2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026, Japan
URL: https://www.mpm.co.jp/
Contact:
Investor and Shareholder Relations Group, Corporate Governance Division
TEL03-5600-1488 FAX03-5600-1489
Issued September 2023

Mitsubishi Paper Mills Group

Integrated Report 2023

CONTENTS
Introduction
2 Corporate philosophy
3 Table of Contents, Editorial Policy, Our Website
4 Business Overview At a Glance
6 Mitsubishi Paper Mills Group’s Value Creation History
8 Consolidated Financial and Non-Financial Highlights

Corporate philosophy
PHILOSOPHY

10 Message from the President
14 Mitsubishi Paper Mills Group’s Value Creation Process
16 Medium-term management plan (fiscal year ending March2023 to fiscal year ending March 2025)
20 Value Creation Chapter

Growth strategy that creates value
24 Finance director’s message
26 Medium-term management plan progress status andfuture direction
28 Business Strategy by Segment
28 Functional materials business
30 Sustainable Fiber Materials business
32 Research and Developmentthat is always on
the leading edge oftechnology

A corporate groupthat contributes topreserving the global
environment andcreating a recyclingbased society

Data Section
72 Consolidated Financial Statements
76 Company Profile/Company Data

2

Mitsubishi Paper Mills Group

Integrated Report 2023

■ Guidelines Referenced (including but not limited to)International Integrated Report Framework
Value Creation Guidance
GRI Standard
ISO26000
Environmental Reporting Guidelines (2018 Edition), Ministry of
the Environment■ Contact
Mitsubishi Paper Mills Limited
Corporate Governance Head Office Corporate Value Creation Promotion Group, Governance
Department
2-10-14 Ryogoku, Sumida-ku, Tokyo 130-0026, Japan
Tel: 03-5600-1488 Fax: 03-5600-1489
E-mail: csr@mpm.co.jp■ Issued
September 2023

Building a foundation thatsustains the creation of value

A corporate group

34 Promotion of sustainability management
36 Mitsubishi Paper Mills Group’s priority commitments and
ESG initiatives
38 Promotion of sustainability activity report
42 Actions for the Environment
44 Response to climate change
46 Business activity environmental impact reduction
50 Preserving biodiversity
51 Sustainable procurement of raw materials
52 Connections with society, regions, and people
52 Relationship with Employees
53 Occupational Safety and Health Initiatives
54 Human Resources Initiatives
56 Together with customers
58 Social contribution activities/initiatives in local communities
59 Fair business practice
60 Corporate Governance
60 Corporate Governance Framework
62 Board of Directors and Audit & Supervisory Board Members
64 Assessments of the Board of Directors Effectiveness65 Compliance
66 Risk Management
67 Information disclosure and public relations
68 Outside Director Roundtable Discussion
70 Outside Audit & Supervisory Board Member Roundtable
Discussion■ Reporting Period
The reporting period of this report is the fiscal year 2022
(starting from April 1, 2022 and ending at March 31, 2023),
with some content included from outside this period.

Growth strategy thatcreates value

Building a foundation that sustains the creation of value
A corporate groupthat lives up to
the trust of its
customers in theworld market■ Scope
The companies included are Mitsubishi Paper Mills Limited
and its consolidated subsidiaries (12 companies in Japan and
5 companies overseas), as well as its equity-method affiliates(2 companies in Japan).

Value Creation Story

We aim to contribute to society by being activein the world market, maximizing our technologicalcapabilities and helping protect
the global environment.

Value Creation Story

Mitsubishi Paper Mills publishes the Mitsubishi Paper Mills
Group Integrated Report, which summarizes financial andnon-financial information to provide stakeholders with anunderstanding of the Group’s overall business activities. In
these pages, we report on the Mitsubishi Paper Mills Group’s
corporate value building activities which are being performed
to help build a more sustainable society.
Introduction

Mitsubishi Paper Mills Group

Editorial Policy

Our Website
The Mitsubishi Paper Mills website provides a range of
information on subjects that include sustainability and theenvironment, investor relations, products and services, researchand development, basic data on the company, and recruitment.

Sustainability / Environment
Integrated
reports,
corporatereports

SDS / AIS /Analysis test
reportProducts &Services

Research &Development

Investor Relations
Annual Business
ReportFinancial results
management
report materials

Mitsubishi Paper Mills Group Integrated Report 2023

3

Introduction■ Business Overview At a Glance About the Mitsubishi Paper Mills GroupFY2022 Total sales

209,542

Sustainable
Fiber Materials
business

Sales

59,385

Number of Employees

millions of yen

Sales

166,534

4,163

3,095

* The number of employees is the number of active full-time
employees and does not include temporary and seasonal workers.

millions of yen

Overseas Sales Ratio

968

millions of yen

Sales

5,303

Operating income

millions of yen

120%

millions of yen

Bases

Overseas Production and Sales Facilities

8.3%

Sales ratio by region

8

Bases

14,5893

Bases

millions of yen

Sales ratio by regionJapan

132,464

Domestic
R&D
Facilities

7.0%
Growth strategy thatcreates value

millions of yen

Domestic
Production
Facilities

North America

millions of yen

Sales ratio by region

EuropeBasecompanies *As of the end of September 2023

Value Creation Story

17,4591

Mitsubishi HiTec Paper Europe GmbH,Zhuhai MPM Filter, Ltd.,
Mitsubishi Imaging (MPM), Inc.

Asia

40,491

Domestic
Sales
Number of Overseas Bases
Locations36.8 3

FY2022 Operating income

Other
Businesses

17*
peoplemillions of yen

Operating Lossmillions of yen

Number of Main Group Companies

3,171

Operating income

Introduction

millions of yen

Functional
materials
businessmillions of yen

Sales ratio by region

19.3%

63.2%

Domestic Offices and Mills[Head Office][Domestic Sales Locations]

Head Office

Mitsubishi Oji Paper Sales Co., Ltd.
Building a foundation thatsustains the creation of value[Domestic Production Facilities]

Hachinohe Mill, MPM Oji Home Products Co., Ltd.,MPM Oji Eco-Energy Co., Ltd., Kitakami Mill,
Toho Tokushu Pulp Co., Ltd., Takasago Mill, Kyoto Mill,KJ Specialty Paper Co., Ltd.

The Mitsubishi Paper Mills Group is committed to developing and providing products and services
that are useful and safe for society, through its advanced technological capabilities and uniqueinnovations, focusing on function products and Sustainable Fiber Materials. We will continue to fulfill
our social responsibilities, contribute to the realization of a sustainable society, and aim for our own
sustainable growth.

[Domestic R&D Facilities]

Takasago R&D Laboratory, Kyoto R&D Laboratory,
Hachinohe Development Office in the Product Development
Department

Main Businesses of the Mitsubishi Paper Mills Group● Functional non-woven fabrics● Electronics-related● Printing plate material and printing devices● Specialty paper for printing out images● Communication Paper● New businesses and other new products

4

Mitsubishi Paper Mills Group

Integrated Report 2023

Data Section

Functional materials business

Sustainable Fiber Materials business

Reverse osmosis membrane element(using our non-woven fabric)

Inkjet paper● Printing Paper● Heat resistant pressboard● Paperboard●Barricote® and Barrisherpa®

● Household paper● Bleached Kraft Paper

Household paper

Printing Paper

Mitsubishi Paper Mills Group Integrated Report 2023

5

Introduction■ Mitsubishi Paper Mills Group’s Value Creation History
Founding〜1920s

1930s〜1950s

1960s〜1970s

1980s〜1990s

2000s〜earlys〜early 2010s

Late 2010s〜

Rise of the modern paper manufacturingindustry

Transformation during wartime andpostwar construction

Severe economic fluctuations and the expansionof information and communications

Bubble economy and Heisei recession

Growing risks to the environment andcrisis awareness“SDGs” and “carbon zero” becamebuzzwords

Advancement in the photosensitive materials sector
Launch of household paper brandStrengthen development of functional materials
Japan’s first commercialization of FSC® certified
paper

Product development aimed at coexistence
between human and natures
Paper as a sustainable material

As modernization progressed, the demand for
paper increased sharply, and the Walsh brothers
built a pulp mill for cotton rags in Kobe. Demand
for modern Western-style paper increased further
between the Russo-Japanese War and WorldWar I. The company moved from Kobe to the
Takasago Mill, and established the Nakagawa
Mill. The pulp raw material source was changed
from rags and straw to wood, and high quality
paper production was expanded. The company
had a particularly high market share for art paper.

It became difficult to import base paper forphotographic paper (Baryta paper) due to thewar, and domestic production of the material
was highly hoped for. The company succeeded
in developing Baryta paper at its Takasago Mill,
then proceeded with production at the Nakagawa
Mill and merged with Kyoto Photo Industry Co.,
Ltd. (currently the Kyoto Mill.)
Photographic paper became the company’s
signature specialty paper, and the photographic
paper “Gekko V” developed after the war also
gained popularity and became the cornerstoneof the Kyoto Mill.

Thorough cost reduction was essential inorder to respond to drastic market changes, so
we established a new Hachinohe Mill capable ofintegrated mass production of pulp and paper,and the Kitakami Mill solidified its foothold as apulp mill that uses 100% domestic materials.
The Takasago Mill was transformed into amill for manufacturing communication paper for
information communication equipment such as
facsimiles and word processors as they became
more advanced.

As photosensitive material technologies
improved dramatically, our color photographic
paper and direct plate-making system “Silver
Master” became popular both in Japan andoverseas.
To respond to the European and American
markets, we expanded our sales bases in the
US and Germany, and established a production
base in Germany.
The Kitakami Mill, which had been a mill
specializing in commercial pulp, began producing
household paper.

Sales, research, and development work
together to develop a business that develops
functional materials with an awareness ofenvironmental issues (currently the Functional
Materials Division).
We are strongly committed to “environmental
contributions” more than ever, in such forms ascommercializing FSC® forest-certified paper
for the first time in Japan and opening an“Ecosystem Academy” that provides a place forhands-on learning.

Established the “MPM Group Basic Policy
on Sustainability” and “Mitsubishi Paper Mills
Group Environment Vision 2050”
We are developing functional materials that
contribute to resource and energy circulation,
paper and pulp products that can help reduce
waste plastics, and we are selling locally produced
and locally consumed household paper productsthat protect and nurture domestic forests.

Takasago Mill shortly after its founding

Kyoto trial mill (currently the Kyoto Mill)/1944

Hachinohe Mill No. 1 paper machine trial run/1967

Automatic plate-making machine for the Silver Master CP-550

Energy recovery ventilator core and air filters

Reverse osmosis membrane element (using our non-woven fabric)

Takasago Mill No. 1 coater/1918

Nakagawa Mill test room/postwar

Various types of communication paper

Household paper brand “Nakure”

FSC® forest certified copy paper

Paper pack disinfectant solution (first in Japan) and paper straws◦1898
Hisaya Iwasaki took over a paper
mill operated by Walsh Brothers in
Sannomiya, Kobe, and established the
Kobe Paper Mill Company◦1925
Head Office moved from Takasago
City in Hyogo Prefecture to Yurakucho,
Chiyoda-ku, Tokyo

◦1965
Mitsubishi color photographic paper
sales

◦1981
Head Office moved to Yurakucho,
Chiyoda-ku, Tokyo◦2007
Established Zhuhai MPM Filter, Ltd.
in China◦1966
Hachinohe Mill constructed◦1989
Established the local subsidiary Mitsubishi
Paper GmbH in Dusseldorf (West Germany)◦2010
Established Mitsubishi Hitec Paper
Europe GmbH in Germany◦2016
Established a joint venture with Oji
Green Resources Co., Ltd. called MPM
Oji Eco-Energy Co., Ltd.

◦1995
Established the joint venture sales
company Mitsubishi Imaging (MPM),
Inc. in New York (USA)◦2011
KJ Specialty Paper Co., Ltd., achemical-based paper subsidiary of
Kohjin Co., Ltd., becomes a wholly
owned subsidiary.

Growth strategy thatcreates value

Establishing an integrated system from pulp
to paperRapid increase in demand for communication paper

Value Creation Story

Product diversification under raw material control
Expansion into specialty paper and photographic
paper

Introduction

Mitsubishi and the Walsh brothers
From Kobe Paper Mills to Mitsubishi
Paper Mills

Building a foundation thatsustains the creation of value◦1917
Constructed the Nakagawa Mill in
Katsushika-ku, Tokyo (closed in March
2003)
Incorporated and changed name to
Mitsubishi Paper Mills, Ltd.

◦1944
Merged with Kyoto Photo Industry Co.,
Ltd. Kyoto trial mill for photographic
paper (currently the Kyoto Mill)◦1950
Release of photographic paper“Gekko V” (blue-black tone)

Merged with Shirakawa Pulp Industries
Co., Ltd. Shirakawa Site (currently the
Shirakawa Office) and the Kitakami Mill
◦1974
Simple plate-making printing system“Mitsubishi Silver Master” launched◦1997
Started production of household paper
at the Kitakami Mill
Launch of the household paper brand“Nacre”◦2012
Head Office moved to Ryogoku,
Sumida-ku, Tokyo

Data Section◦1901
Moved the mill from Sannomiya, Kobe
to Takasago City in Hyogo Prefecture(currently the Takasago Mill)◦1935
Baryta paper research completed at the
Takasago Mill◦2017
Established a joint venture with Oji
Nepia Co., Ltd. called MPM Oji Home
Products Co., Ltd.
◦2019
Issuance of new shares through third
party allotment to Oji Holdings, Co. Ltd.
The same company’s equity method
affiliates◦2021
Takasago R&D Laboratory opened
FSC®C021528

6

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

7

Introduction■ Consolidated Financial and Non-Financial Highlights
Financial Highlights

Non-Financial Highlights
Cash Flow Status(millions of yen)(millions of yen)

4,000
3,000

209,542

194,575

203,997

1,976

2,000

181,920

3,089

162,325

2,696

1,964
968

1,000
0

-40

-2,000

-636

-914

2019

145,000

10,000110,000

5,000

75,0000-5,0002020

2021■ Operating income

Sales

2022 (FY)■ Ordinary Income

Financial Position

15,50015,000-1,7702018■

180,000

20,000-10,000-2,098-8,979-6,571

2018

2019

2020

■ Cash Flows from Operating Activities-2,5572021-3,5658,5002022 (FY)

1,355.27

979
629

605

992

923
696

720

2018

■ Total Assets

2019

2020

2021

■ Outstanding Interest-bearing Debt

2022 (FY)

1,408.45

1,565.88

1,500

35

33

17.96

24.62

960

900

902

906

2019

2020

■ Earnings per Share (EPS)

2021

2022 (FY)

28.5

29

32.2
32

31.7

500

300

0

0

1.5

1.7

12,000

1.3

10,000

1.0

0.6

1.0

-1.1

0.5

-0.1

-0.8

2018

2019

Operating Income Margin
Equity Ratio

2020

2021

2022 (FY)

6,000

0.5

2020

2021

2022 (FY)

Overseas Sales Ratio
Return on Equity (ROE)*1

2018

2019
EBITDA

2020

94.9

94.5

94.2

94.4

90

2018

2019

2020

2021

2022 (FY)

Annual Paid Leave Acquisition Rate(people)

(%)
100.0

3,676

3,500

3,579

3,384

3,171

80.0
60.0

2,500
2,000

2021

2022 (FY)■ Debt-Equity Ratio (D/E Ratio)*2

4,000

1,000

All Industries

20.0

1,500
0.0

2022 (FY)■ Wastewater

40.0

7,261

1.7

-4.1

8,000

8,240

10

-0.0

2019

3,000

9,255

20

1.3

2018

3,668
1.4

2021

92

4,000

1.6

10,0762020*W aste effective utilization rate = (Waste generated – Final disposal amount)/Waste generated × 100(millions of yen)

1.6

2019

95.9

600

■ Book Value per Share (BPS)

11,801

2.0

2018

98

821

-12.97

2018

2005

94

-30

-60

100

100

Number of Employees
37

30.0

2022 (FY)

Data Section

28.5

8

2021

96
1,000

(%)

30

*1
*2

2020

(%)

1,039

-56.720■ Equity Capital

(%)

-10

2019

Industrial Waste Effective Utilization Ratio

1,646.59

Management Indicators

0

2005

Building a foundation thatsustains the creation of value

500

40

9,493

Growth strategy thatcreates value

1,019

664

0

1,485.64

110

10,352

10.04
1,046

120 119 119

Greenhouse Gas Emissions
1,200

1,000

123 123 122■ Cash Flows from Investing Activities(1,000 tons)

1,500

127

■ Service water usage

(yen)

30

10,822

9,500

2,000

2,094

11,036

10,500

60

2,000

126

120

11,500-2,721

(yen)

2,271

127

12,500

1,698

2,500

2,159

126

125

13,500(100 Million Yen)

2,122

130

15,131

14,50013,014
9,976

Per Share Information

2,328(million tons)(TJ)

19,066

Water Usage/Wastewater Volume

Value Creation Story-1,000-248

215,000

Fossil Fuel-Based Energy Consumption

Introduction

Performance

2018

2019

2020

2021

2022 (FY)* The number of employees is the number of active full-time employees anddoes not include temporary and seasonal workers.

0.0

Mitsubishi

2018

2019

2020

2021

2022 (year)* “All industries’”data are from the Ministry of Health, Labour and Welfare’s
Monthly Labour Survey

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

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

9

Value Creation Story■ Message from the President

Introduction

Towards the Creation of a New Mitsubishi Paper Mills Group
Making a Good Start Toward Achieving the Plan
Our corporate group has started a medium-termof environmentally friendly products that would

management plan and set the slogan of “Creation

contribute to the realization of a safe, comfortable,of New Mitsubishi Paper Mills Group,” from thesustainable society.

fiscal year ending in March 2023. We are promoting

Regarding

the

third

“Transformation

Value Creation Story

As a new-age paper
manufacturing group that
contributes to a sustainable
society, we will take on thechallenge of further increasing
our corporate value.

fora variety of initiatives based on the following threesustainability”, we are working on organizational

basic policies.

transformations in a wide range of areas such as(1) Enhancement of our profitability by “selectionof sustainability, diversity & inclusion, thoroughand concentration” and “expansion of newcompliance, and work style reform, that will be ourbusiness”

basis of business activities.

(2) Contribution to green society

Although the impact of the covid-19 pandemic(3) Transformation for sustainability

subsided in Japan, the fiscal year ending in March

Growth strategy thatcreates value

strengthening corporate governance, promotion

Ryuichi Kisaka

Message from CEO
10

Mitsubishi Paper Mills Group

Integrated Report 2023

of raw materials such as crude oil, natural gas,and “expansion of new businesses”, we concentrate

and wood chips, got higher than we had expected

our resources on faster-growing “functional materials

due to the Russia-Ukraine issue -of which no end

businesses” such as water treatment membrane

is yet in sight- and the prolonged depreciation

support substrates, filters, and battery separatorsof Japanese yen and so on. However, through 3

to expand our core business. In addition, we havetimes of the price revision, various cost reductions

begun measures to improve profitability throughand organizational transformation, we achieved

restructuring.

an operating income of 1 billion yen and sales ofRegarding the second “contribution to green

209.5 billion yen, even though it didn’t meet oursociety”, we are currently promoting activities

target, an operating income of 2.5 billion yen inthat will help conserve and protect the global

the end. We were also able to resume dividends

environment, such as the initiatives to improveto shareholders for the first time in three years,

energy use efficiency for carbon neutrality by 2050,

and I believe we have made a good start towardin addition to the initiatives for “less-plastic” andachieving our medium-term management plan.

