certification. The Vancouver Declaration for the UN SDGs and FSC® Certification wasannounced at the Forest Stewardship Council General Assembly in October 2017,
which was held to drive greater support for the SDGs and FSC®. Mitsubishi Paper Mills
stands in solidarity with the declaration, and signed it along with 57 other companies inJapan and other countries.

Believing that the Mitsubishi Paper Mills Group will be able to win really valuable
trust, create valuable technologies, and make a valuable contribution through fair andfriendly competition, we carry out business activities while putting importance on thecompliance with laws and regulations. In order to deepen the understanding of the
purposes and provisions of the Act on Prohibition of Private Monopolization and
Maintenance of Fair Trade (Antimonopoly Act), the Act against Delay in Payment of
Subcontract Proceeds, Etc. to Subcontractors that complements the Anti-Monopoly
Act, and the Act against Unjustifiable Premiums and Misleading Representations, wehave updated “the Antimonopoly Act Compliance Manual.”
The education on legal affairs in 2020, which was conducted in the form of a video
seminar amid the coronavirus pandemic, was focused on the Antimonopoly Act andthe subcontracting law. (See page 31).

⇨ Reference link: FSC®-Certified Paper
https://www.mpm.co.jp/eng/env/fsc.html

Preventing Corruption

The Mitsubishi Paper Mills Group Compliance Conduct Standards prohibit business activities that may result in social
decay: entertaining or giving gifts to civil servants and giving benefits to officials in foreign governments and publicorganizations.
We also produced new “guidelines for business entertainment and gift-giving” to tighten the regulations regarding theprovision and receipt of benefits, so that there will be no murky relationships among individuals.

Disavowal of Anti-Social Elements

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 via compliancetraining. We have also implemented a search system that uses an external database and that enables us to mitigate therisk of inadvertently entering into relationships with anti-social elements.

Promoting Social Responsibility in the Value Chain

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 in order to provide competitive products. In order to ensure that we as
the Mitsubishi Paper Mills Group conduct ourselves responsibly and ethically, and that suppliers practice fair trade with asimilar business posture, we have established a Basic Policy for Procurement and a Policy on Forest Resource
Preservation and Nurturing, and on Wood Procurement and 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 link: Procurement of Raw Materials
https://www.mpm.co.jp/eng/env/timber.html

Responsible Raw Material Procurement

The Mitsubishi Paper Mills Group conducts business with wood as a principal raw material. In the interest ofsustainable wood procurement, we were one of the first organizations to acquire FSC® certification*, and procure timberfrom forests being properly managed in accordance with FSC® certification.
※FSC: Forest Stewardship Council®

33

FSC® C021528

Method for Verifying Legal Compliance and Sound Management
1. Evidence of use of the forestry certification and CoC certification schemes (FSC®-certified wood, FSC® controlledwood)
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 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 possesses a low risk with respect to A) through E) below.
A) Illegally harvested woodB) Wood harvested in violation of traditional and human rights
C) Wood from forests in which high conservation values are threatened by management activities
D) Conversion of natural forests to forests and non-forest uses
E) Wood from forests in which genetically modified trees are planted
・ Receiving audits of risk assessment results by an FSC® certifying body

■ Raw Wood Procurement in Fiscal 2021

We have verified that all wood chips and wood pulp procured in fiscal 2021 came from forests that were legally

and appropriately managed.
Countries of raw wood chip production

Types of raw wood
FSC®-certified
wood
20

Japan

FSC® Controlled wood

32%

74%

26%

0

Australia
10%

40

60

80

100 %

0

20

Vietnam
12%

Chile
28%

40

60

80

Other
3%

100 %

34

Relationship with the Environment
The Mitsubishi Paper Mills Group intends to make an active contribution to the creation of a sustainable society. To thisend, the Group will not only strive to prevent global warming and preserve biodiversity, but also to earn the trust of all its
stakeholders through the sustainable use of forest resources and through efforts to develop environmentally friendly
production technologies and products. This commitment is set forth in our Environmental Charter, formulated in April
1993 to guide our distinctive business activities, which leverage the Group’ s lines of business.

Preventing Global Warming
Environment Vision 2050

The Mitsubishi Paper Mills Group formulated “the Mitsubishi Paper Mills Group Environment Vision 2050” for the
purpose of contributing to the long-term Japanese government’ s goal: “Realization of carbon neutrality by 2050.”⇨ Reference link: Mitsubishi Paper Mills Group Environment Vision 2050
https://www.mpm.co.jp/eng/env/timber.html⇨ Reference link: Environmental Charter
https://www.mpm.co.jp/eng/env/timber.html

Environmental Charter

1. Fundamental Principles

The Mitsubishi Paper Mills Group intends to make an active contribution to the protection of the global
environment and the creation of a recycling society. To this end, the Group will not only strive to help prevent
global warming and preserve biodiversity, but also to earn the trust of all its stakeholders through the sustainable
use of forest resources.

2. Basic Policies(1) Implement measures to counter global warming(2) Protect and nurture forest resources, with appropriate
care given to the preservation of biodiversity(3) Promote the sustainable use of resources(4) Develop environmentally friendly production
technologies and products(5) Develop and fully utilize environmental
management systems(6) Promote environmental communication(7) Draw up appropriate contingency plans

Director of Technology &the Environment

Environmental Conservation Committee
Responsible department:
Technology and Environment Department

Affiliated Company

Chemical Substance Management

Environmental
Manager

30,525

Mill Environmental
Conservation Committee

Emissions(1,000 tons)
1,400

CO2 emissions and emission intensity

Emission intensity(tons/product tons)
1.60

1.256
21,54020,0001,200

15,000

1.051
●

1,000

946

1.038
●

1.041

957

●

1.038
●

1.059

●

1.20

●

983

0.80

932
856

10,000

800

791

0.40

5,000
0

2006

2021
（FY）

■ Fossil fuels■ Purchased electricity■ Renewable energy ■ Energy from waste

600

2014

2017

Emissions

2018

2019
●

2020

2021
（FY）

0.00

Emission intensity(Scope of statistics: Mitsubishi Paper Mills Limited, Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd. and KJ SPECIALTY PAPER Co., Ltd.)SpecialSubcommittee（s）Environmental Management
DivisionWith 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 laws and regulations. All our mills, offices, and affiliated production companies control andhandle chemical substances according to these guidelines, with central oversight by the Technology and Environment
Department at the head office. We also formulated the Mitsubishi Paper Mills Group Green Procurement Standards andProcedures based on these guidelines, promote green procurement and make efforts to mitigate environmental risks
posed by chemical substances.

35

Energy consumption (TJ)

25,000Statutory Manager

MillThe Mitsubishi Paper Mills Group has the target of bringing CO2 emissions down to 770 thousand tons or less by fiscal
2025 and is working on reducing its fossil fuel-based energy and overall energy consumption.

30,000To 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 have a company-wide system for ensuring the effectiveness of these efforts. The Technology andEnvironment Department is in charge of these initiatives and conducts environmental audits once a year to check
environmental performance.

President

Manufacturing Segment Initiatives

35,000

Environmental Management System

Research &Development Laboratory

The Mitsubishi Paper Mills Group will endeavor to realize carbon neutrality by:・Using renewable energy and energy generated from waste to the maximum degree,・Utilizing carbon fixation technologies, and・Developing environmentally friendly products.
We will contribute to the long-term Japanese government’s goal: “To actualize a decarbonized society or carbon
neutrality by reducing greenhouse gas emissions to zero by 2050.”

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 Rail Mark.
Under the Eco Rail Mark system, companies or products are certified and allowed touse 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 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.