Data Section

President and Chief
Executive Officer

Regarding the first “selection and concentration”

Building a foundation thatsustains the creation of value

2023 was a tough year for us because the price“plastic-free” society and the sales promotion

Mitsubishi Paper Mills Group Integrated Report 2023

11

Message from the President

Message from CEO

Strengthen collaboration and informationexchange between departments

Data Section

Integrated Report 2023

plan, and an operating income of 15 billion yen
as well as an operating income margin of 7.5%
or more in the medium, long-term aspirations. We
predict that the situation surrounding our company
will continue to be difficult, but given the potentialof the entire Group, we believe that our current
plans are by no means impossible to achieve. We
are sending a message to our employees that
we will continue to grow into a company that is
worthwhile for our employees to be part of, by notletting up on the increase in profits in this fiscal
year, and by aiming for even greater heights. We
ask for the continued understanding and supportof our shareholders and other stakeholders.
Please look forward to the future of the Mitsubishi
Paper Mills Group.

Building a foundation thatsustains the creation of value

Mitsubishi Paper Mills GroupIn the current fiscal year ending in March 2024,
the second year of our medium-term management
plan, we are forecasting an operating income of
6 billion yen. In the functional materials business,
we will focus on expanding the functional nonwoven fabrics-related business, which is ourpriority field, and expanding sales in electronicsrelated fields, where demand is expected to further
increase. In addition, for imaging media-related
products, where demand is decreasing, we will
strive to maintain sales volume by capturing new
demand such as in label applications and industrial
inkjets, and we will work to improve profitability byreviewing our production system.
In the Sustainable Fiber Materials business, wewill aim to stabilize earnings as early as possible
by maintaining the effects of price revisions,
optimizing our production system, and optimizing
inventory levels, as well as transforming our productportfolio by expanding our lineup of eco-conscious
products.
We believe that the Mitsubishi Paper Mills
Group’s strengths lie in its “product quality” and its“development capabilities” which allow it to quickly
identify market needs and commercialize them.
Even in new fields, we will continue to provide
products that will earn the company a reputation thatsays “we can count on Mitsubishi for high quality.”

The Mitsubishi Paper Mills Group has contributed
to a sustainable society through its business activities.
Regarding “Contribution to Green Society”, which
is a basic policy of the medium-term management
plan, we have established the “Mitsubishi Paper
Mills Group Environment Vision 2050” in order toachieve carbon neutrality as advocated by thegovernment, and we are promoting reductions in
CO2 emissions and energy conservation. We also
participated in the TCFD (Task Force on ClimateRelated Financial Disclosures) consortium andimplemented information disclosure in line with
TCFD recommendations. As part of our initiatives toachieve SDGs, in addition to our participation in the“30 by 30 Alliance for Biodiversity” established by the
Ministry of the Environment, we continue to operate
the Ecosystem Academy, a place where people canexperience and learn about the importance of forests.
Under the same basic principle of “Transformation
for sustainability”, we have enhanced careeradvancement training to develop human resources,
promoted work style reform, and strengthened
external communication using video posting sites.
In particular, in terms of human resource utilization,
we are promoting an increase in the ratio of hiringof women and the employment of foreign nationals.
Increasing the number of women in executive andmanagerial positions will give young employees
a sense of fulfillment and energize the company.
We also believe that with the utilization of foreign
employees, we can utilize innovative ideas bornfrom different cultures in marketing, such as in new
product development.
Finally, we are aiming for an operating income of
7.5 billion yen in the fiscal year ending in March 2025,
the final year of the medium-term management

Growth strategy thatcreates value

12

Providing unique value through highquality and development capabilities

Response to the demands of a new era

Value Creation Story

In the fiscal year ending in March 2023, wehave embarked on our largest-ever structuraltransformation. In the functional materials business,
we will establish a new Research and Development
Planning Office in Kyoto on April 1, 2023, and wehave established a system to carry out development
and production in collaboration with the Kyoto Mill,
Takasago Mill, and KJ Specialty Paper Co., Ltd.
In the Sustainable Fiber Materials business, we
decided to sell the Flensburg Mill in Germany inJanuary 2023. Meanwhile in Japan, we reorganized
our management structure to centrally control
our production activities across the three sites ofHachinohe Mill, Kitakami Mill, and Toho Tokushu
Pulp Co., Ltd. We have also established a system
in which we conduct our business through closer
information exchanges.
In the sales department as well, we integrated
Diamic Co., Ltd. Into Mitsubishi Oji Paper Sales Co.,
Ltd., consolidating the Group’s sales agents into
one company. Through this, we will promote sales
optimization for the entire Group, regardless of field.

The aim of these structural transformations is
not only to reduce costs, but also to promote
communication between departments and change
our organization into one that can generatesynergistic effects. We believe that the results of allthese will be clearly visible starting this year.

Becoming a paper manufacturing group that contributes toa sustainable society

Introduction

Establishing a system that allows the group to demonstrate its
comprehensive strengths

President and Chief Executive Officer

Mitsubishi Paper Mills Group Integrated Report 2023

13

The Mitsubishi Paper Mills Group is committed to developing and providing products and services that are
useful and safe for society, through its advanced technological capabilities and unique innovations, focusing
on functional products and Sustainable Fiber Materials.
We will continue to fulfill our social responsibilities to the realization of a sustainable society, and aim for ourown sustainable growth.

Value Creation Story■ Mitsubishi Paper Mills Group’s Value Creation Process
INPUT
Manufactured Capital

A corporategroup that lives up
to the trust of its
customers in theworld market◎ Number of group companies: 17(Domestic: 12/overseas: 5)◎ Production volume:
About 687,000 tons/year◎ Capital investment amount:
About 4.5 billion yen

Human Resources
Diverse human resources capableof creating diverse solutions◎ Number of employees 3,171 people･ Domestic: 2,318 people･ Overseas: 853 people

A corporategroup that contributes
to preserving the global
environment andcreating a recycling
society

External Environment

Resource energy
shortageSocial / Relational Capital

Response to humanrights issues

Building a sustainable supply chain
and brand value

Deepening and developing the functional
non-woven fabric related business●Business expansion inelectronics-related fields●

Further expansion of otherfunctional materials businessPrevention of marine
plastic pollution

Well-organized financial management

227.1 billion yen◎ Net Assets
72 billion yen◎ Net Interest-Bearing Debt 99.2 billion yen

2030 Target forEnvironment Vision 2050

Energy origin CO2 Emissions

Realization of carbon
neutrality, whichenables net zero
greenhouse gas
emissions.

P.18

●

●

Support for the TCFD
recommendations
and information
disclosure⇨ Reduction in fossil fuel use

Expansion of pulp business[Investors]

Structural changes in our
production and sales systems

P.19

●

Appropriate disclosure of information and communication[Global Environment]●

Environmental impact reduction●

Response to climate change issues
Diversity & inclusion●

Promotion of work-life balance by transforming the way we work●

Deliver products and services that promote a sustainable society[Local Community]

Actions of SDGs
Maximize value forthe shareholders,increase capital
P.19●

Strengthening corporate
governance●

Promotion of sustainability●

Observance of compliance●

Diversity & inclusion●

Transformation of
the way we work
P.19

Materialities (priority issues)｜Creating social value
Build a work environment that prioritizes
safety and takes diversity into accountWe will strive forgoals such as thesustainable managementof forests, and we willcontribute to the creationof a recycle-oriented
society to maintain our
precious global
environment

Help the local regions develop through social contribution activities

Economic ValueManagement goals forthe fiscal year ending
March 2025
Sales

Medium to longtermAspiration

195 billion Yen 200 billion yen[Sales ratio]

2.5:1(Sustainable Fiber
Materials:
Functional products)

Coexistence with the global environment

Preserving biodiversity[Customers]

Transformation forsustainability

Develop products and services
that are useful and safe for society

●

●

●

Contribution togreen society

Build a businessmodel that can achievesustainable growth byutilizing biomass
resources andcreating leadingedge technologies[Employees]

2023-2025

Carbon neutrality
by 2050 and target
for 2030⇨ Energy saving promotion◎ Value delivered to our stakeholders

Medium-term management plan●

40% reduction

Strengthening the revenue
base of Sustainable Fiber
Materials business
Expansion of eco-conscious
products

Earning power enhancement
through “selection andconcentration” and “newbusiness expansion”
strategies◎ Total Assets

Heightened awarenessof ESGs and SDGs●

◎ Main sales destination countries Morethan 19 countries◎ Corporate brand power that is always on
the leading edge of technology

Financial Capital◎ Environmental value

1:1

Operatingincome7.5 billion Yen 15 billion Yen

Operatingincomemargin

3.5% or greater 7.5% or greater

D/E Ratio••

Sustainable Fiber Materials 2%
Functional products 7.5%

1.0 times

Deliver sustainabilitypromoting products
and services to
the global market••

Data Section

Decrease in working
population due to aging

Sustainable Fiber
Materials Business

●

1,236

(Patent rights, utility model rights, design
rights and trademark rights)◎ Research & development expenses 800 million yen◎ Three R&D facilities near the production sites

Social Value

Building a foundation thatsustains the creation of value

Accumulated technological foundation
for creating distinctive values◎ Total number of industrial property rights

Risks to theenvironment

Functional Materials
Business

Sustainable forest resources including
domestic materials that coexist withthe local communities

Intellectual Capital

Harmonization with theinternational community

2013 Annual ratio

Natural Resources･ Wood chip usage 946,000 BDT･ Water intake 119 million tons
･ Owned forest area About 2,000 ha･ Environmental conservation costs
About 2.9 billion yen

Act with integrity and comply
with laws and regulations

Growth strategy thatcreates value

A corporate groupthat is always on
the leading edge oftechnology

Achieving diverse solutions byleveraging the characteristics
of each of our operating sites

Thorough crisis
management

Value Creation Story

We aim to contribute tosociety by being activein the world market,
maximizing ourtechnological capabilities
and helping protect the
global environment.

Establish a solid businessfoundation by accelerating
business portfolio transformation

OUTCOME

Introduction

Corporate Philosophy

OUTPUT

Materialities (priority issues)｜Strengthening the management base

Sustainable Fiber Materials 5%
Functional products 10%

0.5 times

Maximize value for the shareholders, increase capital

14

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Mitsubishi Paper Mills Group Integrated Report 2023

15

Value Creation Story

Medium-Term Management Plan
(fiscal year ending March 2023 to fiscal year ending March 2025)

Management goals in the medium-term management plan, and our ideal state

Basic Policy 1

Changes in the people’s way of life caused by the COVID-19 pandemic led to the advancement ofdigitalization and accelerated a decline in the demand for paper. In order to cope with such changes in
the market, it is also necessary to change our business structure to strengthen our revenue base at an
unprecedented speed. To do so, we set a slogan of “Creation of a new Mitsubishi Paper Mills Group,” andstarted a medium-term management plan from the fiscal year ending March 2023 to the fiscal year endingin March 2025.

We will invest heavily in the faster-growing “functional materials businesses”, such as functional nonwoven fabric, electronics-related products including battery separators and electronics industrial materials
and industrial specialty paper, to achieve a steady growth in sales and profit and make these one of our corebusiness segments.
With regards to existing business centered around the Sustainable Fiber Materials business, we will makeit the core of our business that generate stable revenue by pursuing the potential of pulp and Sustainable
Fiber Materials, seeking a broad range of applications and transforming our business structure through aprocess of selection and concentration.
Through these efforts, we will fully update our business portfolio and enhance our earning capacity.

Medium, long-term aspirations

195 billion yen

Sales

Operating Income

7.5 billion yen

Operating Income

15 billion yen

OperatingIncome Margin

above

OperatingaboveIncome Margin

3.5%

D/E ratio

0.5 times

Medium-term management plan (from fiscal year ending March 2023 to fiscal year
ending March 2025) basic policies

Functional Materials Business

Sustainable Fiber Materials BusinessRestructuring

Operating income
margin target

Operating income
margin target

Profit improvement
effect target

10%

5%

1 Billion Yen

With the general demand for
paper decreasing, we will
ensure the steady increase ofsales and profit by intensive
investment to our ever-growing“functional materials business,”
and make it one of our corebusiness segments.

We will change our existing
businesses, focusing on“Sustainable Fiber Materials
business,” to make it amore stable profit-earning
infrastructure business througha process of selection andconcentration.

In addition to the left, we will
do restructuting, etc. by theend of the fiscal year ending inMarch 2025

Building a foundation thatsustains the creation of value

1.0 times

D/E ratio

7.5%

Transforming the business portfolio

Growth strategy thatcreates value

200 billion yen

Sales

Value Creation Story

Management goals for the fiscal year ending March 2025

Introduction

Financial Goals

Enhancement of our profitability by “selection and concentration” strategies and “expansion of new business”

Basic Policy 1

Basic Policy 2Contribution to green society
Basic Policy 3Transformation for sustainability

16

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Integrated Report 2023

Basic Policy 2Contribution to green society

Data Section

Enhancement of our profitability by “selection and concentration”
strategies and “expansion of new business”

In addition to and the sales promotion of environmentally friendly products that would contribute to asafe, comfortable, sustainable society “less-plastic” and “plastic-free” society, we will engage in activities forcontributing to green society, such as carbon neutrality by 2050.

Basic Policy 3Transformation for sustainability

We will transform our organization in order to promote various initiatives such as the promotion ofstrengthening corporate governance, the promotion of sustainability, the observance of compliance withlaws and regulations, diversity & inclusion, and work style transformation.

Mitsubishi Paper Mills Group Integrated Report 2023

17

Medium-term management plan (fiscal year ending March 2023 to fiscal year ending March 2025)
Business Strategy>

1

Deepening and developing the functional non-woven fabric related business

Additional sales of 2.5 billion yen in the functional non-woven business that
contribute to safe, comfortable and sustainable society. (7.5 billion yen in the fiscal
year ending March 2022 → 10 billion yen in the fiscal year ending March 2025)◇ E xpanding the business on growing global market of water treatment
business utilizing our advanced production technology in the
production of the non-woven fabric◇ Developing functional membrane market with specialty fiber non
woven
RO membranecross section

Concentrate

Polysulfone membrane

Fresh Water

Water treatment membrane
support substrate

Business Strategy

2● Entering new market segments of non-woven fabrics◇ Market development of super heat-resistant glass fiber nonwoven fabric under the concept of the fire and heat resistance,
non-flammable, and lightweight◇ Expansion of our business domain through the entry into the(dry) melt-blown non-woven fabric market and the developmentof functional filter media, etc.

Additional sales of 2.0 billion yen in the battery separators and electronic industry
business. (1.5 billion yen in the fiscal year ending March 2022 → 3.5 billion yen in thefiscal year ending March 2025)
Exploded view ofa capacitor● Electronic industrial materials business with specialty
DFR* as a bridgehead◇W ith the system of high development technology acquired by extensive
experience with photographic sensitive materials, we will expand thescale of processing business for parts processing of electronics-relatedmaterials as information and communication technology advances.

Separators• Separation

Electrodesof positive
and negativeelectrodes• Retention ofelectrolyte* DFR: Dry film resist>

3

Further expansion of other functional materials business

An additional 5.5 billion yen of sales of other functional materials business suchas the industrial specialty paper area by the expansion of product lines and new
product development● Sales expansion of KJ Specialty Paper Co., Ltd. product◇ KJ Specialty Paper Co., Ltd. will increase sales by utilizing
our quality-advantage for the tape base paper for decorative
laminates and masking tape backing, where the foreign market
demand is expected to grow further.

18

Mitsubishi Paper Mills Group

Integrated Report 2023

● Structural change in production and sales systems◇
Optimizing production system including streamlining facilities
according to energy-saving and demand, promoting drastic
systematization including reorganization of subsidiaries, andchanging to a sales policy focusing on profitability, i.e. streamlining
the brand, etc.

● Expansion of eco-conscious products◇ Expansion of kraft paper, which is in strong and steady demand for
paper bags of e-commerce and takeout bags at restaurants etc.
◇ E xpansion of barrier paper against a backdrop of the accelerated
movement towards “less plastic” and “plastic-free” products following
the enforcement of new plastic laws in Japan in April 2022

[Application examples of our barrier paper]
DO Cacao chocolate of LOTTE CO., LTD.

Business Strategy

5

Contribution to green society● Kitakami Mill new business development◇ At the Kitakami Mill, we will accelerate the shift in business focus
from market-shrinking imaging field to industrial materials fieldby retooling and remodeling current facilities and developing new
products such as industrial process paper.

<FY 2030 Target><Mitsubishi Paper Mills Group Environment Vision 2050>

Decrease in energy-related CO2 emissions by
40% from 2013 ⇒ Promotion of energy saving ⇒Reduction in fossil fuel use

Contribution to the Japanese government’s long-term
goal, “decarbonized and carbon neutral society by 2050,
which enables net zero greenhouse gas emissions.”● Support for the recommendations of the TCFD andinformation disclosure● Actions of SDGs
◇ P articipation in “30 by 30 Alliance for Biodiversity” established by◇ Support for the recommendations of the TCFD, participationin TCFD Consortium◇ Carrying out scenario analysis of climate-related risks and opportunities,
information disclosure based on TCFD recommendations

Business Strategy

6

Japanese Ministry of the Environment◇ Contribution to the creation of sustainable society by continued
implementation of “Ecosystem Academy”

Transformation for sustainability● Strengthening corporate governance◇ Building up a system of governance meeting thePrime Market standards of TSE◇ Appropriate disclosure of information◇ Good communication with outside directors● Promotion of sustainability◇ Creation of sustainability promotion committee◇ Promotion of corporate-wide activities involving a director in chargeof sustainability promotion●Diversity & inclusion◇ D evelopment of personnel systems, which takes advantage of Diversity◇ Reallocation of human resources, which offers flexibility with thechanging external environment◇ Enrichment of career advancement training● Observance of compliance◇ Extensive training, cultivation of corporate culture◇ Improvement of the effectiveness of the whistle-blowing system◇ Building up credibility with stakeholders

Data Section

Business Strategy◇ An increase in sales of pulp for external sales through productline expansion, coping with shrinking demand for graphic paper.

Building a foundation thatsustains the creation of value◇ Starting the operation of No. 13 paper machine at the Takasago
Mill, we will expand the scale of business for vehicles, energy
saving and communication equipment.

● Expansion of pulp business● Carbon neutrality by 2050 and FY 2030 Target

Business expansion in electronics-related fields● Battery separator business (new paper machine in operation)- From “paper” to “materials” - Explore the potential of pulp and Sustainable Fiber
Materials, and open up wide-ranging applications

Growth strategy thatcreates value>

Polyamide membrane◇ Expansion of Energy Recovery Ventilator (ERV) cores businessin parallel with the growth of global demand for ERV, which canachieve ventilation for indoor ventilation and energy saving forconserving the environment

Strengthening the revenue base of Sustainable Fiber Materials business

Value Creation Storyr

Salt Wate● Filter business>4

Introduction● Water treatment membrane support substrate businessBusiness Strategy● Work style reform◇ Improvement of work efficiency, work hour reduction throughreviewing human resources allocation◇ Strengthening the system of occupational safety and health◇ Helping employees to balance work with parenting and nursing
care, introducing staggered working hours/working from homesystems◇ Introduction of shared-desk style at the Head Office

Mitsubishi Paper Mills Group Integrated Report 2023

19

Value Creation Story

Chapter

01
Introduction

Relentless pursuit of the quality that our customers demand

Expansion of the water treatment membrane
support substrate business and battery
separator business

Battery separators

Value Creation Story

Reverse osmosis
membrane element(using our non-woven fabric)

Growth strategy thatcreates value

Mitsubishi Paper Mills Group

Integrated Report 2023

Water treatment membranes are a general term for separation membranes that
separate and remove impurities contained in water, and they are used in situations
such as seawater desalination, industrial water purification, sewage treatment plants,
and water purifiers. The water treatment membrane support substrate is a type of
support material that adds strength to separation membranes that are not strong
enough on their own. The separation membrane is coated on the substrate. In order tomaximize the characteristics of separation membranes, quality requirements for water
treatment membrane support substrates are extremely high. We will continue to live
up to our customers' expectations by utilizing the uniform wet-laid nonwoven fabricmanufacturing technology that we have cultivated through manufacturing and sales.
In addition, we have developed water treatment membrane support substrates using
special fibers with properties such as heat resistance and chemical resistance, andexpanded the range of supply to fields such as food, beverages, and pharmaceuticals.
The water industry is also expected to continue to grow in the future, and we willcontinue to expand our water treatment membrane support substrates business.

We manufacture and sell wet non-woven fabric separators that are thin
yet strong for use in lithium-ion batteries, electric double-layer capacitors,
and solid electrolytic capacitors used in automobiles, telecommunications
equipment, and other products. In the field of electric double layer capacitors,
market demand for thinner products is increasing due to the growth indemand for smart meters, wind power generation, and UPS. In the field ofsolid electrolytic capacitors, market demand for higher heat resistance isincreasing due to the growth in demand for automobile electrification and IT
communications. In addition to refining the manufacturing technology of thin,uniform, and high-strength wet-laid non-woven fabrics cultivated through the
manufacture and sales of various separators, we will further improve reliable
heat resistance and capture the growing demand by meet the expectations
from battery and capacitor manufacturers. The newly installed paper
machine exclusively for separators at the Takasago Mill has started operationin December 2022, and with a stable supply system established, we willcontinue to expand our battery separator business.

Separators(wet-laid nonwoven
fabric)Solid electrolytic
capacitors

Data Section

20

Battery separator business

Building a foundation thatsustains the creation of value

Water treatment membrane support substrate (back)and reverse osmosis membrane element (front)

Water treatment membrane support substrate businessElectrodes
Expanded view of a capacitor

Mitsubishi Paper Mills Group Integrated Report 2023

21

Value Creation Story

02

Chapter

In 2019, a German subsidiary created “barricote®”, a coatedpaper for packaging with barrier and heat-sealing properties,
and major brands in Europe began using it as an alternative
to plastic. At the same time, we started work introducing“barricote®” into Japan, but we then found out that the product’s
existing characteristics differed from those desired by domestic
users and that the technology needs to be further developedin Japan. Therefore we started to develop the technology
domestically at both our Hachinohe and Takasago Mills in orderto develop the Japanese version of “barricote®”.
In 2021, “barricote® J HS WGOM” with heat sealability andhigh barrier properties (water vapor transmission rate 5g/m2
or less, oxygen transmission rate 5cc/m2/day or less) wascompleted.
In 2022, the characteristics of “barricote®”were recognized,
and it was adopted as the packaging material for Lotte Co.,
Ltd.’s new product, “DO Cacao chocolate.” “DO Cacao
chocolate” retains its characteristic rich cacao aroma throughthe barrier properties of “barricote®”, which has been highly
praised and will continue to be used in the 2023 model of the
product.

Within the health care category, our company is particularly
focused on research and development of technologies forcryopreservation of oocyte and embryos using liquid nitrogenfor the field of assisted reproductive technology (ART).
Starting with joint research with Kitasato University, we havecommercialized “Diamour®”, a device for the cryopreservationof oocyte and embryos for research, which makes it possible
to easily and automatically adjust the volume of preservation
solution by leveraging the absorption technology cultivated withinkjet printing paper. “Diamour®” is designed for ease of use inevery aspect, not just with its ability to absorb preservation fluid,
and has been well received by embryologists.
In addition, we have proposed to the market a “closed” typedevice that can cryopreserve oocyte and embryos without
direct contact with liquid nitrogen, which is attracting attention
from the perspective of infection control.
Our company will continue to contribute to the developmentof assisted reproductive technology (ART).

* According to our research (as of April 2023)

2023 World Star Award WinnerWorld Star Award Ceremony(Germany)

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Mitsubishi Paper Mills Group

Integrated Report 2023

In the “World Star Contest” sponsored by the WPO (World
Packaging Organisation), a packaging material that combines
barricote® and an environmentally-friendly water-based inkjet
printing technology won the World Star Award.

Livestock cryopreservation system
In order to provide a stable supply of high-quality livestock
products, improve productivity, and stabilize livestock
management, cryopreservation technology and embryo transfer
technology for internally and in vitro fertilized eggs are becoming
important in the domestic livestock industry.
Our company is actively conducting research anddevelopment in collaboration with external research institutes
on freezing technology and simple transplantation technology
for livestock eggs and embryos.

Suction removal ofas much excess
storage solution as
EmbryoEmbryopossible
Preservation
Preservation
solutionsolution[Existing methods][Method using Diamour]Preservation
solution

Automatically absorbed
Embryo Preservation
Embryosolution
Preservation
Embryosolution

Absorption layer

Absorption layer

Absorption layer

Schematic diagram of a research oocyte/embryo
vitrification device that can automatically adjust
the volume of storage solution

Microscopic
observation image
during automaticstorage solution
adjustment(absorption)

Data Section

A vitrification device for oocyte and embryosthat contributes to the development ofassisted reproductive technology (ART)

Building a foundation thatsustains the creation of value

Packaging materials using barricote® havebeen evaluated as sustainable barrier
packaging materials that do not require
plastic film.

“barricote®” J HS WGOM is the only coatedpaper in Japan* with barrier and heatsealing properties for packaging.

Growth strategy thatcreates value

DO Cacao chocolate of LOTTE CO., LTD.
All of the packages are made of paper,and the outer bag uses barricote®.

Oocyte/embryo
cryopreservation technologies

Value Creation Story

Plastic alternative
materials project03

Introduction

Chapter

Value Creation Story“Diamour®” vitrification device forresearch oocyte and embryos

Mitsubishi Paper Mills Group Integrated Report 2023

23

Growth strategy that creates value■ Financial Officer Message
Two business divisions that generate
stable profits

Medium-term management plan result for the fiscal year ending March 2023 (first year of the plan)(Unit: million yen)

Sales
OperatingincomeOrdinary
IncomeProfitattributableto owners ofparentFY2022/3
FY2023/3
actual results actual results

FY2024/3
plan

181,920

209,542220,000

▲248

968

6,000

1,964

3,089

6,500

1,096

▲571

4,000

<By segment>(Unit: million yen)

Sales<Consolidated>

Functional
materials business
Sustainable Fiber
Materials business
Other
Adjustment
Consolidated total*E arnings forecast for the fiscal year ending March 2024<based on the following assumptions>Exchange rate: 135 yen/USD, Crude oil price (Dubai):
80 USD/barrel, Coal price: 200 USD/ton

Functional
materials business
Sustainable Fiber
Materials business
Other
Adjustment
Consolidated total

FY2022/3
actual results

FY2023/3
actual results

FY2023/3
actual results

FY2024/3
plan(Old segment)(Old segment)(New segment)(New segment)

50,24959,385

109,967

115,000

141,703

166,534

101,668

107,000

7,020▲17,052
181,920

5,303▲21,680
209,542

5,303▲7,397
209,542

5,000▲7,000220,000

2,973

4,163

3,176

4,200

▲3,208▲3,095▲2,423

1,700

75
▲88
▲248

120
▲219
968

120
95
968

100
0
6,000

Data Section

increase in profits include steady growth in products likebattery separators and electronic materials, as well as
strong sales of inkjet paper due to factors such as therecovery of public events.
On the other hand, the financial result of the
Sustainable Fiber Materials business was very poorat a loss of 3.095 billion yen, although the amount ofloss was 113 million less than that of the previous fiscal
year. The German business, which was a major factor in
the segment’s overall deficit in the previous fiscal year,
recovered profitability due to the effects of product pricerevisions, but in Japan, price revisions have not beenable to keep up with the soaring prices of raw materials
and fuel, resulting in a large deficit.
While the fiscal year ending in March 2023 was not
a very good year for us in terms of financial figures, wehave grown the functional materials business during
the year and also have made progress with the Group’s
organizational transformations including the sales of ourFlensburg Mill in Germany and the integration of ourdomestic subsidiaries, which will lead to cost reductionin the coming years. We believe that the fiscal year
marked our beginning of a solid path toward improved
profitability in the future. Over the current fiscal year
ending in March 2024, the impact of these efforts will be
more visible in financial figures.

Building a foundation thatsustains the creation of value

The last fiscal year, the one ending in March 2023,
started amid rising global raw material and fuel prices
and an uncertain economic outlook, with the additionof Russia’s invasion of Ukraine to raw material and fuelprices, which had been on an upward trend to startwith. As the year progressed, our production costs
were greatly affected by the continued high prices ofraw materials and fuel due to the prolonged war andthe rapid deprecation of the yen. In addition, with regard
to the impact of the COVID-19 pandemic, recovery has
progressed in Japan, Europe, and the United States while
economic activity in the Chinese market has stagnated
due to its zero-COVID policy. This has had an impact onsales, especially in the functional materials business.
To navigate through such a difficult business environment,
we revised the prices of all products to cope with the soaring
prices of raw materials and fuel. As a result of this and also a
number of various cost-cutting efforts we implemented, we
achieved a consolidated operating income of 968 million
yen. Although this did not reach the previously announced
target of 2.5 billion yen, it was a significant improvementfrom the previous year’s loss of 248 million yen in that weare now back in the black.
Looking at the results by segment, profit in the functional
materials business increased by 1.19 billion yen year-onyear to 4.163 billion yen. Factors contributing to such

Growth strategy thatcreates value

A year that paved the way for our profitability and growth

Operating income

Director andSenior Executive Vice President

As mentioned in the President’s comments, we wereable to resume dividends in the fiscal year ending inMarch 2023 for the first time in three years. In regard
to dividends from retained earnings, etc., we view the
return of profits to all of the shareholders as an importantmanagement subject and make it our basic policy to keep
paying dividends stably while comprehensively taking into
consideration the performance in respective fiscal years
and internal reserves for allowing the implementation of
future management measures. However, although weprioritize the continuation of stable dividends, we donot believe that this level is sufficient. We plan to carryout management while being conscious of capital costs
and the stock price. By increasing our profit level, we
will make growth investments centered on functional
products, further improve our financial position, andwork to steadily increase returns to our customers.
A major feature of our Group is that we create productsthat address environmental and social issues such as
the use of biomass resources and the effective use ofwater treatment, filters, and electricity. Our products andbusiness activities themselves are directly linked to therealization of a sustainable society. Providing productsthat meet the demands of the times will also lead to thesustainability of our Group. We would like to enhance
our presence as an environmentally conscious company
that will be the standard for the coming era and meet the
expectations of our stakeholders.

Value Creation Story

Shigeharu Sanada

Increase the value of our existence as anenvironmentally conscious company

Introduction

In order to achieve the goals of themedium-term management plan, we will
try to increase the operating income by
5 billion yen to make this a year that willtake us to the next stage

The company’s business results for the current fiscal
year ending in March 2024 are forecast to be 220 billion
yen in sales, 6 billion yen in operating income, and 4
billion yen in profit attributable to owners of parent. An
operating income of 6 billion yen is a goal that we havenever reached in the past 10 years, but we believe it isa very achievable figure given that we generated a profitof 2.293 billion yen in the fourth quarter of the fiscal year
ending in March 2023 alone.
The functional materials business is expected to havean operating income of 4.2 billion yen. The functional
materials business has become a business that generates
the most stable operating income for us due to growthin functional non-woven fabrics such as water treatment
membrane support substrate and battery separators. In
addition, we are expanding into new fields, such as thegrowth of electronic materials. With regards to the German
business, which was transferred from the Sustainable
Fiber Materials Division from this fiscal year, the sale of
the Flensburg Mill is scheduled to be completed during
the first half of the fiscal year. From now on, we will focus
on improving the efficiency of the remaining Bielefeld Milland turn it into a business that can generate stable profits.
The Sustainable Fiber Materials business is expected
to have an operating income of 1.7 billion yen. This fiscal
year, domestic price revisions will become widespread,and profit and loss will improve significantly. In addition,
the rise in profit levels resulting from the capital andbusiness alliance with Oji Holdings has contributed to
improved profitability, and as long as raw material and fuelprices as well as product sales prices are balanced, we
will have a structure in which we can generate sufficientprofits. Furthermore, we will continue to reorganize our
product mix within the segment by developing uniquepackaging papers that contribute to the elimination andreduction of plastics.

* The following segment changes will be implemented from April 2023••

24

Mitsubishi Paper Mills Group

Integrated Report 2023

Sustainable Fiber Materials → Functional materials: Information including German business • Specialty paper products
Functional materials → Sustainable Fiber Materials: Kitakami Mill materials (base paper for photographs, etc.)
Mitsubishi Paper Mills Group Integrated Report 2023

25

Growth strategy that creates value■ Medium-term management plan progress status and future direction(fiscal year ending March 2023 to fiscal year ending March 2025)

Medium-term management plan initiatives undertaken during the fiscal year ending March 2023
Basic Policy

1Enhancement of our profitability by “selection and concentration” and “expansion of new business”

Sales system efficiency

We integrated Diamic Co., Ltd. into Mitsubishi Oji Paper Sales Co., Ltd., and sales agents wereconsolidated into one company

Consolidation of Production
Facilities

Decided to transfer the Shirakawa Site’s heat resistant press board to the Takasago Mill

Organizational systemization•D ecided to sell the business of our mill in
Flensburg, Germany<Main production base segment>

FY 2024 target (the last fiscal
year in the current MM Plan)[Sales]
FY 2021 actual (the last fiscal
year in the previous MM Plan)

2021

2022

2023

◇ Filters
Expanding energy recovery ventilator cores toEurope and the United States[Sales]
FY 2021 actual (the last fiscal
year in the previous MM Plan)

2024 (FY)(estimation)•H achinohe Paper processing Co., Ltd. And
Hachiryou Industry Corp. merged into MPM
Operation Co., Ltd.

Hachinohe Mill

Kyoto Mill
Takasago MillKJ Specialty Paper

Kitakami Mill

Functional Materials Division

Basic Policy

2

2022

2023

2024 (FY)(estimation)

Contribution to green society◦Launched the YouTube channel “Green Webcast” to introduce our products and events under the themeof “Green” and to disseminate information on “Ecosystem Academy” activities◦CO2 emissions reduction/energy savings promotion◦Implemented information disclosure in line with TCFD recommendations◦Participation in the 30 by 30 Alliance for Biodiversity established by Japanese Ministry of the Environment◦Contributing to the creation of a sustainable society through the Ecosystem Academy program

Growth strategy thatcreates value• S egment changes - Information and specialty
paper products (including our business inGermany), which are paper products withspecial functions, were transferred to the
Functional Materials Division, and Kitakami
Mill products, which have an integrated factoryfrom pulp, are transferred to the Sustainable
Fiber Materials Business Department.

Sustainable Fiber Materials
Business Department

2021

FY 2024 target (the last fiscal
year in the current MM Plan)

Value Creation Story•M erged the Kitakami HiTec Paper Corp. andHokuryo Industry Corp. into our company.

◇ Water treatment membrane support substrate
Recovery of the Chinese market and expansion
to Europe and the United States

Introduction● Selection and Concentration<<Deepening and developing of functional non-woven fabric related business>>● New business expansion<<Business expansion in electronics-related fields>>

Basic Policy

FY 2024 target (the last fiscal
year in the current MM Plan)[Sales]
FY 2021 actual (the last fiscal
year in the previous MM Plan)◦Introduction of a head office system to improve governance, strengthen collaboration between related
departments, and strengthen company-wide control functions including each mill and subsidiary◦Enhance career advancement education to develop human resources◦Strengthening communication outside the company using video posting sites
FY 2024 target (the last fiscal
year in the current MM Plan)[Sales]
FY 2021 actual (the last fiscal
year in the previous MM Plan)

2022

2023

2024 (FY)(estimation)

2021

2022

Management policy and future direction for the fiscal year ending March 2024

2023

2024 (FY)(estimation)<<Expansion of products that address social issues>>◇ Paper straws
Adopted as an alternative to plastic straws

26

Mitsubishi Paper Mills Group

Integrated Report 2023

◇ Cryopreservation device (Diamour)Adopted as a cryopreservation device forresearch eggs and embryos that contributes tothe development of reproductive medicine

Data Section

2021◇ Electronic industry
materials
Expanding our adoptionof advanced technology
cultivated by photosensitive
materials

Transformation for sustainability
Building a foundation thatsustains the creation of value◇ Battery separators
New paper machine
starts operation tofurther increase
production

3

We make our functional material business the core of our business by increasing its sales and profit
steadily through concentrating our resources on the area, such as a new R&D planning department
and intensive allocation of human resources to R&D. Additionally, we keep carrying out restructuring
for more profitability. In terms of contribution to a green society, we have decided to participate in the
GX League, and we will accelerate our efforts to reduce CO2 emissions. Regarding Transformation forsustainability, we will continue to promote organizational change, including strengthening corporate
governance by increasing the number of full-time corporate auditors, and promoting diversity &inclusion by appointing female external directors and female external corporate auditors.

Mitsubishi Paper Mills Group Integrated Report 2023

27

Business Strategy by Segment

Kunihiro Nakagawa

Functional materials businessDirector, Managing
Executive Officer
Functional Materials
Division General
Manager

59,385 million yen (year-on-year up 18.2%)
Operating income 4,163 million yen (year-on-year up 40.0%)

Sales

Integrated Report 2023

Exh

Fresh warm(or cold) air

Dirty cold
(or warm) air
Outd

ir

rn a

u
Ret

t air

aus

air

oor

Dirty warm(or cold) air

air

Fresh cold
(or warm) air

Business expansion in electronics-related fields
Our company’s dry film resist products are marketed mainly to Japan,
South Korea, Taiwan, and China as resists for parts processing thatspecialize in niche strategies for high-value-added products, and we
aim to become the top domestic manufacturer in this global niche. In
addition to the communications device field, we will move forward withbusiness expansion in the electronics-related field by entering the fuelcell-related, automotive-related fields such as EV and FCV, where themarket is expected to further expand. Our Kyoto No. 10 coater (coatingmachine), which began commercial operation in 2020, is a multi-coater
suitable for thick film coating and small lot/short delivery times.

Bipolar plate for fuel cell stacks

Refining and exploring the inkjet businessIn the inkjet business, existing applications such as photographs,
proofs, and signs are reaching maturity, and we are working to improve
production and sales efficiency. Furthermore, we are developing
sublimation printing transfer paper that contributes to environmental
impact reduction, and we are developing inkjet paper that is compatible
with industrial high-speed inkjet printing machines. We will also work to
improve the profitability of the inkjet business by exploring applications
and markets, such as developing overseas markets to capture demand
for switching from silver halide photographic paper to inkjets in Asia
and Africa.