36

Relationship with the Environment
Preserving Biodiversity

Effective Use of Materials
Morino Chonai-kai"Forest thinningsupport paper"production report

Forest thinningsupport paper
Forest thinningpromotion
expensePrinting
companies

Paper distribution
companies

Forest thinningsupport paper

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

Certificate of contribution to forest thinningand usage of wood from thinning

Report of receiptof thinned wood

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

Forest thinning
reportWood from thinning

Paper producing companies

Forest thinning promotion expense

In conformance with FSC® certification scheme standards, theMitsubishi Paper Mills Group makes careful use of wood feedstock
produced under proper forest management, and also works topopularize the FSC®. certification system. At the same time, we areengaged in a number of efforts to help forest preservation andsupport more prosperous local forestry and logging industries. This
includes promoting forest thinning through Morino Chonai-kai, aforest neighborhood association, which is a collaborative 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

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 waste (paper sludge) generated in the use of wastepaper and thepapermaking process. The black liquor is burned in recovery boilers, where heat energy and chemicals used to
manufacture pulp are recovered. The paper sludge, along with cut up tires, waste wood, and other waste materials, isused as fuel for a waste boiler. The incinerator bottom ash produced by the waste boiler and the ash produced by a coalboiler are used to make a recycled construction material named Reglobe and are also recycled into cement material andraw steelmaking material. These efforts to effectively use waste reduce final disposal volume while at the same time
reducing fossil fuel usage.
Carbon fixation

Ecosystem Academy

As one member of the industry that benefits from the “gifts of the forest,” the Ecosystem
Academy provides a place for experiential forest environment education to contribute todeveloping a sustainable society that will connect people and community through experiential
environmental education, forest surveys and research, and information dissemination. In
fiscal 2021, we held a study session on the forest environment in cooperation with Nishigo
Village, Fukushima Prefecture and Sumida City, Tokyo, promoting participation in thecommunity and contributing to the development of sustainable regions.

Properly managed forests

Customers

Waste paper

Local companies, etc.

Paper andpulp products

Waste tires andmaterial

Ash recycling

CO2■ Experiential Environmental Education

The program combines lectures, observations, measurements,
tree planting and growing using company-owned forests, andpapermaking and paper crafts as a means to experience the art ofmanufacturing. Consideration is given to forest preservation,
prevention of global warming, and biodiversity with circulation as
the keyword, thus contributing to the achievement of SDGs. In fiscal
2021, our activities were affected by the coronavirus pandemic, but
we held 18 events, including study sessions on the forest
environment and nature observation tours in Tokyo and Fukushima
Prefecture, and the total number of participants was 552.

EnergyContribution to the achievementof SDGs

Pulp millprocess
Chips andwaste paper⇨ PulpWood chips

Papermaking
process
Pulp ⇨ Paper

Paper sludge
Waste boilers

Biomass fuels

Children exploring the forest(company-owned forests in Murabi, Nishigo Village,
Fukushima Prefecture)（1,000 tons）

120
100

We hold regular environmental seminars led by instructors from diverse fields including people involved in theforestry, paper manufacturing, finance industries, and environmental preservation, and people teaching atuniversities. In 2020, Mr. Takehiko Ohta, who is a professor emeritus of the University of Tokyo, gave a lecture
under the theme of “natural disaster, the pandemic, and the environment” as a special lecture commemorating the10th anniversary of establishment of the Ecosystem Academy in an online seminar, providing a good opportunity
to ponder over the effects of the change in the global environment on our daily lives.

60

FSC® C021528

37■ Waste Generated and Volume Effectively Reused⇨ Reference link: Ecosystem Academy
https://www.mpm.co.jp/eng/env/timber.html■ Information Dissemination

Recovery boilers

Chemical recovery■ Forest Surveys and Research

We continuously engage in surveys of forest ecosystem andbiodiversity, including surveys on tree growth, surveys on animals
using trail cameras, surveys on soil animals and bird surveys incooperation with the Wild Bird Society of Japan’ s Shirakawa
Chapter in company-owned forests.

Coal boilers

80

40
20
0

2017

■ Waste generated

2018■ Volume effectively reused

2019

2020

■ Final disposal volume

2021
（FY）

(Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd.
and KJ SPECIALTY PAPER Co., Ltd.)38

Relationship with the Environment
Material Balance
Input
Main raw materials(1,000 t)
558
268
24
22
33

Imported wood chips
Domestic wood chips
Purchased pulp
Waste paper
Inorganic pigments

Mitsubishi Paper Mills Group(Domestic)

1 business office
Tsukuba R&D Laboratory

Service waterIndustrial water

Wastewater
COD
SS

KJ SPECIALTY PAPER
Co., Ltd.

123

104
0
2,511

(Million tons)(t)(t)

Product sales amountCO2 emissions (1,000 t)(1,000 t)
Wastewater

123
5,748
3,106

(1,000 t *after drying)
Waste generated
88
Volume effectively used
82
Final disposal amount6

Paper(1,000 t)
Photosensitive materials (Million m²)(1,000 t)
Pulp

Reference: 2 mills in Germany
Purchased pulp
(1,000 t)(1,000 t)
Waste paper
Service water usage (1,000 t)

791
753
205
200

(1,000 t)(1,000 Nm³)
(1,000 Nm³)
(t)

Waste

Toho Tokushu Pulp
Co., Ltd.

(Million tons)

Atmospheric release

Released into water systems

Kitakami HiTec Paper
Corporation(Crude oil equivalent, 1,000 kl)
Fossil fuels
222
Purchased electricity
36
Biomass
256
Refuse-derived fuel42

Environmental Impact Data

OutputCO2 emissions
NOx emissions
SOx emissions
Soot and dust

3 mills

EnergyEnvironmental Indicators

36
1,812

601
17
24

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

FY 2006

FY 2019

FY 2020

FY 2021

TJ

15,131

11,886

11,036

10,822

GJ/product-tons

13.6

13.2

13.6

15.9

Million tons

125

126

126

123

Million tons

-

127

127

123

1,000 t

1,164

932

856

791

1,000 Nm³

1,076

826

835

753

1,000 Nm³

247

260

187

205

t

-

392

376

200

t

7,717

7,504

7,045

5,748

3,417

3,621

3,719

3,106

1,000 t

-

182

166

150

Final disposal amount

1,000 t

-

8

9

8

Final disposal rate*

%

95.9%

94.9%

94.6%

Natural resources
Fossil fuel-based energy consumption
Fossil fuel energy intensity
Service water usage
Wastewater

Atmosphere

CO2 emissions*1
NOx
SOx
Soot and dust
Water quality
COD

t

SS

Waste

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

Waste generated
2-

Target（FY）

770 (FY2026)

98.4% (FY2026)*1 For CO2 emissions missions from purchased electricity, we use the CO2 emissions coefficient provided by the Federation of Electric Power Companies
of Japan.
*2 Final disposal rate = (Waste generated – Final disposal amount)/Waste generated × 100

Environmental Accounting

Emission transfer amount of PRTR target substances

Scope of statistics: Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Kitakami HiTec Paper Corporation, Toho Tokushu Pulp Co., Ltd. andKJ SPECIALTY PAPER Co., Ltd.
Unit: kg/year (mg-TEQ/year is used for dioxins only)

No. PRTR Class 1 Designated Chemical Substances

1
2
3
4
5
6
7
8
9

Chloroform

Cyclohexylamine

2,2-Dibromo-2-cyanoacetamide
Dioxins

TolueneHydroquinone

Boron and its compounds
Formaldehyde

Methylnaphthalene

Cabinet order No.