Pictrico Shop & Gallery

Data Section

Mitsubishi Paper Mills GroupIn the functional materials business for the
fiscal year ending in March 2023, sales of battery
separators, electronics-related products suchas electronic industrial materials, base paperfor decorative laminates, and tape base paper
exceeded the previous year, but sales of air filters,
water treatment membrane support substrates,
and wallpaper were lower than the previous year.
The sales amount of lining paper was lower thanthe previous year.
With regards to imaging media-related products,
the sales volume of printing plate materials andphotographic base paper decreased, but the sales
amount exceeded that of the previous year due
to overseas sales expansion of inkjet paper, sales
price revisions, and the impact of foreign exchange
rates. As a result, the functional materials businessas a whole posted increased sales and profits.

ply

Building a foundation thatsustains the creation of value

28

Sales and profits increased despite soaring
raw material and fuel prices

Sup

OutdoorGrowth strategy thatcreates value

In the Functional Materials Division, R&D centers
are attached to the Kyoto Mill and the Takasago Mill,
which are development-oriented mills. KJ Specialty
Paper Co., Ltd. and the Bielefeld Mill in Germany
also have a system that integrates R&D, production,and sales. We have already completed the expansionof our production facilities, and in addition to ourhigh quality and development capabilities, we havealso improved our ability to respond to customers
by taking advantage of the features of our facilities,
which are our strengths. In order to deepen andexpand our functional non-woven fabric business, wewill further advance our water treatment membrane
support substrate business to meet the increasing
demand for water business overseas, and our filter
business such as with energy recovery ventilator
cores that can achieve both indoor ventilation andenergy conservation as environmental measures.
We will focus on developing new applications alongwith this. In electronics-related fields, we will focus
on expanding the scale of our battery separator
business using new paper machines that are alreadyin operation, and by expanding our electronics
materials business by applying technologies wehave cultivated with photosensitive materials. KJ
Specialty Paper Co., Ltd. will further expand its fieldof industrial specialty papers such as decorative
laminate base paper and tape base paper.
The Functional Materials Division is a departmentthat handles many “non-paper” products in ourcompany, which is a paper manufacturer. For thatreason, we will always listen to our customers’
voices and promote our business in a style thatdevelops products that reflect their needs.

This fiscal year, in functional non-woven fabricrelated business, we will acquire new users forwater treatment membrane support substrate,
expand into special membrane fields such as food,beverages, and medical care, and expand sales ofheat-resistant non-woven fabrics. In electronicsrelated products, we will focus on expanding salesof electronic industrial materials, including power
storage separators for automobiles and special dry
film resists, for which the demand of is expected
to increase. For imaging media-related products,
by capturing new demand such as in label
applications and industrial inkjets, we will work to
improve profitability.

ERV core element
IndoorValue Creation Story

Integrating everything from research to
production and sales as a development-typebusiness

Ventilation with Energy Recovery Ventilator (ERV) is an excellent
ventilation system that can achieve both ventilation, which can prevent
infectious diseases and maintain a comfortable space, and energy saving
for environmental measures by recovering the energy (temperature andhumidity) of the exhausted heated or cooled indoor air to the outdoor
air taken into the room, and the demand is growing worldwide. We
manufacture and sell ERV cores, which are the important components
responsible for energy recovery. We are expanding our business by
expanding sales in the North American and European markets with a
new lineup of ERV paper cores, which are resistant to cold climateswith little condensation, and ERV polymer cores, which can be washedwith water and used hygienically.

Introduction

We will work to expand our products anddevelop new products centered on functional
non-woven fabrics and electronics

Expansion of Energy Recovery Ventilator core (ERV core) Business

Main Product Introduction● Functional non-woven fabric related● Electronics-related● Printing plate material and printing devices● Specialty paper for printing out images● Communication paper● New businesses and other new products

Air filters

Mitsubishi Paper Mills Group Integrated Report 2023

29

Business Strategy by Segment

Sustainable Fiber
Materials businessYuji Takagami
Director, Managing
Executive Officer
Sustainable Fiber
Materials Division
General Manager

166,534 million yen (year-on-year up 17.5%)
Operating Loss 3,095 million yen (year on year – )Sales

For packaging paper, which is expected to continue to have strong
demand, we have started selling it as “Bleached Paper Coat N FSC®
certified-MX”, which is coated on one side and is based on bleachedkraft paper.
We offer a lineup of FSC®-certified papers that can contribute to SDGs,
and as the products are both environmentally friendly and excellent forink color development and smoothness, they are increasingly being
used in paper bags and various packaging materials.

Looking back on the fiscal year ending in March 2023
Various paper bags

Structural change in production and sales systems case study
We merged our sales companies, Mitsubishi Oji Paper Sales Co.,
Ltd. and Diamic Co., Ltd., and we transferred the sales functions ofMitsubishi Paper Mills to Mitsubishi Oji Paper Sales Co., Ltd. Throughthe changes, we aim to improve the efficiency of sales function,
maximize the effects of the merger, and strengthen the integrated
operation of business divisions and factories.
In addition, to optimize production facilities, we have decided totransfer heat resistance pressboard production facilities from Shirakawa
Site (Fukushima Prefecture) to Takasago Mill (Hyogo Prefecture). It willlead to improved profitability through the consolidation of production
sites and the acceleration of related products development at Takasago
R&D center attached.

Data Section

Looking back on the fiscal year ending in March
2023, which was affected by a sharp rise in raw
material and fuel prices, sales volume decreasedin the domestic market, mainly for printing paper
where demand continued to decline, but the sales
amount increased, partly due to the effect of pricerevisions. In exports, both the sales volume andamount have recovered to a certain extent.
For commercially available pulp, domestic
product prices were revised in response toincreased costs due to higher raw materials andfuel prices, and exports increased in both volume
and amount, partly due to the effects of having aweaker yen.
In the German business, while the sales volume
was lower than the previous year, the sales amountincreased as a result of sales price revisions in
response to soaring prices of raw materials andfuel, mainly in natural gas and pulp prices.
As a result, while the Sustainable Fiber Materials
business as a whole was significantly affected bysoaring prices of raw materials and fuel, sales andprofits increased due to price revisions. This fiscal
year, we will continue to maintain the effects ofprice revisions, optimize our production system,and optimize inventory levels.

Building a foundation thatsustains the creation of value

As the name suggests, the Sustainable Fiber
Materials Business Department is expanding theuses of paper materials into various fields. We
believe that the keyword is the global trend ofmoving away from plastics. barricote®, a coatedpaper for flexible packaging launched in 2021,
is currently just beginning to be used by a major
confectionery manufacturer and a major cafe chain.
In the future, we aim to make it a popular productthat can be used in a variety of fields. In addition,
we plan to expand the sales of “unbleached” kraft
paper as a new lineup item, targeting overseas
markets that prefer naturalness. The demand forprinted paper is on the decline in Japan, but thedemand is increasing in India and Southeast Asian
countries, where the economic growth is making apromising market. We are also expanding sales ofour popular product, New V Matt, for use in printing
fields, aiming at wealthy overseas countries.
Although we will have a difficult time competingwith Chinese and Korean companies in terms of

Eco-conscious products case study

Growth strategy thatcreates value

Promoting superiority of quality andenvironmentally friendly products

Conifer log
Value Creation Story

In order to be environmentally friendly, themovement to eliminate plastics and reduce plastic
consumption is accelerating around the world.
Sustainable Fiber Materials have the great potential
as alternative materials to eliminate and reduce
plastic. First, in the packaging field, we will work
together with our R&D division to build up barriercoated paper, kraft paper, and other products
as a bridgehead for our future Sustainable Fiber
Materials business.

price competitiveness, we would like to emphasize
our superiority with high quality and productdevelopment capabilities. Starting this fiscal year,
we have established an overseas business sectionin (Mitsubishi Oji Paper Sales) our comprehensive
sales subsidiary company, Mitsubishi Oji Paper
Sales Co., Ltd. We will work closely with ourOverseas Business Management Department toexpand sales while analyzing overseas markets.

Introduction

We have remodeled the pulp manufacturing equipment at our
Kitakami Mill and started producing and selling bleached kraft pulp
(NBKP) made from 100% domestic softwood.
Kitakami Mill had been producing and selling bleached kraft pulp
(LBKP) made from 100% domestic hardwood until now. In addition
to expanding our pulp business, we are also making effective use of
local domestic woods such as hardwoods, thin softwoods, thinned
wood, and construction scraps. Through them, we are contributing to
the revitalization of the local forestry industry and the development of
the local economy.

Pursuing the potential of paper as materials
and promoting the development of a wide
range of applications

Challenges and prospects for the Sustainable Fiber Materials
business, the keywords are “plastic-free” and “less plastic”

Pulp business expansion case study

Main product introduction● Printing Paper● Paperboard● Household paper● Heat resistant press board● barricote® / barrisherpa®
● Bleached Kraft Paper

barricote®

FSC®C021528
30

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

31

Business Strategy by Segment

Research & Development

Laser thermal-sensitive film

Towards further business expansion
We will develop products that support the next 10 years of ourfunctional materials business and sustainable fiber materials business
Wakana Aizawa

Director, Managing Executive Officer
Research and Development Division
General Manager

Research and Development Division Deputy
General Manager
R&D Planning Division General Manager

Recycled carbon fiber non-woven fabric

Planting the seeds for new business while
meeting high quality demands

Integrated Report 2023

Aizawa In order for the research and development
department to contribute to achieving the medium-term
management plan, it is most important to develop productsthat meet the high demands of customers for “quality”
and “development speed”. We will respond to market
changes that are getting more severe year by year withan organizational system strengthened through structuralreform.
Nakagawa We will enact flexible measures such as
forming alliances with other companies if necessary.
Aizawa Another important thing is that we have a mission
to plant the next seeds for new business expansion. We
began developing dry film resists, battery separators, andwater treatment membrane support substrates more than
10 years ago. It takes a lot of time for a product to become
recognized and generate stable profits. The Research andDevelopment Division must undertake development withan eye on the next 10 years and launch products that will
support the new Mitsubishi Paper Mills Group.
Nakagawa In that sense, it is very important that our
research and development department and our production
department work together. We exchange information on adaily basis not only with the three mills in Kyoto, Takasago,and Hachinohe, where research and development
departments are located on the premises, but also with
Kitakami, KJ Specialty Paper, and Germany, and we
promote research and development that is sensitive tomarket demand. Please look forward to our upgradedresearch and development department.

Carbon fiber non-woven fabricSolder resist*-thinning system
The electronic circuit industry is booming worldwide due to theacceleration of digital transformation and the introduction of highcapacity, high speed communication technology, and the demand forhigher density and higher integration of circuit boards is increasing. We
are proposing our unique solder resist thinning system technology to
our customers to meet this demand. With this processing system, it ispossible to form a solder resist layer tiers, and we can stably produce
the board shape requested by our customers.
* Solder resist: An insulating layer that covers the surface of a printed
circuit board and protects the circuit pattern.

Copper pad

Solder resist

Solder resist thinning processing system
Data Section

Nakagawa The Research and Development Division
launched the Research and Development Planning Officein April 2023. This division supports both the functional
materials and Sustainable Fiber Materials Devision withaspects such as research and development planning, market
information gathering, human resource development,
technology sharing, and progress management, andpromotes research and development from a company-wide
perspective. The Kyoto Imaging & Healthcare Laboratory
and the Takasago Nonwoven Materials Laboratory forthe functional materials business, and Sustainable Fiber
Materials Development Department in the sustainablefiber materials business, which has a Hachinohe Officeand Research and Development Planning Division, work
together to promote efficient product development.
Aizawa This fiscal year, in accordance with our mediumterm management plan, we will concentrate our development
resources on the functional materials business. Among our
focus, we will focus on dry film resists, which are increasing
their presence in niche fields, and battery separators, whichhave their demand increasing in the EV and IT fields. In addition,
we will continue to develop water treatment membrane
support substrates, which have business opportunities in awide range of areas, including China, Europe, America, andthe Middle East. Furthermore, as an environmentally friendly
product, we are currently developing “Water Thermal”, alinerless thermal label with a rewettable adhesive.
Nakagawa Meanwhile, in our Sustainable Fiber Materials
business, in order to contribute to a green society, weare collaborating with a subsidiary in Germany to develop
coated paper for packaging that will contribute to theworldwide trend of reducing and eliminating plastic. In

The demand for carbon fiber as a composite material imbued withresin is increasing in fields such as airplanes, wind power generation,
and automobiles, but carbon fiber emits a large amount of CO2 during
manufacturing. Furthermore, because carbon fiber is difficult to recycle,
the environmental impact of the entire life cycle is considered to be high.
In order to solve the problems mentioned above, our company
is leveraging non-woven papermaking technology that we havecultivated over the years.We are investigating the technology andpractical application of recycled carbon fiber non-woven fabric as C/Ccomposites (carbon fiber reinforced carbon composite materials).

Building a foundation thatsustains the creation of value

addition, we have begun searching for new uses for pulp
materials. These research and development items are only asmall part of our focus.

Growth strategy thatcreates value

New Research and Development Planning Officeestablished in Kyoto
Investing resources in the functional materials business

Mitsubishi Paper Mills Group

Laser thermal-sensitive film
Value Creation Story

32

Kunihiro Nakagawa

Introduction“TRF-IR830” is a plate-making film used to create manuscripts forprinting plates. Unlike silver halide film, images can be formed without
the use of any chemicals since high-density images are formed througha heat-sensitive reaction created through laser drawing.
In addition, this is an eco-conscious product that significantly
reduces environmental impact, eliminating issues associated withconventional dry-type plate-making films, such as plate-making issues
caused by carbon dust, and the effects on the health of workers. We
are developing products that can contribute to the realization of sucha green society.

Dialogue Interview

Research and development / Structural reform
In 2020, we launched the Research and Development Division
to flexibly develop new products, provide technical support, andoptimize human resources in all business fields, formulate researchand development themes in line with management strategy, andoptimize the allocation of research resources. In addition, by locating adevelopment team on the premises of the mill where production takes
place, we have established a system that allows us to smoothly carryout research and development of related products and provide technicalsupport, accelerate development, and reliably contribute to the profits
of each business field. We are working on future-oriented researchand development themes, and aim to build a powerful research anddevelopment system that supports the company’s profits.

Plan

R&D Division
Development

SupportMitsubishi Paper Mills Group Integrated Report 2023

33

Building a foundation that sustains the creation of value■ Promotion of sustainability management

Shigeharu
SanadaThe Mitsubishi Paper Mills Group views ISO 26000, aninternational standard for organizational social responsibility,
as a common indicator for promoting sustainability andpromotes activities in each field.
In this integrated report, we note the following as activities
being done for the “seven core subjects” and “issues” of ISO
26000.

Director andSenior Executive
Vice President

Our company’s business to create a sustainable society

Environment
Fair Business PracticeConsumer Issues
Community Involvement
and Development

34

Mitsubishi Paper Mills Group

Integrated Report 2023

Sharing of environmental data with
suppliers and customers
Holding explanatory meetings for investors
Enhancement of internal communications
Dialogue with the local community
Issue of the Integrated Reportand other documents
Provision of information via the Internet

ESG

Core subjects🅖Organizational Governance

Sustainability Corporate Governance

Human Rights

Compliance, Risk Management, Promoting Social Responsibility in the Value Chain, Sustainable
Procurement of Raw Materials, Relationship with Employees, Relationship with Society

Labor Practices

Compliance, Risk Management, Relationship with Employees

Fair Business PracticeInformation Disclosure, Fair Operating Practices, Relationship with the Environment,
Working with Customers

Consumer Issues

Compliance, Fair Operating Practices🅢🅔Community Involvement
and Development
Environment

Board of Directors
President
Sustainability Promotion Committee
Promotion Committee Chair: President
Promotion Officer in Charge: Vice President
Promotion Committee: Officers, Factory Managers/Office Managers, Head Office Managers,
Presidents of Group Affiliated Companies
Supervising Office: General Affairs & Legal Department General Affairs Group

Customers

Corporate Governance Head Office• General Affairs Department• Personnel Department• Governance Department• Information Systems Department

Employees
National andMunicipal Governments
Local Communities
NGOs/NPOs

Response to TCFD, Responsible Procurement of Raw Materials, Relationship with the Environment

In order to promote corporate group management with an emphasis on sustainability, we have appointed
a director and established the Sustainability Promotion Committee, chaired by the President, to oversee theGroup’s sustainability promotion activities (compliance, risk management, human resources management,
safety and health, environment, product safety and product quality, human rights and labor, information
disclosure and public relations, social contribution, climate change, etc.) across the organization.

Corporate Department/Technology Division

Suppliers

Preserving Biodiversity, Relationship with Society

Sustainability Promotion Structure

Stakeholders

Shareholders

Item

Planning and Management Head Office• Corporate Planning Department• Overseas Business Management Department• Raw Materials Department• Accounting Department
Technology Division• Technology Department• Safety, Environment and Quality Assurance Department

Main Sustainability Initiatives
Compliance
Risk management• Human resource management• Safety & health

Environment
Product safety• Product quality• Human rights and labor

•

•

•

•

Information disclosure andpublic relations• Social contribution• Climate change•

Annual Sustainability Promotion Activities Plan
Materialities (priority issues)• Action Plan (targets)• Initiative items (specific initiatives)•

Data Section

Labor PracticeCommunicating with customers

Environment

Building a foundation thatsustains the creation of value

Human Rights

Timely and appropriate information disclosure

FairbusinesspracticeLabor
practices

Growth strategy thatcreates value

Organizational governanceprovide the world with high-value-added products thatsolve issues using cutting edge technologies, such as
electronic industrial materials that contribute to society’s
future, and the cryopreservation device “Diamour®” thathelps solve the problem of the declining birthrate.
In this way, our business activities themselves arestrongly connected to promotion of sustainability activities,
and we are proud to be a “company at the center ofrealizing a sustainable society”. We believe that responding
to the various needs of society through our core businesswill improve our corporate value over the medium to longterm, and ultimately lead to the return of better profits to our
Stakeholders.
This fiscal year, we not only revised our “Sustainability
Basic Policies”, but also reviewed our materiality andaction plans in line with the medium-term management
plan and revision of our Corporate Behavior Charter.
All group executives and employees share the spirit of“being part of a company at the center of promoting
sustainability” and align their vectors to three points
that we will take as the most important actions, thoseare: “Development of products that are useful and safe
for society”, “Response to climate change issues”, and“Enhancing activities to ensure safety and health”, toprotect and prioritize employees, who are the source ofcorporate value.

Organizational
GovernanceValue Creation Story

Our company positions promotion of sustainability as
an important management commitment and establishedthe “Sustainability Basic Policies” (see page 36) in April
2023.
In our basic policies, our company’s strengths of“utilization of biomass resources” and “creation of
cutting-edge technology” are the essence of building
a business model that can achieve sustainable growth.
We also aim to build a recycling-oriented society throughmethods such as forest management, and to provide
the world with products that contribute to a sustainable
society.
As a paper and pulp business, we utilize wood as abiomass resource, and we actively use wood, mainlyin the Tohoku region, to protect and nurture Japan’s
forest resources, regenerate forests, and develop theforestry industry. In addition, in response to the recent
global trend towards reducing and eliminating plastic,
we are actively promoting the development and sale ofkraft paper and barrier paper products that can replace
plastic.
In the functional materials business as well, we offer
water treatment membrane support substrates that
contribute to securing safe and secure water, filters thatprovide a safe and comfortable air supply, and battery
separators that contribute to the effective use of electricity
as well as the ever-expanding information society. We

ConsumerissuesHumanrightsIntroduction

We will contribute to the realization of a sustainable
future by growing our core business, which is
directly connected to environmental protection
and solving social issues

Community
involvement
anddevelopment

ESG/ISO26000 and Mitsubishi Paper
Mills Group’s Initiatives

A company in the middle of promotionof sustainability

Business Department/Research and Development Division
Functional Materials Division
Planning and Management Department• Functional Materials Sales Department
Sustainable Fiber Materials Business Department• Planning and Management Department• Sustainable Fiber Materials Sales Department
Research and Development Division• Research and Development Planning Office• Takasago R&D Laboratory• Kyoto R&D Laboratory• Product Development Department• Intellectual Property Department•

Mitsubishi Paper Mills Group Integrated Report 2023

35

Building a foundation that sustains the creation of value■ Mitsubishi Paper Mills Group’s priority issues and ESG initiatives
Sustainability Basic Policies

Process for Defining Issues

The Mitsubishi Paper Mills Group strives to grow sustainably by creating social value and to contribute to
the realization of a sustainable society through its business activities.