Emissions
Atmosphere

Water

Amount transferred
Sewerage
Off-site

127

14,600

3,400

0

0

154

0

0

0

0

210

0

725

0

30

243

0.00

36.50

0.00

0.00

300

6,650

0

0

1,980

336

0

0

27

0

405

0

0

140

75

411

28

1

0

922

438

1,150

0

0

0

Scope of statistics: Head Office, Hachinohe Mill, Kyoto Mill, Takasago Mill, Shirakawa Site, Tsukuba R&D Laboratory, Kitakami HiTec Paper Corporation
and KJ SPECIALTY PAPER Co., Ltd.
Statistical method: Conforms with the Environmental Accounting Guidelines 2005 issued by the Ministry of the Environment

Environmental Conservation Costs
Classification

Unit: Million yen

Principal Initiatives(1) Costs within business areas

Investments

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

Efforts are underway to detoxify hardware (stabilizers) containing high concentrations of PCBs and we expect to be able todetoxify all stabilizers by the legally mandated deadline. We also plan to gradually detoxify hardware containing low
concentrations of PCBs.

39

228

1,827

101

1,027

2. Global environmental conservation cost

Includes air pollution, water pollution, foul odor, noise, and vibration
measures
Includes domestic afforestation, energy conservation measures, etc.

56

3

3. Resource recycling costs

Includes waste measures and waste paper and other product recycling

71

797

(2) Upstream/downstream costs

Includes container and packaging recovery and recycling
Includes environmental education, environmental management
systems, and certification acquisition
Environmentally friendly product development, etc.
Includes greening, environmental beautification, and environmental data
disclosure
Fees for pollution-related health damage

257

257

2

51

0

145

28

28

0

55

515

2,363

1. Pollution control costs(3) Management activity costs(4) R&D costs(5) Social activity costs(6) Environmental damage costs
Total

PCBs

Expenditures

Economic Benefit of Environmental Conservation Measures
Classification

Earnings
Cost reduction
Total

Benefit

Unit: Million yen

AmountEffect of reuse of recovered pallet

331

Profit from sales of materials effectively recycled

24

Cost reduction from decreased energy usage

12

Cost reduction from improved material yield

232
599

40

Relationship with Employees
Based on our Principles and Guidelines Concerning Human Rights and Labor Practices, the Mitsubishi Paper Mills
Group makes a number of efforts to continue to create comfortable and fulfilling work environments where each andevery employee can fully display his/her abilities.

⇨ Reference link: Together with Our Employees
https://www.mpm.co.jp/eng/env/timber.html

Occupational Safety and Health Initiatives

In accordance with “the Group-wide Safety and Health Management Guideline,” which includes the basic principles forsafety and health, all of our group companies work on our activities from the viewpoint of CSR and we established asystem for management of safety and health, for the purpose of realizing a safer and more comfortable working
environment.

Group-wide Safety and Health Management Guideline[Basic principles]

While giving top priority to the safety and health of all people engaged in business activities of the Mitsubishi
Paper Mills Group, we foster a corporate culture in which employees can work without worry and actualize adisaster-free, healthy working environment.
As an organization for leading the practice of the basic principles, the Group-wide Safety and Health Committee wasestablished. This committee is chaired by the president, controls and evaluates activities for safety and health, andapproves group-wide plans for managing safety and health.

Fiscal 2021 Activities

In order to improve the level of safety awareness of employeesof the Mitsubishi Paper Mills Group, we focused on the following
two measures:(1) Thorough danger prediction(2) Enhancement of collaborative activities with partner companies,
affiliates, etc.

●

◆

◆

Training for experiencing danger (Takasago Mill)2014●

Changes in annual leave acquisition rate
（％）
100

■

■

■

◆

◆

◆

●

●

●

●

80

■

◆

■

●

◆

●
◆

◆

●

◆

●
◆

◆

●
◆

●

◆

2015

Mitsubishi Paper Mills

2016
●

2017

2018

2019

Japan Paper Association (industry statistics)

2020

2021
(FY)

※ Scope of statistics: Takasago Mill, Kyoto Mill, Shirakawa Site, MPM Operation Co., Ltd., Kitakami HiTec Paper Corporation, KJ SPECIALTY PAPER Co., Ltd.,

1,700

2017

2018

2019

●

Mitsubishi Paper Mills■

Manufacturing

2020
◆

2021
(FY)

All Industries※ All Industries’ and manufacturing’s data are from the Ministry of Health,Labour and Welfare’ s Monthly Labour Survey(companies with 500 employees or more; general workers only)

●
●

●

●

60

●

●

2013

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

1,900

●

2012

Regular Program Reviews Done in Conjunction with Our Labor Union

1,800

0.5
0.0

We introduced a work-from-home system as a flexible way of working to match the lifestyles of each individual
employee. We commenced implementation of the system gradually, starting with our headquarters. Together with thealready adopted staggered working hours system, these systems aim to improve work-life balance and alleviate stressfrom commuting congestion, and are thereby expected to also increase productivity.
In the work-from-home system, employees who are rearing a child or giving care to a family member can also use aflexible work schedule without core working hours (they can get off work anytime), so that they are able to develop theircareers while rearing a child or giving care to a family member.

2,000

●

◆

Measures for Flexible Workstyles(Hours/FY)
2,100

●

1.0

We believe that pursuing a good work-life balance not only contributes to healthier, more prosperous lives for
employees but also makes the Company more competitive. We are implementing a number of initiatives to create
comfortable work environments, with the desire to make the Group a vibrant and fulfilling place to work.

Total hours worked annually

Lost time accident frequency rate

(Accident frequency rate)
1.5

Efforts to Create Comfortable Work Environments

◆

40

2017
●

◆

◆

◆

2018

2019

2020

Mitsubishi Paper Mills◆

Society

◆

2021
(FY)

※ Society: From the Ministry of Health, Labour and Welfare’s General
Survey on Working Conditions

and each site’s Collaboration Committee

Promoting Good Mental and Physical HealthFor promoting the good mental and physical health, we are promoting the Employees Assistance Program. This
assistance program is composed of mainly consultation about health and mental health counselling, which are available
24 hours a day.
In addition, we have the collaborative health promotion committee for health-oriented business administration, for the
purpose of preventing lifestyle diseases. This committee is headed by an executive in charge of the General Affairs &Personnel Department, and carries out collaborative health promotion for our employees, including specific healthguidance, with the Mitsubishi Paper Mills Health Insurance Society.

41

Measures for Empowering Women
Mitsubishi Paper Mills has a number of programs to help employees balance work, parenting, and caregiving. For
example, in light of the “first-grade wall” problem, which refers to the difficulty of putting children in childcare untilnighttime once they enter elementary school, employees can take advantage of shortened working hours to provide
childcare until their children reach the end of first grade.
In accordance with the Act on the Promotion of Female Participation and Career Advancement in the Workplace (theact for empowering women), an action plan for empowering women was formulated, and we engage in some activities
for increasing female employees.

42Relationship with Customers
To provide customers with products they can feel good about using, we have established our own Product Safety
Code, and are making efforts to maintain and improve product safety. Along with maintaining legal compliance andconducting fair marketing practices, we will continue to actively communicate with our customers and provide productsthat benefit society.
⇨ Reference link: Product Safety Codehttps://www.mpm.co.jp/eng/env/timber.html

Product Safety Code

Mitsubishi Paper Mills believes that the role of a company in society is to provide satisfying services along withsafe and useful products to customers, and we have utilized our excellent technologies to provide safe products tosociety. From here on, too, we will steadily implement the following actions throughout the entire company tomaintain sound 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 and 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 tocreate products that benefit the world at large.
In order to facilitate the communication with customers, we actively participate in exhibitions. In fiscal 2021, a lot of
exhibitions were postponed or cancelled due to the coronavirus pandemic, but we participated in online exhibitions, too.

Quality Control System

To be able to quickly respond to customer
feedback and quality issues, the Group’ s
President
businesses are divided into seven segments,and have built a quality control system overseenby the president.
Director of Technology& the Environment
The key production facilities in each businesssegment have acquired ISO 9001 certification.
Printing Paper
In addition, quality control administrators,
Business General Manager
who have responsibility for and authority overFunctional Materials Businessquality in the business segment, share
General Manager
information with the relevant business Research and Development
Division General Manager
division general managers while working tomaintain and improve the quality control
system. Furthermore, to guarantee quality
control system effectiveness, the Technology
and Environment Department at the head
office regularly audits quality control efforts
for each business segment and issues
reports to the officer in charge.

Hachinohe Mill business segment
Quality control administrator: Hachinohe Mill Manager

Takasago Mill business segment
Quality control administrator: Takasago Mill Manager

Kyoto Mill business segment
Quality control administrator: Kyoto Mill Manager

KHP* business segment
Pressboard business segment
Quality control administrator: Printing & Communication
Paper Sales Department Manager

Functional materials business segment
Quality control administrator: Functional Materials
Business Deputy General Manager

KJ SPECIALTY PAPER segment
Quality control administrator: KJ SPECIALTY
PAPER president

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

43

The 8th Filtration & Separation Asia (Shanghai, December 2020)

Quality control administrator: KHP* president

Online exhibition of printing and media related to industrial inkjet"JIVM2020" (June 2020；Web：https://jivm.net/)*KHP: Kitakami Hitec Paper Corporation(as of August 31, 2021)

Encouraging the Worry-Free Use of Our Products

Product Liability (PL)Committee
Product Safety
Judgment Panel

Product safety activities◆ Legal compliance team◆ Outside party negotiationteam◆ Education team
◆ Consumer support teamProduct Liability (PL)Subcommittee◆ 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 affiliatedcompanies, share information with each other and conduct thorough safety inspections of the raw materials used. With
respect to chemical substance control, we have established the Chemical Substance Management Guidelines and theGreen Procurement Guidelines and strictly control everything from the raw materials we use to our products’ constituent
substances. Also, not only do we ensure compliance with laws and regulations, we also meet voluntary standards set by
the industry according to product application and satisfy the demands of individual customers. We will contribute to thebetterment 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 formulated its Social Contribution Direction of Activities to proactively interact with communities through its business activities. Through activities such as
those conducted by the Ecosystem Academy (see page 37), which uses forests owned by Mitsubishi Paper Mills, weundertake a number of social contribution activities that take advantage of the characteristics of each of our businesssites.
⇨ Reference link: Social Contribution - Direction of Activities
https://www.mpm.co.jp/eng/env/timber.html

Social Contribution - Direction of Activities● Environmental protection: We will contribute to the creation of a recycling society to maintain our precious■ Community Cleanup Activities
Every one of our business sites regularly undertakes activities to beautify and clean up the surrounding areas andpromotes initiatives to develop comfortable urban environments together with local communities.
For example, Hachinohe Head Office of Mitsubishi Paper Engineering Co., Ltd. was certified as “a supporter forconserving the waterfront of the hometown in Aomori Prefecture” and registered as a “Hachinohe cleaning partner” in
October 2020. We carried out cleaning activities on the target area of Gonohe River (on both shores of 1,800m) in
November. In addition, the Oyama Mill of Toho Tokushu Pulp Co., Ltd. takes part in Oyama City’ s Green and Light
Adopt-a-Road Campaign and makes efforts every month to maintain and improve the environment around roads.

global environment.
⇨ We will work to protect the global environment by making the most of our business activities, such assupporting the "FSC® Certified Forest" and supporting thinning in collaboration with NPOs.
● Living alongside local communities: We are strengthening our social contributions rooted in local communities.
⇨ Mills and offices play key roles by actively engaging in local community activities and contributing to thedevelopment of those communities.
● Supporting volunteer activities: We support the volunteer activities of our employees.

Communication with Community Members

Cleaning activities around Gonohe River (Hachinohe Head Office of Mitsubishi Paper Engineering Co., Ltd.)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. In fiscal 2021, major local activities werecancelled or postponed due to the coronavirus pandemic, but we implemented measures for preventing infection and thefollowing measures for avoiding the risk of infection.

Contributing to Local Communities■ Large-sized partitions
The Shirakawa Site donated large-sized partitions,which were produced by Hakuryo Paper Technology Co.,
Ltd. by processing the photographic base paper ofKitakami HiTec Paper Corporation, to local elementary
schools.
Green and Light Adopt-a-Road Campaign(Oyama Mill of Toho Tokushu Pulp Co., Ltd.)

Scene of use of large-sized partitions

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.

■ Braille Calendars

We began producing braille calendars in 1997, and the2021 edition marked the 25th year of this effort. We donate
them to local social welfare groups and braille libraries
mainly via our business footholds.
Braille calendars were produced under the theme of a
cooking recipe with the hope of sharing “pleasure ofcooking,” “pleasure of eating,” and “pleasure of serving” withvisually impaired people. The braille calendar for fiscal 2021
introduces the recipes of healthy dishes so that they canspend time at home more healthily with delicious food.

45(10,000 yen)

Philanthropic Expenditures

6,000

Breakdown of Philanthropic Expenditures
Culture and arts
Environment
Regional activities andInternational exchange, etc.
cultural preservation

4,000

Social welfare

2,000

Braille Calendar (2021 edition)

FSC® C021528

0

Academics, research andeducation
2017

2018

2019

2020

2021
(FY)

46

Fiscal 2021 CSR Activities
In fiscal 2021, we established “enhancing activities to ensure safety and health” and “product development centered on
harmony with society” as our two top priority issues, and undertook activities aimed at improving corporate value. In terms ofinitiatives to reduce greenhouse gas emissions and products, we worked to expand environmentally conscious products tocontribute to the UN Sustainable Development Goals (SDGs).

ISO 26000 Core Subjects

1. Organizational Governance

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 our
Corporate Code of
Conduct and theCompliance Conduct
Standards
・Ensuring strict legal
compliance

Activity Results
・Implemented initiatives based on the Basic Policies on
Corporate Governance and held meetings of theNomination and Remuneration Committee
・Evaluated the effectiveness of the Board of Directors, to・Review governance functions
generate a positive spiral for enhancing the effectiveness・Enhance structural preparations and our risk ・Conducted semiannual risk map reviews and updated risk
assessments and evaluations
map in the interest of Group management
・Conducted training on backing up information disclosure
・Discuss ways of improving simulation andduring emergencies
training
・Conducted training on safety check system notification
・Improve employees' understanding of the・Education that broadly confirms the fields related to
Corporate Code of Conduct, thecorporate compliance is carried out in a way that suits theCompliance Conduct Standards, andsituation of coronavirus pandemic.
related laws and regulations through morerobust compliance education

・Promoting various
measures to improve
human resource
performance

○

○
○

○

4. Labor Practices

Action Plan
・Improve the level of safety awareness of
Mitsubishi Paper Mills Group employees(1) Thorough danger prediction(2) Enhancement of collaborative activities
with partner companies, affiliates, etc.
・Revise and consolidate HR systems basedon workstyle reform
・Secure human resources by stepping up
recruitment activities and develop humanresources by revising training programs

Activity Results
・(1)Promoted one-point danger prediction before work,
specified the month for enhancing danger prediction,
carried out experience-based education, and so on.
(2)Made efforts suited for each business site (e.g., joint
meetings and workplace patrols)・Introduced staggered commuting system andwork-from-home system.
・Established “Welcome Back System”
・Utilized teleconference systems and increased opportunities
to come into contact with students living far away
・Training system review postponed to next term due to thecoronavirus pandemic.