Coexistence with theglobal environment

S
E

G
Corporate
Governance

Act with integrity andcomply with laws andregulations

Relationshipwith Society

S• Response to climate change issues• Environmental impact reduction andpreserving biodiversity

Environmentand services
Top Priority Action Plan

• Development of products that are usefuland safe for society• Through observance of compliancefair corporate activities• Respect for human rights

S

Thorough crisis
management

G

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

The Sustainability Promotion Committee,
a cross-organizational body, verified the
propriety of our process for determining
issues and established key issues andtop priority issues through discussions
held at meetings of the Board of
Directors.

Objectives (FY 2030)

Relatedpages① Reduce energy-derived CO2 emissions by 40% (compared to 2013) ② Reduce an equivalent of 80,000 t of coal per year through energy saving
and fuel conversion initiatives (compared to 2021) ③ Establish a system to quantitatively understand Scope 3 CO2 emissions. Formulation andimplementation of CO2 reduction measures for the entire supply chain, ④ Compliance with the standards required as of 2030. In addition, we will
disclose significant information in response to climate change issues.

P44-45① Effective utilization rate of waste 98.4% ② Recycling rate 100% ③ Continuation of 1% reduction from the previous year (water usage, BOD,
COD, SS, SOx) ④ CDP target score Climate Change: A, forests: A ⑤ Make the company-owned forest a place where people can gather as aplace for hands-on forest environment learning ⑥ Number of experiential learning events: 36/Forest surveys/research-Results announced on thewebsite/number of pieces of information disseminated: 24 Eco Academy Activities: Creating a place where local people can connect with each other tocreate a sustainable society• Continue to operate the legal monitoring system and reduce the occurrence of legal violations to zero
• Number of product safety accidents: 0• Number of A-class quality incidents: 0

P56-57

Environment/Consumer
Issues① FSC®-certified sales volume 11,500 t per month ② Environmentally friendly products sales ratio 16.5%, Environmentally friendly products
sales: 33,000 million yen per year ③ Promote activities if they contribute to our company’s profits ④ Milestone of the country’s plastic resource
circulation strategy: By 2030, we aim to reduce single-use plastic emissions by 25% and achieve a reuse/recycling rate of 60%, building a world where
paper packaging is a common choice

Human Rights
Labor Practices
Fair business practice• Build a system that allows necessary information to be conveyed in a timely manner to the departments/persons in charge who need it• Build and operate a strong legal compliance system and eliminate the occurrence of legal violations• Build and operate a legal compliance system that covers the entire group and eliminate the occurrence of legal violations
Instilling a company-wide awareness of respect for human rights and constantly implementing human rights with due diligence

P52• Stakeholders• Enhancement of communications

Fair business practiceCommunity Involvement
and Development① Disseminate product information and corporate activity information in a timely and effective manner, and convincingly appeal to stakeholders about
our sustainability activities ② Enhance information dissemination to stakeholders by using the booklet and the web together (Survey: negativeevaluation 1.0% or less) ③ Continue to be a presence needed by a local area at each site

performance improvement)• Establishing a risk management structure

Organizational GovernanceFair business practice

P50

P65

①,② Conformity to the standards required of companies in the market in which the Company is listed (assuming the prime market)①,② Build a governance system that will enable the Group to grow autonomously③ Meet the standards within the Group that maintain a high level of governance and conduct consistent promotion of sustainability activities

Human Rights
Labor Practices

P31

P59

Organizational Governance• Diversity & inclusion (Human resource

P46-50Consumer Issues• Strengthening of corporate governance•E nhancing activities to ensure safety and healthP42-43

P51

Top Priority Action Plan

A work environment thatprioritizes safety
and takes diversity into
account

Analyze the situation of our Group in each
aspect of ESG. We summarized the issues
by referring to ISO26000, GRI, SDGs, etc.,
and understood the status of initiatives foreach issue.

• FSC® certification chip quantity 200,000 BDT or more (reflecting the spread of FSC® certification and an increase in the proportion of our certified
products)• Domestic materials ratio of 25% or more (maintaining domestic materials, which are gradually decreasing, with a focus on softwood chips)• Sustainable procurement of raw materials• Ensuring quality and safety of products

Verify the propriety ofthe process

P60-65
Data Section

Transformation for sustainability

S

Top Priority Action Plan

Establish key issues and toppriority issues to satisfy theneeds of society

Building a foundation thatsustains the creation of value

Products that are usefuland safe for society
and service development

Relationship with the EnvironmentE

ISO 26000 Core Subjects

Ascertain the circumstances
surrounding the Mitsubishi
Paper Mills Group

Growth strategy thatcreates value

Contribution to green society

Action Plan

Step 3

Value Creation Story

Materialities (priority issues)

Step 2Introduction◆ Build a business model that can achieve sustainable growth by utilizing biomass resources andcreating leading edge technologies.
◆ We will strive for goals such as the sustainable management of forests, and we will contribute to
the creation of a recycling society to maintain our precious global environment.
◆ Provide products and services that contribute to a sustainable society to the global market.

Step 1

P68-71

P58
P67• Number of deaths/serious accidents: 0• Occupational accident frequency rate: 50% decrease compared to 2020

P52-53• Establishment of a remuneration system commensurate with role and work skills• Human resources information system management for all domestic consolidated companies• Securing and assigning human resources within consolidated group companies (right people in the right places)

P54-55

Build risk response capabilities and improve the sustainability of our GroupP66

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Building a foundation that sustains the creation of value■ Promotion of sustainability activity report(Activity results and goals related to ESG initiatives)

E

Sustainable procurement of raw materials

E

Response to climate change issues Top Priority Action Plan

Objectives(FY2030)❶ FSC® certification chip quantity 200,000 BDT or more (reflecting the spread of FSC® certification
and an increase in the proportion of our certified products)❷ Domestic materials ratio of 25% or more (maintaining domestic materials, which are gradually
decreasing, with a focus on softwood chips)
Initiative Items

FY 2022 Activity Results❶
・Promotion of initiatives to achieve CO2 reduction targets
・Promotion of energy conservation and fuel conversion
at each factory through measures taken by a companywide CO2 reduction task force, undertaken at the factory
manager’s meeting

Decrease in energy-related CO2 emissions by
23.9% (from 2013)❷
・① R
 eduction of coal usage in the Hachinohe Mill throughcompany-wide CO2 reduction task force measures
・② Energy saving promotion①C oal equivalent 55,795 t per year reduction(from 2021)
Coal consumption in 2022 193,464 t② Energy saving 3.4% (from 2021)① Coal equivalent 46,000 t per year reduction(from 2021)② Energy saving target 1.0% (from 2022)❸ Build a method to quantitatively calculate Scope 3 CO2emissions, which are not currently calculated

Investigate the calculation method for Scope
3 CO2 emissions

・Continued investigation of the Scope 3 CO2emissions calculation method
・Continue to investigate commerciallyavailable accounting systems and consider
the possibility of introducing them

❹ Response to TCFD

Decrease in energy-related CO2 emissions
this year by 23% (from 2013)
Target emissions reduction:
67,600 t of CO2 per year (from 2021)

TCFD meets disclosure standards that will be
required in 2023

Environmental impact reduction and preserving biodiversity

Initiative Items

FY 2022 Activity Results

FSC® 120,000 BDT❷ Domestic wood chip usage promotion

Domestic materials ratio: 28.4%

Domestic materials 25%

Ensuring quality and safety of products and services
Objectives(FY2030)

FY 2022 Activity Results

FY 2023 Activity Plan

❶ Legal Management related to Chemical Substances・Monitoring domestic and international laws and regulations to ensurecompliance with chemical substance management laws and regulations
・Continuously manage the latest versions of chemical substances subject
to chemical substance management guidelines in compliance with various
laws and regulations by updating the internal company chemical substancemanagement database・Sharing information on related laws and regulations through monthly
product safety reports

The chemical substance management
internal company database is
updated every three months. Startof dissemination of monthly productsafety reports

・Continuation of monitoringof domestic and internationallaws and regulations
・Update of the internal
company database・Product safety monthly reportdisseminated every month❷A chieved zero product safety accidents through product safety audits(on-site/written) and regular meetings of the safety committee andsubcommittee (twice a year)

Number of product safety accidents: 0
Product safety audits are written audits
Regular meetings of the Product Safety
Committee and Subcommittees

Number of product safety
accidents: 0❸ Improving the quality control system through holding company-wide quality
meetings and on-site quality audits, and ensuring horizontal dissemination of
past problems

Number of class A quality incidents: 8(1st half: 7, 2nd half: 1)

Number of class A quality
incidents: 4 (halved compared tothe previous year)

E

S

Industrial Waste Effective Utilization Ratio
Company-wide 7 mills: 95.0%❷ Compliance with the Act on Promotion of Plastic
Resource Recycling (Issued April 2022)

Recycling rate: 89.7%

Recycling rate: 94.1%(Hachinohe 50%, other 6 mills 100%)❸ Management of internal company target items

Water usage amount: 2.5% reduction yearon-year
BOD/COD: 6.6% reduction year-on-year
SOx: 0.8% increase year-on-year
COD: 1.6% increase year-on-year

1% continuous reduction year-on-year(Water usage, BOD/COD, SOx, SS)❹ External environmental evaluation improvement:
CDP evaluation improvement

CDP score
Climate Change: C, Forests: B

CDP target score
Climate Change: B−, Forests: A−❺ Preserving Biodiversity, Response to TNFD・Joined the 30 by 30 Alliance for Biodiversity
established by the Ministry of theEnvironment
・Started preparation to apply for certification
as a natural coexistence site (tentative name)

Implementation of hands-on forest
environment learning using company-owned
forests and acquisition of a Nature Symbiotic
Site (tentative name) certification① Number of experiential learning events: 27② Forest surveys/research③ Number of pieces of information
disseminated: 9 internally, 8 on YouTube① Number of experiential learning events: 30② Forest surveys/research-Reports: 2③N
 umber of pieces of information
disseminated: 12

Development of products that are useful and safe for society Top Priority Action Plan

Objectives(FY2030)❶ FSC® certification sales volume 11,500 t per month❷ Environmentally friendly products account for 16.5% of company-wide sales, environmentally friendly
product sales: 33,000 million yen per year
❸ Promote activities if they contribute to our company’s profits❹M ilestone of the country’s plastic resource circulation strategy: By 2030, we aim to reduce single-use plastic emissions
by 25% and achieve a reuse/recycling rate of 60%, building a world where paper packaging is a common choice
Initiative Items

FY 2022 Activity Results

FY 2023 Activity Plan

❶ FSC certification paper sales volume maintenance・Under the circumstances where the use of cheap noncertified Asian chips is increasing due to cost reduction,
FSC® certification paper sales volume maintenance

FSC® certification sales volume target 10,000 t permonth, actual 9,983 t per month, 98.8% vs. the plan,
94.3% vs. the previous year

FSC® certification sales volume 10,000 t per month❷ Expand sales of existing environmentally friendly
products and develop new ones

Environmentally friendly products account for 10.0% ofcompany-wide sales, environmentally friendly productsales: 20,971 million yen per year, 107.7% vs. theprevious year

Environmentally friendly products company-widesales ratio 11.0%
Environmentally friendly product sales: 24,252 million
yen per year, 115.6% vs. the previous year

❸ Gathering information and searching for new
products through participation in CLOMA(Clean Ocean Materials Alliance)

Collection of recycling evaluation methods mainly inEurope. Sharing information to realize recycling of
paper-plastic composite materials in Japan

Continued participation in the CLOMA Working
Group
Attendance rate of 100% at regular WG meetings❹ While listening to customer requests, we will expand
our unique products with environmentally friendly
characteristics

・Bali Sherpa adopted by Doutor
・Continued use of Barricote® for Lotte DO Cacao
repeat sales in 2023
・Commercialized TRF-IR830, a process-lessplate-making film for flexo-printing

Number of commercialization projects due to thefollowing measures: 4 types
・Acquired track record in the food packaging fields
・Expansion into overseas and non-food packaging
fields・Expansion of process-less plate-making film lineup®

Data Section

Industrial Waste Effective Utilization Ratio:
94.4%❶ Continue to operate the legal monitoring system and reduce the occurrence of legal violations to zero
❷ Number of product safety accidents: 0❸ Number of A-class quality incidents: 0
Initiative Items

FY 2023 Activity Plan

❶ Waste effective utilization ratio improvement❻ Promoting activities of the Ecosystem Academy thatleverages collaboration with local communities

FSC® authentication chip quantity 200,000 BDT

Building a foundation thatsustains the creation of value❶ Industrial waste effective utilization ratio 98.4%❷ Recycling rate 100%
❸ Continued reduction of 1% compared to the previous year (water usage, BOD, COD, SS, SOx)
❹ CDP target score Climate Change: A, Forests: A❺ Make the company-owned forest a place where people can gather as a place for hands-on forest environmental learning❻ Number of experiential learning events:36 / Forest survey/research-Results announced on the website/number of pieces
of information disseminated: 24
Eco Academy Activities: Creating a place where local people can connect with each other to create a sustainable society

Objectives(FY2030)

FY 2023 Activity Plan

❶ FSC® forest authentication material procurement

S

Express support for TCFD recommendations
and conduct initial information disclosure. Jointhe TCFD Consortium

FY 2022 Activity Results

Growth strategy thatcreates value

E

FY 2023 Activity Plan

Value Creation Story

Initiative Items

Introduction❶ Decrease in energy-related CO2 emissions by 40% (from 2013)❷ Reduction of an equivalent of 80,000 t of coal per year through energy saving and fuel conversion initiatives (from 2021)❸ Establish a system to quantitatively understand Scope3 CO2 emission amounts. Formulation and implementation of CO2
reduction measures for the entire supply chain❹ Conformity to standards required as of 2030. In addition, we will disclose significant information in response to climate change issues.

Objectives(FY2030)

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S

Fair corporate activities through observance of compliance
Goals to aim for(FY2030)

S

Initiative Items

FY 2022 Activity Results

FY 2023 Activity Plan

The Legal Affairs Group will disseminate
necessary information as appropriate.

Number of Compliance News Publications:
1/2 months❷ Establish a culture that accurately recognizes andemphasizes compliance risks by further enhancing
compliance education

No serious incidents occurred

Number of serious corporate scandals: 0❸ Through the newly introduced Compliance Promotion
Leader & Leader Conference, we aim to raise the levelof compliance activities of the entire group, including
overseas locations

Implementation of responses according toindividual cases

Number of serious corporate scandals: 0

Goals to aim for(FY2030)

Initiative Items

Providing timely and effective product andcompany information❷ Enhancement of integrated reports

We reviewed the content and structure of “Corporate Report 2022”,
distributed it to all employees, and conducted an evaluation using asurvey (negative evaluation 3.3%)

Revision from corporate report to integrated report(Survey: Negative evaluation 2.5% or less)

At each location, community cleaning, blood donation cooperation,
paper provision, and Braille calendar donations were done.

Cooperation with activities needed locally in eachlocation❸ Participation in local activities in each placeand continuation of smooth relationships
with the community

Activities to raise awareness about business and humanrights

FY 2022 Activity Results
Mitsubishi Paper Mills Group Human Rights
Policy establishedFY 2023 Activity Plan
Start due diligence towards human rights❶❷❸❹❺
・Number of deaths/serious accidents: 0
・Occupational accident frequency rate:(1.95) 50% decrease compared to 2020 (1.95)

Initiative Items

FY 2022 Activity Results❶ Reliable horizontal deployment of measures implemented inpast fatal accidents❷ Activation of safety activities❸ Make it a habit to have safety meetings with these three parties(equipment manager/orderer, main contractor, and subcontractor)

・Number of deaths/serious accidents: 0(2021.12.21～2022.12.31)
・Occupational accident frequency rate: 1.20
(2021.12.21～2022.12.31)

Growth strategy thatcreates value

Instilling a company-wide awareness of respect for human rights and constantly implementing humanInitiative Items

Enhancing activities to ensure safety and health Most Important Action Plan
Goals to aim for(FY2030)

rights due diligence

FY 2023 Activity Plan

Our company’s website was revised in March (aspects such ascompatibility with smartphones). Mitsubishi Paper Mills official
YouTube channel Green Webcast launched in September

Respect for human rights
Goals to aim for(FY2030)

FY 2022 Activity Results❶ Further enrichment of IR information and new
product information by utilizing websites, etc.

SS

❶ Disseminate product information and corporate activity information in a timely and effective manner,and convincingly appeal to stakeholders about our sustainability activities❷ Enhance information dissemination to stakeholders by using the booklet/WEB together(Survey: Negative evaluation 1.0% or less)❸ Continue to be a presence needed by each region at each site

Value Creation Story❶ Promote a better understanding of laws applicable toour operations, and enforce compliance

Promoting communication with stakeholders

Introduction❶ Build a system that allows necessary information to be conveyed in a timely manner to thedepartments/persons in charge who need it❷ Build and operate a strong legal compliance system and eliminate the occurrence of legal violations❸ Build and operate a legal compliance system that covers the entire group and eliminate theoccurrence of legal violations

G

FY 2023 Activity Plan
・Number of deaths/serious accidents: 0(2023.1.1～12.31)
・Occupational accident frequency rate: 0.98
(50% decrease compared to 2020 (1.95))❹ Promotion of “essential safety of equipment” and“visualization and digital transformation of danger”

Strengthening of corporate governance
Goals to aim for(FY2030)❶,❷ Compliance with the standards required of companies in the market where our company islisted (assuming prime market)❶,❷ Build a governance system to enable our company’s group to grow autonomously❸ Maintain the same level of governance within the group and conduct consistent promotion ofsustainability activities

Initiative Items

FY 2023 Activity Plan

❶ Ensure good governance based on the Basic Policies
on Corporate Governance

In June, we verified the revised Corporate
Governance Code and submitted a corporate
governance report based on it to theTokyo Stock Exchange. Board of Directors
effectiveness evaluation conducted in February
in preparation for next year’s report revision

Compliance with the listing maintenancestandards of the Tokyo Stock Exchange newmarket division (prime market)❷ Governance functions inspection

A new outside officer briefing session will beestablished in April. Information is provided
to outside officers once or twice a month
regarding important issues for the executive
side. Conducted interviews in 2022 andreported at the Board of Directors meeting inMarch 2023

Improving the Board of Directors EffectivenessConducted web training/surveys for all
employees of Mitsubishi Paper Mills Groupaffiliated companies (Number of responses
2,375, response rate 72.4%)

Operate at a level at which people canadequately respond to a survey regarding
sustainability

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S

Diversity and inclusion (human resource performance improvement)
Goals to aim for(FY2030)

・Establishment of a remuneration system commensurate with role and work skills
・Human resources information system management for all domestic consolidated companies
・Securing and assigning human resources within consolidated group companies (right people in theright places)

Initiative Items
Appropriate staffing and training of current staff,
and recruitment of human resources necessary
to improve business performanceG

FY 2022 Activity Results
・4/1 group reorganization project initiatives
・Establishment of management personnel
rotation rules
・Setting priority initiatives for work style reform

FY 2023 Activity Plan
・Personnel system operation to place the right people in theright places and secure human resources
・Elimination of vacant positions due to personnel changes andrecruitment reinforcement due to organizational reorganization

Data Section

FY 2022 Activity Results❸ Strengthening of Corporate Governance as part of the
Mitsubishi Paper Mills Group

Building a foundation thatsustains the creation of valueG❺ Improving mental and physical health management andworkplace hygiene environment

Establishing a risk management structure
Goals to aim for(FY2030)

Build risk response capabilities and improve the sustainability of our Group

Initiative Items
Appropriate management of risk items
identified by the Risk Management
Committee

FY 2022 Activity Results
Organize countermeasures and management methods for
top risk items. Conduct a backup test for Mitsubishi Paper
Mills website management

FY 2023 Activity Plan
Appropriate management of risk items

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41

Building a foundation that sustains the creation of value

Environment

Fundamental way of thinking

Actions for the Environment

1．[Basic 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-based 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 allits stakeholders through the sustainable use of forest resources.