Key Issues
・Promoting activities toprevent global warming

・Promoting activities topreserve biodiversity○

・Disseminated information on the financial results briefings,
the General Meeting of Shareholders, the Corporate
Report, the Annual Report, earnings briefings, and thedividend of surplus
・Sales of products related to the novel coronavirus infection
・Disseminate information about new(alcohol disinfectant, splash prevention partition, anti-virus
products, etc. (sharing information about
functional filter, disposable mask case, melt blow
affiliated companies)
non-woven fabric and new mask manufacturing
equipment, etc.
・Enhance and make use of the Head Office ・For coping with COVID-19, cancelled exhibitions, but
improved our permanent displays
gallery・Issued Corporate Report 2020 in August in an integrated
・Enhance our corporate reports
report format
・Step up efforts at continually promoting CSR ・Conducted awareness raising activities using corporate
activities
reports and better familiarized Group employees with CSR
policy3. Human Rights

ISO 26000 Core Subjects○○○

ISO 26000 Core Subjects

Key Issues
・Enhancing activities toensure safety and health

Evaluation

・Screened contracts and handled legal consultations
・Conducted the education on legal affairs focused on thesubcontracting law and general Antimonopoly Act
・Regularly published Compliance News newsletter to raiseawareness of compliance・Build effective legal functions
・Promote a better understanding of laws
applicable to our operations, and enforce
compliance (includes responses to
updated changes in laws and regulations,such as the revision of the Civil Code)・Promoting communication ・Further improve the IR information wewith stakeholders
provide on our website, etc.

・Expanding initiatives out
to affiliated Group
companies

2. Fair Operating Practices

○

○
○
○

Evaluation

・Improving and enlarging
our environmentallyconscious product lineup
・Reducing environmental
risk and impact

5. The Environment

Action Plan
・Continue reducing CO2 emissions in ourbusiness activities and investigate
becoming low-carbon or carbon-free in the
future・Support and get involved in renewableenergy projects
・Increase the percentage of FSC®-certified
wood we procure
・Conduct ecosystem studies incompany-owned forests
・Take measures to address microplastic
waste in the oceans
・Participate in the Japan Business Initiative
For Biodiversity (JBIB)
・Promote environmentally conscious
products such as FSC®-certified paper
・Develop and roll out new environmentallyconscious products
・Reduce industrial waste
・Expand environmental evaluation activities
・Improve environmental communication

ISO 26000 Core Subjects

Key Issues
・Ensuring product safety

Activity Results
・Determined the target reduction amount of CO2 emissions
for the next term and long-term visions

Evaluation

・Discussed the potential of the new renewable energy
business
・Strived to procure FSC®-certified chips
・Conducted a survey on the ecosystem (tree planting andgrowth, soil animals, wild birds, and animals) in the forest
owned by Shirakawa Site
・Sold recyclable barrier paper for packaging (barricote®)・Developed water-repellent, oil-proof paperboard as basepaper for paper containers as alternatives to plastic containers・Gathered information via regular meetings, etc.
・Released bleached kraft paper and Margari Light, which are
new FSC®-certified paper products
・Registered two new environmentally conscious products○

・Apr.-Jan. final disposal volume: 4,883 t, final landfill waste
percentage: 1.00%
・Gathered information on rating agencies
・Sluggish, because many events were cancelled due to thecoronavirus pandemic△

6. Consumer Issues

Action Plan
Activity Results
・Enhance chemical substance management ・Updated chemical substance database as needed andshared the latest information
・Swiftly shared information on laws and regulations by・Enrich the activities of the Product Liability
holding meetings of the PL Subcommittee and distributing(PL) Subcommittee
monthly reports
・Conducted extraordinary quality audit
・Promote thorough adherence to ISO 9001
・Ensuring product quality
management and improve customer
satisfaction (reducing complaints, etc.);
continue to conduct quality audits(1)Step up Monitoring of repeat complaints(2)Review efforts to prevent data falsification(manage contractors and control publisheddata such as labels and SDS)・In product areas with high potential, aim to ・Developed barrier paper for packaging, which would enable
・Product development
develop highly-useful products that reflect
centered on harmony with
us to reduce or do away with plastics
customer demands and that target end-users ・Developed and commercialized water-repellent, oil-proof
society
paperboard which is more water-resistant than conventional
water- and oil-proof paperboard

○

○
○
○
○
○
○

○
̶

Evaluation
○
○
△

△

△

ISO 26000 Core Subjects○
̶Key Issues
・Promoting community
support activities
・Promoting culturalcontribution activities

・Promoting activities of the
Ecosystem Academy

Top priority issues

7. Community Involvement and Development

Action Plan
Activity Results・Take part in local activities at each business ・Tried to blend in with local communities at each businesssite by cleaning, donating blood, providing products,
site and continue good relations with
distributing braille calendars, etc.
communities
・Participated in the project for commemorating the 150th
・Implement ongoing support focusing onanniversary of establishment of Mitsubishi
Mitsubishi and related industry groups
・Made donations to and sponsored various related groups
and their plans・Ensure these activities become established ・Acquired accreditation of "the place of the opportunity of forexperience in Fukushima"and developed as ongoing collaborations
with society
・Conducted experiential forest environment education
・Carried out “the 5th forestation” in the forest owned by
Shirakawa Site
(Evaluation)○: Target met

Evaluation○○○△: Target not met ̶: Not evaluated due to COVID-19

FSC® C021528
47

48

Fiscal 2022 CSR Action Plan
For fiscal 2022, we have chosen “enhancing activities to ensure safety and health,” “product development centered on
harmony with society” and “ensuring product quality” as our three top priority issues. Implementing our action plans will see us
carry out the PDCA cycle to improve the quality of our CSR activities, while at the same time faithfully incorporating feedback
gained through dialogue with stakeholders as we undertake initiatives uniquely suited to the Mitsubishi Paper Mills Group.

ISO 26000 Core Subjects 1. Organizational Governance 2. Fair Operating Practices
Key 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
・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 simulation and training
・Improve employees' understanding of the Corporate Code of
Conduct, the Compliance Conduct Standards, and related laws andregulations through more robust compliance education
・Build effective legal functions
・Promote a better understanding of laws applicable to our operations,and enforce compliance・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 Subjects 5. The Environment
Key Issues

・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 Subjects 6. Consumer Issues
Key Issues

Key Issues

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

Action Plan

・(1)Strengthen KY (danger prediction) activities and thoroughlycall attention to single-person work in case of trouble(2)Give guidance on safety to temporary staff thoroughly・Inspect systems installed for reforming workstyles and improve
operations
・Promote and standardize updated training programs

・Product development centered on harmony withsociety

ISO 26000 Core Subjects

Key Issues

・Conduct ecosystem studies in company-owned forests
・Take measures to address microplastic waste in the oceans
・Promote environmentally conscious products such as
FSC®-certified paper

・Develop and roll out new environmentally conscious products・Manage environmental management goals company-wide for
improving performance
・Expand environmental evaluation activities

Action Plan・Enhance chemical substance management
・Enrich the activities of the Product Liability (PL)・Subcommittee Acquire Product Safety Awards
・Promote thorough adherence to ISO 9001 management and improvecustomer satisfaction (reducing complaints, etc.); continue to
conduct quality audits(1)Step up monitoring of repeat complaints

・Ensuring product safety

・Ensuring product quality

ISO 26000 Core Subjects 3. Human Rights 4. Labor Practices

Action Plan

・Continue reducing CO2 emissions in our business activities andinvestigate becoming low-carbon or carbon-free in the future・Support and get involved in renewable energy projects
・Increase the percentage of FSC®-certified wood we procure(2)Review efforts to prevent data falsification (manage contractors
and control published data such as labels and SDS)
・While listening to customer requests, we will expand our uniqueproducts with Environmentally friendly characteristics

7. Community Involvement and Development

・Promotion of local contribution activities
・Promoting cultural contribution activities
・Promoting activities of the Ecosystem Academy

Action Plan

・Participation in local activities in each place and continuation ofsmooth relationships with the community
・Implement ongoing support focusing on Mitsubishi and relatedindustry groups
・Ensure these activities become established and developed as
ongoing collaborations with society

Top priority issues

FSC® C021528

49

50

Financial Section
Business results in fiscal 2021

(From April 1, 2020 to March 31, 2021)
In this term, the economic situations in both Japan and the world were harsh due to the impact of COVID-19. Althoughsome economic activities showed signs of recovery, the future outlook remains uncertain as predictions cannot be madeabout how much longer it will take for the coronavirus crisis to subside. The paper and pulp industry was confronted witha structural decrease in the demand due to the digitization of information media, and the increase of telecommuting,cancellation of events, etc. accelerated decline in the demand for printing and communication paper.
Amid such situation, we have flexibly responded to the rapidly changing circumstances, for example, by developing a
production system tailored for the demand trend.
In regard to the “New Mid-Term Management Plan” (from April 2019 to March 2022), which is now in its second year,
we have actively engaged in the following three priority strategies:(1) Establish a robust management base through the alliance with the Oji Group;(2) Make structural reforms and enrich existing business; and(3) Diversify the business base by fostering new profit pillars,
and we are progressing with the basic principle: Strengthening and diversifying the business base for a new stage.
In the alliance with the Oji Group, we are progressing with the reform of the business portfolio and the reinforcement of
the management base based on the effects of capital and business alliances brought about by measures such as“transferring the carbonless-copy paper business to our Takasago Mill in July 2020” and “business transfer of thepressboard business at our Shirakawa Site to Oji F-Tex Co., Ltd. in October 2021 (planned).”In this term, all businesses were heavily affected by the decline in demand caused by the coronavirus crisis andconsolidated net sales stood at 162,325 million yen (down 16.6% year on year).
While the reduction of costs, such as fixed costs of factories, and low prices of raw materials and fuel proved to beeffective, profit and loss were heavily impacted by the decline in the production and sales volume. As a result,consolidated operating loss was 1,770 million yen (operating income was 1,976 million yen in the previous term) andconsolidated ordinary loss was 636 million yen (ordinary income was 2,696 million yen in the previous term). Loss
attributable to owners of parent stood at 2,532 million yen due to the recording of the impairment loss related to theclosing of the Tsukuba R&D Laboratory, etc. (profit attributable to owners of parent was 801 million yen in the previousterm).
Non-consolidated results are as follows: Net sales were 86,619 million yen, operating loss was 3,095 million yen, andordinary loss was 735 million yen, while net loss was 5,818 million yen as loss on valuation of shares of subsidiaries andassociates, loss on valuation of investments of subsidiaries and associates, etc. were recorded.

As of the end of this consolidated fiscal year, liabilities decreased 5,153 million yen year on year to 146,535 million
yen,as interest-bearing debt was cut down, notes and accounts payable - trade were reduced, and so on.
Despite the recording of loss attributable to owners of parent, net assets increased 2,374 million yen from the end of
the previous consolidated fiscal year to 62,902 million yen owing to an increase in valuation difference on
available-for-sale securities, remeasurements of defined benefit plans, etc. brought about by a rise in share price.

Cash flow situation

Cash and cash equivalents at the end of this consolidated fiscal year stood at 15,701 million yen, up 6,440 million yen
from the end of the previous consolidated fiscal year.

■ Cash flows from operating activities
Cash provided by operating activities increased 3,037 million yen year on year to 13,014 million yen. The
revenues are broken down mainly into depreciation of 9,031 million yen and decrease in inventories of 8,175
million yen, while the expenses mostly consist of decrease in notes and accounts payable - trade of 4,193
million yen.

■ Cash flows from investing activities
Cash expended in investing activities was 2,098 million yen, down 4,473 million yen year on year. The
expenses were comprised mainly of purchase of property, plant and equipment and intangible assets amounting
to 3,931 million yen.

■ Cash flows from financing activities
Cash expended in financing activities decreased 1,142 million yen year on year to 4,512 million yen. This wascaused mainly by the reduction of interest-bearing debt.

Basic policy concerning distribution of profit and dividends

Financial condition in fiscal 2021
(From April 1, 2020 to March 31, 2021)

Statuses of assets, liabilities and net assets

Although there was some increase in assets related to investment securities and net defined benefit asset, etc.,
resulting from a rise in share price, the assets as of the end of this consolidated fiscal year stood at 209,438 million yen,down 2,779 million yen year on year, due to the reduction of inventories, etc.

51

In regard to determination of dividends from retained earnings, etc., we view the return of profits to shareholders as animportant management subject and make it our basic policy to keep paying dividends stably while taking into
consideration the performance in respective fiscal years and internal reserves for allowing the implementation of future
management measures.
We have decided to refrain from paying term-end dividends, after comprehensively considering recent performancetrends.

※Basic policy concerning the selection of accounting standards
Taking into consideration the possibility of comparison between terms of the consolidated financial statements as wellas the possibility of comparison between companies, the policy of our Group plans to produce consolidated financial
statements using Japanese standards for the time being. Our policy is to take into account the trends of other companies
in Japan adopting IFRS, etc., and go on to respond as appropriate.

52

Financial Section
Consolidated Balance Sheets(Million yen)

As of March 31, 2020

As of March 31, 2021

As of March 31, 2020

As of March 31, 2021

Liabilities

AssetsCurrent assets

9,260

15,701

31,35828,797

Merchandise and finished goods

30,13823,433Work in process

7,066

6,758

Raw materials and supplies

11,278Other

Cash and deposits

Current liabilities
Notes and accounts payable - trade

22,082

18,577

3,934

3,137

Short-term loans payable

64,26759,150Commercial paper

4,000

7,000

10,230

Lease obligations

334

360

3,629

4,123

Accrued expenses

6,509

6,129

Allowance for doubtful accounts

△ 157

△ 430

Income taxes payable

Total current assets

92,576

88,614

Other

Notes and accounts receivable - trade97,21497,850△ 72,543△ 74,452

Accumulated impairment loss

△ 211

Buildings and structures, net

24,459Cumulative depreciation

431

361

3,960

5,825

105,519

100,542

Non-current liabilities

Property, plant and equipment
Buildings and structures

Electronically recorded obligations

Total current liabilities

Non-current assets

33,49531,772

Lease obligations

901

794

△ 583

Deferred tax liabilities

119

469

22,814

Provision for directors’ retirement benefits

50

54

Long-term loans payable

370,506

358,285

Net defined benefit liability

9,423

9,664

△ 324,980△ 316,284

Asset retirement obligations

883

884

△ 1,709

△ 863

Other

1,293

2,352

43,816

41,137

Total non-current liabilities

46,16945,993

Land

21,89821,619151,689

146,535

Leased assets

3,704

3,922

△ 2,136△ 2,510

Shareholders’ equity

1,568

1,411

Capital stock

36,561

36,561

Machinery, equipment and vehicles
Cumulative depreciation
Accumulated impairment loss
Machinery, equipment and vehicles, net

Cumulative depreciation
Leased assets, net
Construction in progress
Other
Cumulative depreciation
Accumulated impairment loss
Other, net
Total property, plant and equipment

467

465

Capital surplus

8,555

8,555

9,121

Retained earnings

13,71910,967△ 7,821△ 7,608

Treasury shares

△ 152

△ 152

△ 25

△ 27

Total shareholders’ equity

58,68455,932

Valuation difference on available-for-sale securities

1,206

3,942

Foreign currency translation adjustment

1,095

910

Remeasurements of defined benefit plans

△ 461

2,112

Total accumulated other comprehensive income

1,840

6,965

2

4

1,498

1,485

93,70888,934

Other

409

1,590

Total intangible assets

409

1,590

Investment securities

15,763

20,231Long-term loans receivable

2,115

1,665

962

4,687

Deferred tax assets

4,318

2,548

Other

2,437

1,240

Allowance for doubtful accounts

△ 74

△ 74

Total investments and other assets
Total non-current assets
Total assets

Accumulated other comprehensive income

Non-controlling interests

Investments and other assets

Net defined benefit asset

Total liabilities
Net assets

9,345

Intangible assets

53(Million yen)