1 Takasago Mill.................... JMAQA-E090 (Registered February 2000)(6) Promote environmental communication(7) Draw up appropriate contingency plans

2 Kyoto Mill.......................... JQA-EM0621 (Registered December 1999)

5
4

1

3

2

3 KJ Specialty Paper............ JCQA-E0654 (Registered March 2005)
4 Kitakami Mill...................... JQA-EM7421 (Registered April 2018)

5 Hachinohe Mill.................. JMAQA-E027 (Registered December 1998)
Click here for the reference site

Environmental Charter

Building a foundation thatsustains the creation of value(1) Implement measures to counteract 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

Our company’s group production bases have obtained
ISO14001 certification in order to continuously improve ourenvironmental performance. Based on the philosophy of EMS,
we are making continuous efforts to not only comply with laws
and regulations, but also to conduct business activities thatare environmentally friendly.

Growth strategy thatcreates value

2．[Basic policies]

Obtaining environmental management certification

Value Creation Story

Mitsubishi Paper Mills Group Environmental Charter

Introduction

The Mitsubishi Paper Mills Group intends to make an active contribution to the creation of a sustainable
society. To this end, the Group will not only strive to prevent global warming and preserve biodiversity, butalso to earn the trust of all its stakeholders through the sustainable use of forest resources and throughefforts to develop environmentally friendly production technologies and products. This commitment is set
forth in our Environmental Charter, composed in April 1993, and continues to guide the development of ourunique business activities that leverage the Group’s business fields.

Conducting environmental audits

Environmental Management System

The Safety, Environment and Quality Assurance Department of the Technology Division is in charge of these
initiatives and conducts environmental audits once a year to check environmental performance. In doing so,
we evaluate the various environmental risks surrounding us and confirm the effectiveness of our efforts. In
addition to regular audits, we also conduct follow-up audits to prevent recurrence, and our production bases
and head office are working closely together to advance these efforts.

Data Section

In order to realize the basic principles of the Environmental Charter, our company’s group is implementing a new environmental
management system from April 2023. The newly established Safety, Environment and Quality Assurance Department within theTechnology Division oversees environmental management within the group, and has built a system to more quickly and accurately
comply with laws and regulations, share information, and deploy horizontally. Depending on the situation, the head office takes thelead in dealing with group-wide issues, and it has established a management system that integrates factories, affiliated companies,
and the head office.
In addition, we have established a Safety and Environmental Management Office at each factory, creating a system that can
immediately respond to environmental accidents.
Board of Directors
President

Mitsubishi Paper Mills Limited Official Channel

Green Webcast

Technology Division General Manager
Environmental Conservation Committee
Coordinating body: Safety, Environment and Quality Assurance Department

Corporate Department

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Affiliated Companies/Mills
Safety and Environmental Management Office

We have opened an official YouTube channel, “Green
Webcast”. We are currently publicizing videos about thegroup’s products and initiatives aimed at contribution toa greener society.

Business Department/Researchand Development Division

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Actions for the Environment

Response to climate change

Mitsubishi Paper Mills (MPM) Scenario Analysis Results

Information disclosure in line with TCFD recommendations

Table 1 Implementation of scenario analysis and strategies and countermeasures against risks

・We identify risks related to climate change from items recognized by the Risk Management Committee under the umbrella of the
Sustainability Promotion Committee. The TCFD project teams also manage climate change-related risks.

Strategy・The relevant department examines the risks and opportunities identified by the TCFD project teams and formulates countermeasures.
・We joined the 30 by 30 Alliance for Biodiversity established by the Ministry of the Environment. We also offer opportunities to learn
about biodiversity and the blessings of the forest by utilizing the Ecosystem Academy, an experiential forest environment learning
experience that utilizes the Shirakawa company forest.
・In order to help people better understand our products and our efforts to contribute to a green society, we have launched the“Mitsubishi Paper Mills Official Channel Green Webcast” and have started sharing videos. With the theme of “Green”, we sharevarious videos including those that introduce our products and events or the activities at our “Ecosystem Academy” program.

E nhancing regulations on GHG emissions,limiting emissions• Energy source conversion• Changes in legal regulations andenvironmental regulation limits for various
raw materials and fuels•

Policies andlegislation

Transition risks

Technologies•

C ost of transition to low-carbon
technologies

Increasing consumer interest in lowcarbon products and services• Augmentation of raw material andfuel costs• Changes in the external financial
environment•

MarketEvaluation

Negative feedback from stakeholders

1.5°C

2°C

Strategies and countermeasures

4°C

Increasing costs due to increases in carbon taxes and dues, introducing emissions
trading schemes, etc.
• Cost increases due to energy source conversion• Legal restrictions on various raw materials and fuels, restrictions on production andsales due to changes in environmental regulation limits, a difficulty in substituting
said raw materials and fuels, a lack of substitutes, shortage of alternative fuels tocoal, increase in procurement costs

Large

Medium to
large

Small

Increasing energy costs due to the introduction of renewable energy and equipment
upgradesLarge

Medium to
large

Small

•

•

R educing coal dependency by maximizing the use of renewable energy,
promoting energy conservation in the manufacturing and logistics
processes• Investing in the energy transition• Relying on multiple vendors of raw materials and fuels, decentralization of
procurement sources, and reviewing supply chains•

Declining demand for products and services that use fossil fuelsImpact on sales due to focusing on carbon emissions in the environmental
performance index• Instability in the supply of chips for raw materials and various raw materials andfuel, and price increase• Withdrawal of investments, termination of loans, and difficulty in raising funds incompanies that use fossil fuels

Large

Medium to
large

Small

D ifficulty in raising funds due to changes in the assessment of companies’ attitudes
toward climate change
Loss of opportunities to receive orders, deterioration of social credibility, avoidanceof transactions, loss of human resources due to assessments such as having
inadequate measures against climate change

Large

Medium to
large

Small

•

•

•

•

C urbing energy costs by actively adopting the latest energy-saving
equipment and technologies

P romoting the resources recycling business model and forest conservation
furtherDissemination of information on the implementation status of sustainable
forest management and sustainable procurement policies• Relying on multiple vendors of raw materials and fuels, decentralization of
procurement sources, and reviewing supply chains• Disclosure of information related to climate change risks, costs, etc.

•

•

•

Risk assessment

Risk details (impact on MPM)••

D issemination of product information that can contribute to climatechange mitigation and adaptation, proactive disclosure of information
to stakeholders

Value Creation Story

Risk Management

Risk Items

Implementation of measures to prevent similar disasters through theestablishment of a system to deal with natural disasters and horizontal
dissemination of disaster information• Stabilization of procurement through diversification of raw material
suppliers and means of transportation• Formulation, implementation, and operation of preventive measures against
predictable wind and flood damage, such as strengthening buildings• Countermeasures against salt damage and water damage inmanufacturing facilities•

A ggravation and increase of extreme
weather events such as typhoons, floods,
and heat waves• Temperature rise, changes inprecipitation, etc.
•

Short term
(acute)Physical risk

Governance・We recognize that climate change is one of our most important business challenges, so the Board of Directors will discuss anddecide on our fundamental policies and important matters related to climate change. In addition, an executive in charge of promotionof sustainability will discuss the risks and opportunities and report them to the Board of Directors at least once a year.
・We have launched company-wide TCFD project teams that include an executive in charge of promotion of sustainability.
・We have established the Sustainability Promotion Committee to oversee the sustainability promotion activities of the entire Mitsubishi
Paper Mills Group and manage the progress of the TCFD project teams under the Risk Management Committee, which is under
its umbrella.
・Investment decisions related to decarbonization are discussed at the Management Committee and Board of Directors dependingon their importance.

Category

Introduction

Based on the Mitsubishi Paper Mills Group’s corporate philosophy and basic sustainability policy, to achieve sustainable growth, increase
corporate value over the medium- to long-term, and contribute to society, we will continue to disclose information in line with the TCFD
recommendations (Task Force on Climate-related Financial Disclosures) regarding both the risks and opportunities that climate change poses
to our business. This document discloses information in accordance with this proposal. The Mitsubishi Paper Mills Group is committed tocreating social value and to contribute to the realization of a sustainable society through its business activities.

S uspension of business activities due to damage or destruction of in-houseequipment and disaster (e.g. employees unable to come to work)• Decrease in functionality of water, electricity, and port facilities and suspension of
infrastructure services, suspension of delivery of materials and products due todisruption of networks (supply chains), difficulty in procurement and suspension of
supply due to damage to raw material and fuel suppliers

Small

Small toMedium ifficulties in procurement due to deterioration of tree growth,Ddeterioration in quality, decrease in yield, forest fires at suppliers, etc.
• Decrease of available water due to seawater intrusion, increased
water turbidity, decreased river flow, water intake restrictions, etc.
• Increasing risk of flooding due to rising sea levels (earthquakes,
tsunamis, storm surges, high waves) and salt damage• Conversion from afforestation to farmland due to food shortages andits increased necessity and expansion

Small

Small toLarge
Medium

•

Large

•

Scenario Analysis••

 tabilization of procurement through diversification of raw
Smaterial suppliers and means of transportation
Mitigating the impact of storm surges through land
reclamation led by local governments, improving water intake
and purification equipment and water-saving technologies

Table 2 Strategies and measures for opportunities
Business Environment
Discernment(MPM opportunity)

Strategies andCountermeasures

Category

External market growth
Strategies and countermeasures

1.5°C

2°C

4°C

S ales promotion of water treatment membrane support substrates used for reverse
osmosis membranes (RO membranes) that contribute to securing safe and secure water(seawater desalination, etc.)

MaintainExpand

ExpandExpand•E ntering the fields of liquid filtration for beverages, industrial water, oil, etc. using
liquid filter materials

MaintainExpand

ExpandExpand•S ales promotion of total heat exchange elements and dust collection filters that
contribute to air optimization

MaintainExpand

ExpandExpand•Expanding waterless textile printing business using sublimation transfer paper Maintain

Maintain

ExpandExpand•S trengthening the development and sales expansion of paper products in line withdemand for plastic waste reduction

ExpandExpandMaintain•S table procurement of resources and reduction of procurement costs by promoting theuse of domestic materials

ExpandExpandMaintain•Expanding the use of renewable energy for heat and electricity

ExpandExpandMaintain•B alancing energy costs and reduction of environmental impact by utilizing biomass,
waste materials, RPF, etc.

ExpandExpandMaintain•Development and sales of various battery separators

ExpandExpandMaintain•Expanding external sales of fuel chips and increasing power generation income

ExpandExpandMaintain•

Sales and promotion of FSC®-certified paper

ExpandExpandMaintain•Promotion of sales and popularization of Barricote®, bleached and unbleached kraft
paper, paperboard, etc.

ExpandExpandMaintain•E nhancing sales of filters (increasing sales of ventilation fans, air purifiers, airconditioners, etc.)

Maintain

MaintainExpand

ExpandExpand•E ffective use of resources
Reducing water usage andconsumption and securing water• Act on Promotion of Plastic
Resource Recycling (Enforced in
April 2022)••

Resource efficiency

Increasing demand for clean water under various
environmental conditions• Increasing need for securing drinking water and efficientventilation• Increasing demand for textiles that do not require water• Timber collection base in the Tohoku region, which is rich inforest resources•

Contributing to a decarbonized societyElectrification advances and various types of batteries are
becoming widespread• Activating biomass power generation•E xpanding the use of renewableenergyOpportunity

Energy resources•C hanges in consumer
preferences (ethicalconsumption)• Development of new products
and services through innovation• Elimination of plastics andaccess to new markets••

Products and services•

Market•U tilization of more forest
resources• Substitution and diversificationof resources•

ResilienceC arbon credit trading market
Domestic forest conservation
through forest utilizationA ddressing social issues by providing sustainable materials• Adopting measures such as those that prevent the spreadof infection.
• Shifting from materials such as plastics to carbon-neutral
pulp.
•

•
•

O wnership of company-owned forests in Japan
Using domestic timber from the Tohoku regionS ecuring forest resources that produce carbon-neutralmaterials• Climate change mitigation through absorption of CO2 byforests, black liquor energy usage••

Improving sales of masks, disinfectants, etc.

Maintain

MaintainExpand•P roduct development of paper pulp materials that can replace fossil-derived containers
and packaging

ExpandExpandMaintain•E xamining the use of the carbon credit system associated with forests’ ability toabsorb CO2

ExpandExpandMaintain•P romoting the improvement of the self-sufficiency rate of wood and forest
conservation by using domestic wood

ExpandExpandMaintain•Promoting the use of raw materials that have received international forest certifications

ExpandExpandMaintain•P romoting forest conservation, procuring resources from properly managed forests,
disseminating information on the Ecosystem Academy, etc.

ExpandExpandMaintain•Reducing the impact of soaring fuel costs by using black liquor energy

ExpandExpandMaintain

Data Section

Conducting・In order for humans and the earth to coexist, it is necessary to limit the increase in the average global temperature to less than 1.5°C
above pre-industrial levels to curb the severe impacts of climate change.
・The scenarios set in this analysis refer to IEA WEO SDS (Sustainable Development Scenario) and the external scenarios presented
by the Intergovernmental Panel on Climate Change (PCC). In a scenario of a “carbon-neutral world”, the transitional risks are highas social systems transition to climate change mitigation to avoid greenhouse gas emissions. On the other hand, the physical risks
were higher in a scenario of a world highly impacted by climate change where adaptation to face physical impacts are necessary to
face the fury of nature.
・We believe we can increase our resilience against future risks by taking measures to deal with transition and physical risks inmultiple scenarios of the future world. In addition, even in a harsh world with transition and physical risks, we believe adopting
countermeasures for both can reduce the degree of risks. We will also seize the listed opportunities and promote future businessexpansion.
・Specifically, by expanding and reprinting the following product groups, we aim to establish a solid business foundation by accelerating
business portfolio transformation in accordance with our medium-term management plan.
〇 Functional materials business products that contribute to a safe, comfortable, and sustainable society  ・Water treatment membrane support substrates that contribute to securing safe and secure water  ・Filter that contributes to air optimization  ・Battery separators that contribute to the effective use of electricity   ・Electronic industry materials, etc.
〇 New wood-based products that contribute to less plastic and plastic-free.
  ・Kraft paper, barrier paper, etc.

 ising average temperature andR
sea level• Changes in precipitation andweather patterns•

Building a foundation thatsustains the creation of value

Goals

Longterm(chronic)

Growth strategy thatcreates value

Indicators and・We have formulated the Mitsubishi Paper Mills Group Environment Vision 2050, in which our company aims to become carbon neutral
by 2050. The Mitsubishi Paper Mills Group strives to maximize the use of renewable energy, utilizing carbon fixation technology,
and develop environmentally friendly products, and we will contribute to the long-term Japanese government’s goal: “To actualize adecarbonized society or carbon neutrality by reducing greenhouse gas emissions to zero by 2050.”
・In fiscal 2022, energy-derived CO2 emissions in Japan were 707,000 tons. This was a 25% (239,000 t) reduction compared to thefiscal 2013 energy-derived CO2 emissions in Japan of 946,000 t.
By fiscal 2030, we aim to reduce energy-derived CO2 emissions in Japan by 40% from fiscal 2013 level to 568,000 tons or less.
・We have launched the “Fiscal 2030 CO2 Reduction Task Force” as a concrete initiative to reduce domestic energy-derived CO2
emissions by 40% compared to fiscal 2013.
 As specific measures, we will promote energy conservation efforts and switch coal to fuel in existing boilers to reduce coal usage.
・The domestic emissions of greenhouse gases in fiscal 2022, including CO2 in Scopes 1 and 2, is 821,000 t.
This was a 23% (243,000 t) reduction compared to the fiscal 2013 energy-derived CO2 emissions in Japan of 1,064,000 t.
By fiscal 2030, we aim to reduce emissions by 36% from fiscal 2013 level to 681,000 t or less.
・Regarding CO2 reductions including in the supply chain, we will continue to investigate the calculation method for Scope 3 andconsider future disclosure.
・Paper production uses large amounts of water resources. The amount of industrial water intake in fiscal 2022 was 119 million tons.
We will continue to promote water recycling (circular use of water) within the process and aspire for effective use. Furthermore, eachfactory has a wastewater treatment facility, and the water used within the factory is purified in accordance with legally mandated
standards before being released back into the community. We also strive to conserve water quality, comply with standards, and strive
to preserve the local environment.
・Our company owns about 2,000 ha of forests, mainly in the Tohoku region. We will continue to improve domestic timber’s
self-sufficiency rate and conserve forests by actively using timber from Northern Tohoku.

FSC®C021528
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Mitsubishi Paper Mills Group

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Mitsubishi Paper Mills Group Integrated Report 2023

45

Actions for the Environment

Business activity environmental impact reduction -Contributing to the realizationof a carbon-neutral society-

The Mitsubishi Paper Mills Group formulated “the Mitsubishi Paper Mills Group Environmental Vision
2050” for the purpose of contributing to the long-term Japanese government’s goal: “Realization of carbon
neutrality by 2050.”

The Mitsubishi Paper Mills Group’s main mill, the Hachinohe Mill, gets energy from the black liquor
produced in the pulp production process as well as from the waste (paper sludge) generated in the use ofwastepaper and the papermaking 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 items such as cut up
tires, waste wood, and other waste materials, is used as fuel for a waste boiler. The incinerator bottom ash
produced by the waste boiler and the ash produced by a coal boiler are used to make a recycled construction
material named Reglobe and are also recycled into cement material and raw steelmaking material. These
efforts to effectively use waste reduce final disposal volume while at the same time reducing fossil fuel usage.
In addition, in response to the Plastic Resource Circulation Act., we will systematically work to reduce
plastic waste discharged from our group factories and improve the recycling rate.
(The results for FY 2021 have been published on our website based on this law.)

Mitsubishi Paper Mills Group Environmental Vision 2050
Maximum utilizationof resources such as
renewable energy

Utilizing carbon fixation
technologies

We will contribute to the Japanese government’s
long-term goal: “To actualize a decarbonized society
or carbon neutrality by reducing greenhouse gas
emissions to zero by 2050.”

Developing environmentallyfriendly products

Click here for the reference site

Mitsubishi Paper Mills Group
Environmental Vision 2050

Local companies, etc.

Value Creation Story

Effective Use of Materials

Introduction

Environmental Vision 2050

Carbon fixation

Our company’s group will participate in the Ministryof Economy, Trade and Industry’s GX League, which
will begin its activities in fiscal 2023. In addition todemonstrating our commitment to realizing a carbonneutral society in 2050, we will strengthen our systems toachieve our 2030 goals that the group has committed to.

CO2
EnergyChemicalrecoveryIncineration ash
Reuse as cement raw material

30,52522,666

Purchased electricity
Fossil fuel-derived
energy

0

2005

2013

2022

Waste Generated and Volume Effectively Reused

(FY)

120

Emission intensity(tons/product tons)

1.60

1,400

1.256
1,200

1.051 1.038
946

932

1.059
856

1.162
1.052

791

797

600

707

2013 2018 2019 2020 2021 2022 (FY)

[Scope of coverage]

46

Mitsubishi Paper Mills Group

1.20
0.80

800

0.40

Unit emission
volume0.00

Emissions

The GX League is a group of companies
actively engaged in GX (Green Transformation) that collaborates with governments, universities, financial institutions, etc., and wasestablished as a place to discuss the transformation of the entire economic and social
system and to practice the creation of newmarkets.

Takasago Mill, Kyoto Mill, KJ Specialty Paper Co., Ltd., Hachinohe Mill, Kitakami Mill, Shirakawa Site, Toho Tokushu Pulp Co., Ltd.