25,52330,298

119,641

120,823

212,217

209,438

Total net assets
Total liabilities and net assets

60,52762,902

212,217

209,43854

Financial Section
Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss for ship lease
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on disposal of non-current assets
Gain on sales of investment securities
Insurance income
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment loss
Provision of allowance for doubtful accounts for subsidiaries and associates
Loss on valuation of shares of subsidiaries and associates
Loss on tax purpose reduction entry of non-current assets
Loss on disaster
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes-current
Income taxes - deferred
Income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent(Million yen)

Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2021

194,575
164,492
30,082
28,105
1,976

162,325
139,740
22,58424,355△1,770

55
486
1,196
−
566
2,305

36
505
1,196
263
489
2,492

991
−
167
426
1,585
2,696

733
259
−
365
1,359
△636

14
123
220
1,740
59
2,158

15
567
140
−
0
723

629
1,159
−
−
1,740
168
155
3,854
1,000
503
△ 246
256
743
△58
801

489
987
285
222
−
−
79
2,065
△ 1,977357
196
554△ 2,5320△ 2,532

Consolidated Statements of Comprehensive Income
Fiscal year ended
March 31, 2020
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

55

Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2020

Balance at the beginning of the term
Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy
Changes during the term
Dividends from surplus
Profit attributable to owners of parent
Liquidation of consolidated subsidiaries
Acquisition of treasury shares
Disposition of treasury shares
Change in equity of the parent related to transactions with non-controlling shareholders
Changes in items other than shareholders’ equity during the term, (net)Total amount of changes during the term
Balance at the end of the term743

△ 2,532△ 2,428△121△ 2,692△ 11△ 5,254△ 4,510

2,739
△146
2,574
△ 40
5,126
2,594

△ 4,467
△ 42

2,592
1

Capital stock

Capital surplus

Retained earnings

Treasury shares

36,561

9,682

△150

36,561

9,682

13,145△4
13,140

△150

△223
801

△1,127−36,561△1,127
8,555

△0

△2
0

578
13,719△2△152

Total shareholders’equity59,240△4
59,235

△ 223
801
−
△2
0
△ 1,127△ 550
58,684

Accumulated other comprehensive income
Valuation difference
on available-for-sale securities
Balance at the beginning of the term
Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy
Changes during the term
Dividends from surplus
Profit attributable to owners of parent
Liquidation of consolidated subsidiaries
Acquisition of treasury shares
Disposition of treasury shares
Change in equity of the parent related to transactions with non-controlling shareholders
Changes in items other than shareholders’ equity during the term, (net)Total amount of changes during the term
Balance at the end of the term

Foreign currencytranslation
adjustment

Balance at the beginning of the term
Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy
Changes during the term
Dividends from surplus
Loss attributable to owners of parent
Liquidation of consolidated subsidiaries
Acquisition of treasury shares
Disposition of treasury shares
Change in equity of the parent related to transactions with non-controlling shareholders
Changes in items other than shareholders’ equity during the term, (net)Total amount of changes during the term
Balance at the end of the term

Remeasurements of Total accumulated
defined benefit plans other comprehensive
income

3,635

1,209

2,265

7,110

3,635

1,209

2,265

7,110

△ 2,429△ 2,429
1,206

△ 113
△ 113
1,095

Fiscal year ended March 31, 2021

△ 2,726△ 2,726△ 461△ 5,269△ 5,269
1,840

Non-controllinginterests

Total net assets

654
△1
653

67,004△6
66,998

△ 650
△ 650
2

△ 223
801
−
△2
0
△ 1,127△ 5,920△ 6,470
60,527(Million yen)
Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury shares

36,561

8,555

13,719△ 152

36,561

8,555

13,719

△ 152

△ 223
△ 2,532
4−
36,561−
8,555△2,751
10,967

△0

△0
△152

Total shareholders’equity58,684−58,684△ 223△2,5324△0−−△ 2,752
55,932

Accumulated other comprehensive income(Million yen)

Fiscal year ended
March 31, 2021

(Million yen)
Shareholders’ equity

Valuation difference
on available-for-sale securities
Balance at the beginning of the term
Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy
Changes during the term
Dividends from surplus
Loss attributable to owners of parent
Liquidation of consolidated subsidiaries
Acquisition of treasury shares
Disposition of treasury shares
Change in equity of the parent related to transactions with non-controlling shareholders
Changes in items other than shareholders’ equity during the term, (net)Total amount of changes during the term
Balance at the end of the term

Foreign currencytranslation
adjustment

Remeasurements of Total accumulated
defined benefit plans other comprehensive
incomeNon-controllinginterests

Total net assets

1,206

1,095

△461

1,840

2

1,206

1,095

△461

1,840

2

60,527−60,5271
1
4△223△2,532
4
△0
−
−
5,126
2,374
62,902

2,736
2,736
3,942

△185
△185
910

2,574
2,574
2,112

5,125
5,125
6,965

56

Financial Section

Company Profile and Corporate Data

Consolidated Statements of Cash Flow
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation

Loss on disaster
Impairment loss

Decrease (increase) in net defined benefit asset

Increase (decrease) in net defined benefit liability

Increase (decrease) in provision for directors’ retirement benefits
Interest and dividend income

Share of loss (profit) of entities accounted for using equity method
Interest expense

Loss (gain) on sales of short-term and long-term investment securities
Loss (gain) on disposal of non-current assets

Loss on tax purpose reduction entry of non-current assets
Subsidy income

Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories

Increase (decrease) in notes and accounts payable - trade
Other, net
Subtotal

Subsidies received

Payments for loss on disaster

Interest and dividend income received
Interest expenses paid
Income taxes paid

Net cash provided by (used in) operating activities

Cash flows from investing activities

Purchase of property, plant and equipment and intangible assets

Proceeds from sales of property, plant and equipment and intangible assets
Purchase of investment securities

Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net

Cash flows from investing activities

Cash flows from financing activities

Net increase (decrease) in short-term loans payable
Net increase (decrease) in commercial paper
Proceeds from long-term loans payable

Repayments of long-term loans payable
Repayments of lease obligations
Dividends paid

Purchase of treasury shares

Proceeds from sales of treasury shares

Dividends paid to non-controlling interests

Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Net cash provided by (used in) financing activities

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

57(Million yen)

Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2021

1,000
9,824
168
1,159
1,210
340
△ 10
△ 542
△ 1,196
991
△ 123
615
1,740
△ 1,740
6,229△ 4,273△ 4,537△ 1,018
9,837
885
△ 213
552
△ 998
△ 87
9,976

△ 1,977
9,031
−
987
△ 625
519
3
△ 542
△ 1,196
733
△ 551
473
−
−
2,470
8,175
△ 4,193323
13,631
300
△8
771
△ 742
△ 937
13,014△ 7,243
139
△ 33
416
△ 450
822
△ 222
△ 6,571△ 3,931
164
△ 19
897
△0
450
339
△ 2,098△ 52△ 3,000
16,000△ 16,075
△ 570
△ 223
△0
0
△ 58
△ 1,673△ 3,853
3,000
12,580△ 15,663
△ 350
△ 223
△0
−
△0
−

△ 5,655△ 106△ 2,356
11,617
9,260△ 4,512
37
6,440
9,260
15,701Company Name
Mitsubishi Paper Mills Limited
Address
2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026, Japan
Representative
Yukihiro Tachifuji, President & CEO
Founded1898
Paid-in Capital
36,561 million yen
Consolidated Number of Employees
3,579
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,
speciality printing paper, communication paper, hygiene
paper, electrical insulation pressboard, high-quality
white paperboard, speciality white paperboard, otherspeciality paper, bleached kraft pulp, and speciality pulp
［Imaging Media Business］
Inkjet paper, products for photography, products forprinting, resin coated base paper, release/casting
paper, electronic industrial materials, and other new
businesses［Speciality Materials Business］
Water treatment membrane support substrate, battery
separators, filters, rewritable media, functional paper,
nonwoven fabrics, and speciality materials［Warehouse and Transport Business］
Warehousing and transport-related business［Other Businesses］
Engineering operations, sports facility management,
insurance agency business, and real estate business⇨Reference site: Corporate Profile/Business Fields
https://www.mpm.co.jp/eng/company/gaiyo.html(as of March 31, 2021)

Main Group Companies
Mitsubishi Oji Paper Sales Co., Ltd.
Kitakami Hitec Paper Corp.
Mitsubishi Paper Engineering Co., Ltd.
Ryoshi Co., Ltd.
Diamic Co., Ltd.
NAMITSU Co., Ltd.
MPM Oji Home Products 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.
Hachiryo Co., Ltd.
Ryoko Co., Ltd.
MPM Operation Co., Ltd.
Kyoryo Chemical Co., Ltd.
Hokuryo Co., Ltd.
Hakuryo Paper Technology Co., Ltd.
MPM Oji Eco-Energy Co., Ltd.
Mitsubishi Paper Holding (Europe) GmbH
Mitsubishi HiTec Paper Europe GmbH
Mitsubishi Imaging (MPM), Inc.
MPM Hong Kong Limited
Zhuhai MPM Filter, Ltd.

● Total number of authorized shares

90,000,000● Total number of outstanding shares

44,741,433● Shareholders

16,225(330 year-over-year decrease)● Composition of shareholders
2.5

March 31,
2021

18.0

March 31,
2020

16.5

March 31,
2019

19.1

43.5

7.1

28.9

44.0

7.8

29.2

2.5

0

10

1.7

20

7.8

45.2
30

40

50

■ Financial institutions

60

70

26.2
80

90

100
（%）

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

58

History and Main Offices and Mills of the Mitsubishi Paper Mills Group
History■ Domestic R&D Facilities

April 1898 Hisaya Iwasaki took over a paper mill operated by the Walsh Brothers in Sannomiya, Kobe, andestablished Kobe Paper Mill Company
June 1901 Moved the mill (currently Takasago Mill) to Takasago City in Hyogo Prefecture
February 1917 Constructed the Nakagawa Mill in Katsushika-ku, Tokyo (closed in March 2003)
November 1917 Incorporated and changed name to Mitsubishi Paper Mills, Ltd.
April 1944 Merged with Kyoto Photographic Industry Company, Ltd. and made it the Kyoto Trial Mill (currently
Kyoto Mill), to produce photographic paper
November 1950 Acquired all stock of a manufacturer and seller of non-wood pulp (currently Toho Tokushu Pulp Co.,Ltd.)
April 1966 Constructed the Hachinohe Mill in Hachinohe City, Aomori
April 1966 Merged with Shirakawa Pulp Industry Ltd. and acquired the Shirakawa Mill (currently Hakuryo Paper
Technology Co., Ltd.) and the Kitakami Mill (currently Kitakami HiTec Paper Corporation)
April 1972 Formed Mitsubishi Paper Sales Co., Ltd. (currently Mitsubishi Oji Paper Sales Co., Ltd.) by merging
Ryosan Shokai with CASIWA Co., Ltd.
April 1992 Formed Diamic Co., Ltd. by merging Yamamoto Shokai with Gekko Shokai
May 1994 Established the subsidiary Mitsubishi Imaging (MPM), Inc. in New York, U.S.A.
November 2007 Established Zhuhai MPM Filter Ltd. in China, and commenced filter product processing in China
April 2008 Established MP Juarez LLC in Mexico, and commenced inkjet paper processing in North America
October 2010 Formed Mitsubishi HiTec Paper Europe GmbH by integrating two German manufacturingsubsidiaries
October 2011 Acquired shares of KJ SPECIALTY PAPER Co., Ltd., a chemical-based paper subsidiary of KohjinCo., Ltd.
March 2016 Established joint venture with Oji Green Resources Co., Ltd. called MPM Oji Eco-Energy Co., Ltd.
April 2017 Established joint venture with Oji Nepia Co., Ltd. called MPM Oji Home Products Co., Ltd.
March 2019 Became an equity-method affiliated company of Oji Holdings Corporation

Takasago R&D Laboratory

Kyoto R&D Laboratory

Process Development Laboratory

105 Sakaemachi, Takasagocho,
Takasago-shi, Hyogo

1-6-6 Kaiden, Nagaokakyo-shi, Kyoto

3, Aza Maeyamanishi, Nishigo-mura,Nishi Shirakawa-gun, Fukushima■ Domestic Production Facilities
Hakuryo Paper Technology Co., Ltd.

Kitakami HiTec Paper Corp

Hachinohe Mill3, Aza Maeyamanishi, Nishigo-mura,Nishi Shirakawa-gun, Fukushima
Principal products: Pressboard

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

Aza Aomoriyachi, O-aza Kawaragi,
Hachinohe-shi, Aomori
Principal products: Printing paper,
white paperboard, and copier paper

MPM Oji Home Products Co., Ltd.
Aza Aomoriyachi, O-aza Kawaragi,
Hachinohe-shi, Aomori
Principal products: Sanitary paper

MPM Oji Eco-Energy Co., Ltd.
35-10 Aza Kaigan, O-aza Kawaragi,
Hachinohe-shi, Aomori
Principal business: Biomass power
generation

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

Main Offices and MillsKJ SPECIALTY PAPER Co., Ltd.

■ Head Office & Branches
Head OfficeOsaka Sales Branch

2-10-14 Ryogoku, Sumida-ku, Tokyo(Ryogoku City Core)

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

59

Mitsubishi Oji Paper Sales Co., Ltd.

Diamic Co., Ltd.

2-10-14 Ryogoku, Sumida-ku, Tokyo(Ryogoku City Core)
Offices: Osaka Office, Nagoya Office, Tohoku Office,and Kyushu OfficePrincipal business: Sale of paper,chemicals, etc.

2-10-14 Ryogoku,Sumida-ku, Tokyo(Ryogoku City Core)
Offices: Tokyo Branch, Osaka Branch, Sapporo Office,Sendai Office, Nagoya Office, Fukuoka Office, plus fiveother sales offices in Japan, and one office overseas
Principal business: Sale of printing plate materials,
information materials and related equipment

Takasago Mill

Kyoto Mill

105 Sakaemachi, Takasagocho,
Takasago-shi, Hyogo
Principal products: Carbonless paper,
thermal paper, inkjet paper,
non-woven fabric products, andspeciality paper

1-6-6 Kaiden, Nagaokakyo-shi, Kyoto
Principal products: Printing platematerials and photo inkjet paper

7-1 Shimbashicho, Fuji-shi, Shizuoka
Principal products: Chemical paper(decorative laminate base paper,
impregnated decorative sheets, basepaper for wallpaper, masking tapebacking, etc.)■ Overseas Production and Sales Facilities
Mitsubishi HiTec Paper Europe GmbHZhuhai MPM Filter Ltd.

(Bielefeld Mill)
Niedernholz 23, D-33699 Bielefeld, Germany(Flensburg Mill)
Husumer Strasse 12 D-24941 Flensburg, Germany
Principal products: Carbonless paper, thermal paper,and inkjet paper

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

Mitsubishi Imaging (MPM), Inc.
555 Theodore Fremd Avenue, Rye, NY 10580
Principal business: Sale of inkjet paper, thermal paper,and products for printing

60