Integrated Report 2023

89.7%

100

86.2%
114.1
8.9
105.2

104.5
6.7
97.8

97.5
6.5
91.0

80

(tons)

89.3
6.2
83.1

83.9
6.5
77.4

800

81.6
7.0
74.6

600

60
Waste
generated

40

Volumeeffectively used

20
0

Final disposal
amount

2017

2018

2019

2020

2021

2022 (FY)

76.1%

98.0%

Data Section

Emissions(1,000 tons)

Changes in plastic waste emissions and the recycling rate

(1,000 absolute-dry tons)

CO2 emissions and emission intensity

1,000

Pulp to paper

Produce pulp
from chips andwaste paper

Recovery boilers

Reuse as steel material

Renewable energy

10,000Papermaking process

Coal-fired boilers

Energy from wastematerials

20,000Waste materialfueled boilers

Building a foundation thatsustains the creation of value

Pulp mill process
Biomass energy

Wire/iron scraps
25,083

Wood chips

Paper sludge
Black liquor

Energy consumption (TJ)
30,000Paper
Pulp products

The Mitsubishi Paper Mills Group has the target ofbringing energy-derived CO2 emissions in Japan downby 40% from fiscal 2013 by fiscal 2030 and is working
on reducing its fossil fuel-based energy and overall
energy consumption.

(Regrove)

Reuse as recycled civilengineering materials

Waste paper● Participation in the GX League

Properly managed forests
Growth strategy thatcreates value● Achievements thus far

Granulated ash

Ash
recycling

Initiatives to reduce CO2 emissions

Used tires
Scrap wood

Customers

789.1

70.1%
64.7%
501.9

591.0

579.2

458.4

400
Recycling
rate

200

Emissions

0

2018

2019

2020

2021

2022

2025 Target (FY)

[Scope of coverage] Takasago Mill, Kyoto Mill, KJ Specialty Paper Co., Ltd., Hachinohe Mill, Kitakami Mill, Shirakawa Site, Toho Tokushu Pulp Co., Ltd.

Mitsubishi Paper Mills Group Integrated Report 2023

47

Actions for the Environment

Chemical Substance Management

Environment-related Data

● Emission transfer amount of PRTR target substances
No.

PRTR Class 1
Designated Chemical Substances

Cabinetorder No.

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

Emissions
Atmosphere

Amount transferred
Water

Sewerage

Input(1,000 t)

Main raw materials
Imported wood chips
Domestic wood chips
Purchased pulp
Waste paper
Inorganic pigments
Fossil fuels
Purchased electricity
Biomass
Refuse-derived fuel

450

0

0

240

2

Silver and water-soluble compound

82

0

0

0

0

3

Chloroform

127

18,400

4,000

0

0

4

Cyclohexylamine

154

0

0

0

0

5

2,2-Dibromo-2-cyanoacetamide

210

0

663

0

31

6

Dioxins

243

0.00

20.70

0.00

3.30

7

Triethylamine

277

1,500

0

0

0

Toluene300

10,9000034,4809

Hydroquinone

336

0

0

0

0

10

Boron and its compound

405

0

0

120

92

11

Formaldehyde

411

35

1

0

1,101

12

Methylnaphthalene

438

117

0

0

0

Takasago Mill, Kyoto Mill, KJ Specialty Paper Co., Ltd., Hachinohe Mill, Kitakami Mill, Shirakawa Site, Toho Tokushu Pulp Co., Ltd.

With regards to equipment (ballasts) containing high concentrations of PCBs, we have completed detoxification
treatment within the legal deadline in fiscal 2022.
We will also progressively process the treatment of equipment containing low concentrations of PCBs, with the aimof completing the treatment within the legal deadline in fiscal 2026.

[Scope of coverage]

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
SS
Waste
Waste generated
Final disposal amountFinal disposal rate*2

123 123 122

120

120

119 119

FY 2021

FY 2022

Target (achievement year)

TJ
GJ/product-tons
Million tons
Million tons

15,13113.6
125-11,036
13.6
126
127

10,822
15.9
123
123

10,352
15.1
122
120

9,493
14.1
119
119

－
－
－
－

1,000 t1,000 Nm³
1,000 Nm³
t

1,164
1,076
247
-

856
835
187
376

791
753
205
200

797
738
185
253

707
726
162
269

568 (FY2030)
－
－
－

t
t

7,717
3,417

7,045
3,719

5,748
3,106

6,134
3,349

5,748
3,410

－
－

-

166
9
94.9%

150
8
94.5%

140
8
94.2%

140
8
94.4%

－
－
98.4% (FY 2025)

1,000 t1,000 t%*1 F or 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

 akasago Mill, Kyoto Mill, KJ Specialty Paper[Scope of coverage] T
Co., Ltd., Hachinohe Mill, Kitakami Mill,
Shirakawa Site, Toho Tokushu Pulp Co., Ltd.

● Environmental Accounting
Principal Initiatives

Investments

Classification

100

Earnings
Cost reduction
2005

2018

2019

Service water usage

2020

2021
Wastewater2022 (FY)Expenditures

494
10
421
63
258
4
0
28
0
784

Includes air pollution, water pollution, foul odor, noise, and vibration measures
Includes domestic afforestation, energy conservation measures, etc.
Includes waste measures and waste paper and other product recycling
Includes container and packaging recovery and recycling
Includes environmental education, environmental management systems, and certification acquisition
Environment-friendly product development, etc.
Includes greening, environmental beautification, and environmental data disclosure
Fees for pollution-related health damage

Economic Benefit of Environmental Conservation Measures
110

584
2
87

2,255
1,511
0
744
258
25
249
29
43
2,859

Data Section

126 127 126 127

33

FY 2020● Water usage reduction

125

Product sales amountPaper(1,000 t)
Photo sensitive materials (Million m²)
Pulp(1,000 t)

FY 2019

Classification

130

82
75
7

FY 2005(1) Costs within business areas   1. Pollution control costs   2. Global environmental conservation cost   3. Resource recycling costs(2) Upstream/downstream costs(3) Management activity costs(4) R&D costs(5) Social activity costs(6) Environmental damage costs
Total(Million tons)(1,000 t* after drying)● Environmental impact data

Environmental Conservation Costs

Trends in water usage and wastewater volume

Waste
Waste generated
Volume effectively used
Final disposal amount

119
5,748
3,410

 ith the Takasago Mill, Kyoto Mill, KJ Specialty Paper Co., Ltd., Hachinohe Mill, Kitakami Mill, Shirakawa Site, Toho Tokushu Pulp Co., Ltd. as reference,W
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.

Water risk management
Paper production requires large amounts of water
resources, but reducing water usage will reduce theconsumption of thermal energy and electric energy,
which will contribute to CO2 reduction.
We will continue to promote water recycling (circularuse of water) within our process and work to effectively
use water while reducing the amount of water used.
In addition, we strive to preserve the environment byappropriately treating the water we use with wastewater
treatment equipment.

(Million tons)(t)(t)

Building a foundation thatsustains the creation of value● Response to PCB

Wastewater
COD
SS(1,000 t)

CO2emissions

707
726
162
269

Released into water systems

Reference: 2 mills in Germany(1,000 t) 2,513(1,000 t) 1,962(1,000 t)(1,000 Nm3)
(1,000 Nm3)(t)

Growth strategy thatcreates value

8

4 mills
1 business office
KJ Specialty Paper
Co., Ltd.
Toho Tokushu
Pulp Co., Ltd.

119

Service water usage
Wastewater

Atmospheric release
CO2 emissions
NOX emissions
SOX emissions
Soot and dust

(Million tons)

Purchased pulp amount (1,000 t) 103
Waste paper(1,000 t)
0OutputValue Creation Story

80

681
272
28
21
30
203
43
297
43

Industrial water

XyleneMitsubishi Paper Mills Group (Domestic)(Crude oil equivalent, 1,000 kl)

Energy

Water supplyOff-site1[Scope of coverage]● Material Balance

Introduction

With the aim of protecting the environment and ensuring product safety with respect to chemical substances
throughout our entire supply chain, the Mitsubishi Paper Mills Group has formulated its own Chemical SubstanceManagement Guidelines and Rules for Administration of the Chemical Substance Management Guidelines inconformance with various laws and regulations. All our mills, offices, and affiliated production companies control
and handle chemical substances according to these guidelines. We also formulated the Mitsubishi Paper Mills
Group Green Procurement Standards and Procedures based on these guidelines, promote green procurement
and make efforts to mitigate environmental risks posed by chemical substances.

(millions of yen)

BenefitAmountEffect of reuse of recovered pallet
Profit from sales of materials effectively recycled
Cost reduction from decreased energy usage
Cost reduction from improved material yield

309
37
83
191
620

Total
[Scope of coverage] Takasago Mill, Kyoto Mill, KJ Specialty Paper Co., Ltd., Hachinohe Mill, Kitakami Mill, Shirakawa Site, Toho Tokushu Pulp Co., Ltd.
The statistical method conforms with the Environmental Accounting Guidelines 2005 issued by the Ministry of the Environment

48

Mitsubishi Paper Mills Group

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Mitsubishi Paper Mills Group Integrated Report 2023

49

Actions for the Environment

Forest Preservation Activities

The Mitsubishi Paper Mills Group uses forest resources effectively and efficiently through the procurementof wood chips, the main raw material for paper, and practices responsible procurement by only purchasing
raw materials produced from properly managed forests.

Mori No Chonai-kai
Executive Office(Office Chonai-kai,an environmental NPO)

Forest thinningpromotion expense

Forest thinning promotion expense

Forest thinningsupport paper
production report

Forest thinningsupport paper

Forest thinningsupport paper

Forest thinningpromotion
expenseThe program combines lectures, observations, measurements, tree
planting and growing using company-owned forests, and paper making
and paper crafts as a means to experience the art of manufacturing.
Consideration is given to forest preservation, prevention of global warming,and biodiversity based on the theme of collaboration between nature andindustry, thus contributing to the achievement of SDGs. In fiscal 2022,
while adapting to people’s new lifestyle as a countermeasure against the
COVID-19 pandemic crisis, we held 27 events, including study sessions
on the forest environment and nature observation tours in Tokyo andFukushima Prefecture, and the total number of participants was 900.
In addition, our efforts to learn about the forest environment throughcommunity collaboration at the Tokyo Metropolitan Mizumoto Park were
evaluated highly, and we received the Tokyo Metropolitan Park Association
Award (Volunteer/Social Contribution Activities Category) Encouragement
Award.
(*) The Murabi Company Forest (Nishigo Village, Fukushima Prefecture) has
been accredited as “A Place to Experience Fukushima Prefecture” basedon the Act on Enhancing Motivation on Environmental Conservation andPromoting of Environmental Education.

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

We have confirmed that all wood chips and wood pulp came from forests that were legally and appropriately
managed, using one of the following methods:❶ Certification method using the forest certification system and CoC certification system(FSC® certification wood, FSC® managed wood)❷ Evidence of methods of individual companies or organizations (controlled wood)In ❷, we verify that wood is controlled in accordance with the FSC® Requirements for Sourcing Controlled
Wood (FSC®-STD-40-005). The verification method in conformance with these requirements is described below.

● Information Dissemination
We hold regular environmental seminars led by instructors
from diverse fields including people involved in the forestry, paper
manufacturing, finance industries, and environmental preservation,and people teaching at universities. The 12th event in 2022 washeld in a hybrid format with on-site and online viewing, with apresentation by Nao Miyashita (Professor, Graduate School of
Agricultural and Life Sciences, The University of Tokyo) on the themeof “Biodiversity for a Sustainable Society”, gave a lecture entitled“Why is biodiversity important”? Thinking from the perspective of
the relationship between humans and living things, and Hiroko
Shimazaki (Chief Staff Member, Sustainability Promotion Department,
Lion Corporation) gave a lecture entitled “Lion’s efforts to reduce
environmental impact”). This was an opportunity to understand theconnection between biodiversity and our daily lives.

Collection of information concerning wood chips and pulp

Risk evaluation (taking measures to mitigate risk when necessary)

Understand the place of origin, wood type, forest management
methods, etc. from traceability reports

Assessing and verifying that place of origin of wood possesses a low
risk with respect to (A) through (E) below.

Confirmation of documentation certifying the place of origin(e.g. documents related to transport and sales)
Regularly auditing suppliers and verifying document reliability

Receiving audits of risk assessment results by an FSC® certifying body

Raw Wood Procurement in FY 2022
We have verified that all wood chips and wood pulp procured in FY 2022 came from forests that werelegally and appropriately managed.
Types of raw wood

Click here for the reference site

FSC®-certified wood

21%

Ecosystem Academy
The 6th Seicho no Mori
(Forest of Growth) Tree Planting Event

Tokyo Metropolitan Park Association
Award Encouragement Award

FSC®C021528
50

Mitsubishi Paper Mills Group(A) Illegally harvested wood(B) Wood harvested in violation of traditional and human rights(C) Wood from forests in which high conservation values are threatened bymanagement activities(D) Conversion of natural forests to forests and non-forest uses(E) Wood from forests in which genetically modified trees are planted

Data Section● Forest Surveys and Research

Method for Verifying Legal Compliance and Sound Management

Building a foundation thatsustains the creation of value● Experiential Environmental Education*

Label certifying FSC® products

Growth strategy thatcreates value

As one member of the industry that benefits from the “gifts of the forest,” the Ecosystem Academy provides a place forexperiential forest environment education to contribute to developing a sustainable society that will connect people and community
through experiential environmental education, forest surveys and research, and information
dissemination. In fiscal 2022, we collaborated with Nishigo Village in Fukushima Prefecture,
Sumida City in Tokyo, and the Tokyo Metropolitan Park Association to hold a forest environment
learning program to promote community participation and contribute to sustainable regional
development. In addition, these kind of activities are also concrete efforts to participate in the
30 by 30 Alliance for Biodiversity promoted by the Ministry of the Environment.

FSC® forest certification has the goal of auditing and certifying responsible forest management from theeconomic, environmental, and social perspectives. It aims to ensure that the world’s forests are kept healthy
by labeling wood and wood products sourced from these forests. In 2001, our Hachinohe Mill became thefirst paper mill in Japan to obtain CoC certification (certification related to the management of processing
and distribution processes) and began producing FSC® certified paper. Since then, we have successively
acquired CoC certification at our domestic factories and have expanded the variety of certified products. We
are also progressing in obtaining FM certification for company-owned forests in Japan, and have obtained
forest certification for company-owned forests in Iwaizumi Town, Iwate Prefecture, Shichinohe Town, Aomori
Prefecture, and Saigo Village, Fukushima Prefecture. The Vancouver Declaration for the UN SDGs and FSC®
Certification was announced at the Forest Stewardship Council (FSC®) 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 in Japan and other countries.

Value Creation Story

Forest thinningpromotion
expensePrinting
companies

Paper distribution
companies

Forest thinningsupport paper

FSC® forest certification system
Introduction

Report of receiptof thinned wood

Certificate of contribution to forest
thinning and usage of wood from thinning

Forest thinning report

Wood from thinning

Paper producing companies

Ecosystem Academy

Forest thinning promotion expense

In accordance with FSC® certification scheme standards,
the Mitsubishi Paper Mills Group makes careful use of woodfeedstock produced under proper forest management, andalso works to popularize the FSC® certification system. At
the same time, we are engaged in a number of efforts to
help forest preservation and support more prosperous local
forestry and logging industries. This includes promoting forest
thinning through Morino Chonai-kai, a forest neighborhood
association, which is a collaborative project done inconjunction with Office Chonai-kai, an environmental NPO,
as well as promoting the sustainable use of second growth
hardwood produced in Iwate Prefecture.

Forest thinning supporter companies, etc.

Sustainable procurement of raw materials
Forestry
associations

Preserving biodiversity

0%Countries that produce raw wood chips
FSC®-managed wood

Japan

28%

79%

50%

100%

0%

20%

Chile

14%
40%

Thailand

24%

60%

Vietnam

24%

80%

Other

10%
100%

FSC®C021528
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Mitsubishi Paper Mills Group Integrated Report 2023

51

Occupational Safety and Health Initiatives
Building a foundation that sustains the creation of value

Connections with society, regions, and people

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 and every employee can fully display their abilities.

[Philosophy] We respect the humanity of our employees, give top priority to safety in the workplace, and create a work
environment where each person can demonstrate their full potential and feel comfortable and fulfilled.

3. Compliance with labor-related laws and regulations
We comply with the Labor Standards Act and other labor-related laws, and strive to maintain a
comfortable and healthy work environment.

Reference site is here

52

Mitsubishi Paper Mills Group

Integrated Report 2023

Philosophy and guidelines regarding human rights and labor

Decrease in the occupational accident frequency rate
50% decrease compared to 2020 (1.95) (2030))

Results

Number of deaths/serious accidents 0

Occupational accident frequency rate 1.14

● Occupational accident frequency rate (safety results)
The occupational accident frequency rate for the
Mitsubishi Paper Mills Group (including cooperative
associations) has remained flat since 2019, but in 2022
it decreased by 0.8 points from the previous year to
1.14 due to a decrease in accidents. In addition, thefrequency rate of lost-time accidents in 2022 decreased
by 0.15 points from the previous year to 0.38.

Accident frequency rate trends (main body + cooperative association)
Labor accident occurrence rate
Labor accident occurrence date with lost work time

3.0
2.5
2.0
1.5
1.0
0.5
0.0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 (year)● 2023 Mitsubishi Paper Mills Group Safety and Health Promotion Plan
We are promoting initiatives to improve risk sensitivity so that all employees so that all employees working in the Mitsubishi Paper Mills Group
think about ensuring safety during work on their own. In addition, top management at each factory, safety managers, and the head office safety
department will work together to make machinery and equipment inherently safer, and aim to achieve zero fatalities or serious accidents.
Basic Policy........Aiming for zero accidents in the Mitsubishi Paper Mills Group based on the basic philosophy of “Prioritizing
Safety and Health”
Slogan................“Eliminate disasters by adhering to established rules”
Priority target.....“Zero deaths and serious accidents” (Serious accidents: Conditions that lead to life-threatening situations)● Priority efforts to prevent industrial accidents● Maintenance and improvement of mental and physical health

We will focus on the following four points in order to build a safety
culture in which employees think for themselves about ensuringsafety during work, and to foster a culture that promotes thevisualization of danger.
1. Reliable horizontal deployment of measures implemented inpast serious disasters
2. Activation of safety activities
3. M ake it a habit to have a three-party safety meeting in advance(three-party consultation)
4. P romotion of “essential safety of equipment” and “visualization anddigital transformation of danger”
In April 2023, we will also establish a new Technology Division,
within which the Safety, Environment and Quality Assurance
Department will strengthen our safety management system. A Safety
and Environmental Management Office has been established ateach mill. The head office and mills work together to promote safety
activities, and these safety departments actively go to workplaces toconfirm equipment safety and education status. By participating inworkplace safety and health meetings, etc., we aim to prevent similar
accidents from occurring and improve and revitalize safety activities.

As part of our efforts to manage our mental and physical health,
we have set management standards for long working hours andstrengthened management to prevent overwork that causes
excessive fatigue and stress.
1) Mental and physical health management•Encourage secondary checkups for those with symptoms,
improve the checkup rate (compared to the previous year), andstrive to maintain health• People with mental issues have an interview with an industrial
physician, and their superiors communicate with each other at
least once a month• Prevention of long working hours and compliance with healthmanagement rules for all employees, including managers•Conduct training (line care) for high stress workplaces toimprove the workplace environment based on the results ofstress checks2) Improving the workplace hygiene environment•Inspection through workplace patrols and improvement ofpoints pointed out (hygiene)

Mitsubishi Paper Mills Group Integrated Report 2023

Data Section

2. Ensuring safety and health in the workplace
We will prioritize ensuring safety and health in the workplace, strive to maintain a safe and healthy
working environment, and understand and comply with the Industrial Safety and Health Act and otherrelated laws and regulations.

Number of deaths/serious accidents 0

Building a foundation thatsustains the creation of value[Guidelines]
1. Respect for human rights and prohibition of discrimination
We strive to maintain a healthy work environment, respect the human rights of each employee, andrefrain from acts that ignore human rights, such as sexual harassment and power harassment. We will
not engage in any acts that lead to discrimination based on items such as birth, nationality, race, ethnicity,religion, gender, age, various disabilities, and educational background. We will not engage in child laboror forced labor. In addition, the personal information of employees will be handled appropriately inaccordance with the Act on the Protection of Personal Information.

TargetGrowth strategy thatcreates value

Philosophy and guidelines regarding human rights and labor● 2022 Safety and Health Results

Value Creation Story

Relationship with Employees

Introduction

SocialWe place top priority on the safety and health of everyone involved in the Mitsubishi Paper Mills Group’sbusiness activities, and aim to create a disaster-free workplace environment where people can work withpeace of mind. We have formulated a health and safety promotion plan based on the basic philosophy of“considering safety and health as the top priority”, and have implemented a safety and health promotion
plan that includes the top management of each factory, the safety manager (Person responsible for safety),and the head office safety department (Safety, Environment and Quality Assurance Department, Human
Resources Department). We are working together to promote safety and health initiatives.

53

Connections with society, regions, and people

Human resources initiatives
We are implementing a number of initiatives to create comfortable work environments, to make the Groupa vibrant and fulfilling place to work and to aim for sustainable improvement of corporate value.
Amid intensifying global competition and our nation becoming a super-aging society, we are conducting
recruitment activities to pass on technical skills and to promote multi-skilled workers, and we are working toplace the right people in the right jobs.

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 until nighttime 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 addition, we have implemented system revisions in line with therevised Childcare Leave and Caregiver Leave Act, and in addition toestablishing a new system for childcare leave at the time of birth, it
is now possible to take childcare leave in installments. In addition,
we prevent employees from leaving their jobs due to childbirth andchildcare, and are creating an environment where both men andwomen can balance work and childcare if they want to.
In addition, based on the Act on the Promotion of Women’s Active
Engagement in Professional Life (Act to Advance Women’s Success),
we have formulated an action plan for the advancement of women,
and are moving forward with the goal of increasing the number offemale employees.

TargetResults

100% of those eligible for stratified
education attended
FY 2022 Attendance Rate 100%2) Observance of compliance   Compliance training is conducted every year for all
domestic group employees. In FY 2022, we have rolled
out an internal reporting system to all departments ofthe domestic group. (Participants:2,822)
Conduct company-wide training once a year

Results

Company-wide training implemented in
FY2022(September to January next year)

ActionPlan
Results3) Diversification of career opportunities   Establishment and utilization of the highly skilled
professional (specialist) system

Results

Promotion exam held once a year
Promotion exam results 2 people promoted

54

Mitsubishi Paper Mills Group

Integrated Report 2023

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

Changes in annual leave acquisition rate

2,000

100.0

1,950

80.0

1,900

60.0

1,850

40.0

1,800

All Industries

2) Promotion of employment of foreigners   Promotion of the employment of foreigners in Japan(promote overseas sales strategy by securing sales
personnel, accept employees for factory operation staff)
FY 2022 Foreigner recruitment results 1 person3) P romotion of the employment of people withdisabilities   Implementing initiatives to meet the legal
employment rate for people with disabilities
TargetLegally required employment rate ofdisabled people 2.3%

Results

FY 2022 Actual Results 2.4%

20.0

All Industries

Mitsubishi Paper Mills

1,750

2018

2019

2020

2021

2022 (year)* All industries’ data are from the Ministry of Health, Labour and Welfare’s Monthly Labour Survey

Results

4) Promotion of self-development   We are working to promote self-development by
providing subsidies for our correspondence education
system, offering a wide variety of courses to suitpeople’s work and interests, and providing an English
conversation subsidy system.

FY 2022 Female Recruitment Rate 40%(End of March 2023) 76 people● Regular Program Reviews Done in Conjunction with Our Labor Union

Mitsubishi Paper Mills

0.0

2018

2019

2020

2021

2022 (year)* All industries’ data are from the Ministry of Health, Labour and Welfare’s Monthly Labour Survey● Health Management
Data Section

Plan

Female Recruitment Rate 30% or higher(Until FY 2025) 100 or more female fulltime employees

We are introducing a telework system as a flexible way of working to match the lifestyles of each individual employee.
We commenced implementation of the system gradually, starting from our head office. Together with the staggered
working hours system, these systems aim to improve work-life balance and alleviate stress from commuting throughrush hours, and thereby are also contributing to increase productivity.
Moreover, with the introduction of an undesignated desk system at the head office, it is now possible to flexibly choose
a workplace according to the purpose and situation, which improves work efficiency and revitalizes communication.
We are also working to improve the efficiency of internal meetings, and are working to shorten meeting times byreviewing the operation of meeting bodies, leading to a reduction in total working hours.

Building a foundation thatsustains the creation of value

Target1) Promoting the active participation of women   Appointment of a female outside director (1 person), female
full-time auditor (1 person)   Efforts to improve the female recruitment ratio through“Formulation of an action plan for women’s empowerment”● Work style reform

Growth strategy thatcreates value

1) Education system enhancement   We focus on fruitful human resource development,
as we have adopted a personnel evaluation system thatallows employees to identify areas for improvement bylooking back at their evaluations and to grow further. We
have also introduced a team-type target management
system that enables employees to develop their selfmanagement skills and work execution abilities by
setting up goals they should achieve.
   In addition, we are conducting educational training
to improve skills at a wide range of levels, including
young, mid-career, and managerial employees.

• Conducting a work engagement survey and sharing the strengths and challenges of each workplace based on
the survey results• Planning and implementation of action plans by holding workplace environment improvement workshops

Value Creation Story● Initiatives towards Diversity & inclusion

In order to understand the voices of employees, including their thoughts and opinions, we conduct a work engagement
survey in order to improve the workplace environment. We will take action (improvement measures) based on the results
and aim for further development.

Introduction● Human Resources Development Initiatives● Initiatives to improve work engagement

Based on the recognition that “the physical and mental health of employees is the source of corporate vitality”,
Mitsubishi Paper Mills has declared that its management will collaborate with the health insurance union (Collaboration
Health) to maintain and improve the health of its employees. Furthermore, we will extend these activities to the entire
Mitsubishi Paper Mills Group and employees’ families, comprehensively promoting work-life balance, improving
productivity, and creating a vibrant workplace.
[Initiative Examples]• Stress check implementation• External EAP (Employee Assistance Program) utilization• Influenza vaccine cost subsidy• Subsidy for gynecological cancer screening• Walking campaign implemented (health maintenance and promotion)

Mitsubishi Paper Mills Group Integrated Report 2023

55

Connections with society, regions, and people

Together with customers
In order to provide products that customers can use with peace of mind, Mitsubishi Paper Mills confirms quality requirements,
quality design, and manufacturing methods in each business segment. We have established a Product Safety Code to ensure
product safety, and we are proceeding with initiatives to improve safety.

Mitsubishi Paper Mills believes that the role of a company in society is to provide satisfying services along with safe and usefulproducts to customers, and we have utilized our excellent technologies to provide safe products to society.
From here on, too, we will steadily implement the following actions throughout the entire company to maintain sound management
and continue providing society with safe products and satisfying services that meet the needs of the times.

3. We will provide accurate and reliable information on the correct way to use our products and on the safety of the products.

2022 Tokyo International Packaging Exhibition (TOKYO PACK 2022)
Venue: Tokyo Big Sight October 12-14, 2022

Exhibition contents: Display of coated packaging paper such as
Barricote®, Barrisherpa®, Bleached Kraft Paper and related products

IGAS2022 International Printing Technology & Solutions Exhibition

37th Nepcon Japan Electronics Development and Implementation Exhibition

Venue: Tokyo Big Sight November 24-28 2022

Venue: Tokyo Big Sight January 25-27, 2023

Value Creation Story

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.

In the Mitsubishi Paper Mills Group, the sales, R&D,
production, and technology departments work as one
to provide products that satisfy customer needs. Our
technology and production personnel accompany
sales staff and gather feedback from customers as
we, a corporate group that is consistently on the
cutting edge of technology, make efforts to create
products that benefit the world. In order to facilitate thecommunication with customers, we actively participate
in exhibitions.

Introduction

Product Safety CodeCommunicating with customers

Quality Control System

Takasago Mill

President

Technology Division
General Manager

Functional Materials
Business General Manager
Sustainable Fiber Materials
Business General Manager
Research and Development
Division General Manager

Functional
Materials Division

Kyoto MillKJ Specialty Paper Co., Ltd.
Hachinohe Mill
Quality control administrator: Hachinohe Mill Manager

Sustainable Fiber
Materials Business
Department

Kitakami Mill
Quality control administrator: Kitakami Mill Manager

Integrated Report 2023

Product Liability (PL)Committee

Product Safety
Judgment Panel

Product Liability (PL)Subcommittee

Product safety
activities◆ Legalcomplianceteam◆ Outside party
negotiation team◆ Education team◆ Consumer support
team◆ Product safetyassurance team

Exhibition contents: Inorganic fiber paper, activated carbon deodorizing

Exhibition contents: Energy recovery ventilator cores and air filters

paper, antibacterial water absorption sheet, CNT products, etc.

Data Section

Product Safety Control System

Mitsubishi Paper Mills Group

2023 AHR Expo
Venue: Atlanta, USA February 6-8, 2023

Quality control administrator: KJ Specialty Paper President

Toho Tokushu Pulp Co., Ltd.

56

New Functional Materials Exhibition 2023
Venue: Tokyo Big Sight February 1-3, 2023

Quality control administrator: Kyoto Mill Manager

Quality control administrator: Toho Tokushu Pulp President

In order to actively promote specific product safety activities,
we have established a Product Safety Judgment Panel and a
Product Liability (PL) Subcommittee as specialized organizations
within the Product Liability (PL) Committee. We carry out strict
management in accordance with product safety regulations.
In addition, we promptly obtain information on new laws andregulations as well as toxicity information, and conduct constantsafety inspections of chemical substances to ensure the safety of
the raw materials we use.

Exhibition contents: Solder resist thinning system, highly durable
dry film resist for sandblasting, highly chemical resistant dry film
resist, dissolving and peeling dry film resist, positive dry film resist(development product), dry film resist for thick copper etching(development product)

Building a foundation thatsustains the creation of value

Quality control administrator: Takasago Mill Manager

Exhibition contents: Environmentally friendly plate-making films,
printing plates, garment printing systems, etc. Laser thermal-sensitive
film TRF-IR830 attracted attention

Growth strategy thatcreates value

In April 2023, we will also establish a new Technology Division, within which the Safety, Environment and Quality Assurance
Department will strengthen our quality management system. By setting up a company-wide system to deal with major quality
problems under the leadership of the Technology Division, we will create a management system that integrates the mills andthe head office. The Safety, Environment and Quality Assurance Department conducts regular on-site quality audits to prevent
compliance violations. In addition, at overseas sales offices, the Technology Division will take the lead in raising quality control
awareness, inspecting and improving corrective measures, and building a system to prevent quality problems from occurring.
Furthermore, all Mitsubishi Paper Mills mills have obtained ISO9001 certification and are working to continuously improve quality.
Through the quality assurance of our products and services, we aim to further improve customer satisfaction, and we will continue
to strive to maintain and improve the quality of our products.

Encouraging a Worry-Free Use of Our Products
The products the Mitsubishi Paper Mills Group provides are made from raw materials proven to be safe. Along with swiftly
obtaining toxicological data and information about new regulations, all departments involved, including affiliated companies,
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 the Green Procurement
Guidelines and strictly control everything from the raw materials we use to our products’ constituent substances. Also, notonly do we ensure compliance with laws and regulations, we also meet voluntary standards set by the industry according
to product application and satisfy the demands of individual customers. We will contribute to the betterment of society bycontinuing to provide eco-friendly, safe products that customers can feel safe and comfortable about using.

Mitsubishi Paper Mills Group Integrated Report 2023

57

Connections with society, regions, and people

Social contribution activities/initiatives in local communities

Fair business practice

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 50), which uses forests
owned by Mitsubishi Paper Mills, we undertake a number of social contribution activities that take advantageof the characteristics of each of our business sites.

Ensuring Fair Trade

Social Contribution - Direction of Activities

Contributing to Local Communities● Traffic Safety Reader for Mothers and Children● Braille Calendars② Observance of desirable business practices(Promotion Standards based on the Act on
the Promotion of Subcontracting Small andMedium-sized Enterprises) between theparent company and subcontractors

Donation ceremony of Traffic Safety
Reader for Mothers and Children

Braille Calendar (2023 edition)

Preventing Corruption
The Mitsubishi Paper Mills Group Compliance Conduct Standards prohibit business activities that may
result in social corruptions: entertaining or giving gifts to civil servants and giving benefits to officials in foreign
governments and public organizations.
We also produced “guidelines for business entertainment and gift-giving” to tighten the regulations within
the company regarding the provision and receipt of benefits, so that there will be no ambiguous relationships
among individuals.

Breakdown of Philanthropic Expenditures

Disavowal of Organized crime groups

Every one of our business sites regularly
undertakes activities to beautify and clean up
the surrounding areas and promotes initiatives
to develop comfortable urban environments
together with local communities.

Mitsubishi Paper Mills is a company which
continually contributes to the creation of asustainable society. Whether it’s in academics,
research, or education, our aim is to be of benefit
to society in multiple fields.

The Mitsubishi Paper Mills Group maintains a resolute stance against organized crime groups that threatensocial order and safety. This stance is set forth in the Mitsubishi Paper Mills Group Compliance Conduct
Standards. We also carry out compliance education and ensure that executives, employees, and othercompany personnel are fully aware of our policies.
In addition, we have also implemented a search system that uses an external database and that enables
us to mitigate the risk of inadvertently entering into relationships with organized crime groups.

Click here
for thevideo

Breakdown of philanthropic expenditures
Environment

Culture and arts

Cleanup activities in the Kitakami River basin

Initiative Examples
・Kitakami Mill Kitakami River cleanup activity held in
April 2023
・Takasago Mill Participated in the “Takasago City
Cleanup Operation”
・Oyama Mill of Toho Tokushu Pulp Co., Ltd.
Participated in “Green and Light Foster Parent System”, etc.

Social welfare

Academics,
research and education

Promoting Social Responsibility in the Value Chain

Data Section

International
exchange, etc.

Regional activities andcultural preservation

Building a foundation thatsustains the creation of value

Community Cleanup Activities

Growth strategy thatcreates value

We began producing braille calendars in 1997, and the 2023 edition
marked the 27th year of this effort. We donate them to local social
welfare groups and braille libraries mainly via our business footholds.
We use embossed braille that does not use plastics, and we use ecofriendly FSC®-certified paper that can be recycled after use.

Value Creation Story

The Hachinohe Mill donated 2,350 copies of the “Traffic Safety
Reader for Mothers and Children” to the Hachinohe District Traffic Safety
Association to help prevent traffic accidents among new schoolchildren.
They were distributed to new first graders at 59 elementary schools in
six municipalities: Hachinohe, Hashikami, Gonohe, Oirase, Rokunohe,and Shingo. Donations have been made almost every year since 1969,
and a total of 231,360 copies have been donated.

Introduction

Click here for the reference site

We promote business activities with an emphasis on legal compliance based on the belief that it is throughfair and friendly competition and providing valuable technology that we can truly be worthy of trust. We
have updated our “Antimonopoly Law Compliance Manual to deepen the understanding of the purposes
and provisions of the Anti-monopoly Act and its complementary laws, such as the Subcontract Act and thePremiums and Representations Act.
In addition, we have endorsed the purpose of the“Declaration of Partnership Building” by the Cabinet
What is the “Partnership Building Declaration”?
Office, the Small and Medium Enterprise Agency, andother organizations, and announced our participation① Coexistence and co-prosperity of the entire
in the “Declaration of Partnership Building” portal site
supply chain and new collaboration beyond
scale and affiliation
on March 17, 2022.

We aim to forge business relationships of mutual prosperity based on the belief that all suppliers involvedin 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 a similar 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.
Click here for the reference site

Raw Material Procurement

FSC®C021528
58

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

59

Building a foundation that sustains the creation of value

GovernanceFundamental way of thinking[Decision-making]Outside Director Takehara (Chair)*Outside Director Kataoka
Representative Director Kisaka
Representative Director Sanada

FY 2022
Number of
events held

10

Main roles/
authority■ Examining the appropriatenessof the following proposals to bedeliberated by the Board of Directors
and reporting the results of theexamination•N omination of director and auditor
candidates•A ppointment and dismissal of
executive officers, etc.
•P olicy regarding executive
remuneration• Individual compensation details■ Discussion and examination of CEO
succession planningElection and Dismissal

Audit report

5 Internal, 3 Outside

Accounting auditors

Cooperation

Auditing company

Election, dismissal, and oversight
Cooperation

President/CEO

ReportNomination andRemuneration Committee

Instructions and supervision
Cooperation

Internal Audit Department

Audit

Audit

Executive functions
17 executive officers[Business execution]

Instructions andsupervision

Business divisions and subsidiaries

60

Mitsubishi Paper Mills Group

Integrated Report 2023

Sustainability promotion structure* They will retire as director at the conclusion of the regular General Meetingof Shareholders to be held in June 2023.

● About executive compensation
The Basic Corporate Governance Policy stipulates that
the Nomination and Remuneration Committee considers
the appropriateness of the policy regarding executive
remuneration, as well as individual compensation details,
and reports to the Board of Directors.
Since the establishment of the committee, we havebeen carrying out such operations, and in 2021 we
introduced a performance-linked stock compensation
system. Furthermore, we are revising the system toensure than incentives work appropriately, such as byrefining the system to make it more appropriate and inline with actual circumstances.

Data Section

1 Internal, 3 Outside

Board of Directors

Composition(FY 2022)

The Basic Corporate Governance Policy stipulates
that the Nomination and Remuneration Committee
considers the appropriateness of nominations for director
and auditor candidates, appointment and dismissalof representative directors, executive directors, andexecutive officers, and reports to the Board of Directors.
At the June 2023 General Meeting of Shareholders,
we took a step forward in diversity by appointing our firstfemale directors and female auditors.

Building a foundation thatsustains the creation of value

Election and dismissal

Committee Chair

Appointed by independent outside
directors● About the appointment and dismissal of directors

Growth strategy thatcreates value

General Meeting of Shareholders

In order to ensure the propriety of the selection of
officers and the determination of compensation, we haveestablished a voluntary Nomination and Remuneration
Committee and have established procedures for thecommittee to consider in advance any proposals thatare to be deliberated by the Board of Directors. The
Nomination and Remuneration Committee is comprisedof two independent outside directors and two
representative directors, with an independent outside
director serving as the chair.

Value Creation Story

Our company has designated an independent company with an Audit & Supervisory Board as its
organizational design. We have appointed three independent outside directors, accounting for more than
one third of the Board of Directors, to create a system that allows the Board of Directors to adequately fulfill
the roles required of it. We 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. In addition, we have a Nomination and Remuneration Committee
that, in the interest of maintaining objectivity and transparency in matters concerning executive appointment
and remuneration, is chaired by an independent outside director and that acts as an advisory body to theBoard of Directors. In addition to regular monthly Board of Directors meetings, special Board of Directors
meetings are held as necessary to make decisions and supervise matters concerning those outlined bylaws, regulations, and the Articles of Incorporation, as well as the execution of significant business. Our Audit& Supervisory Board, which also includes outside Audit & Supervisory Board members, holds meetings
periodically and as needed. As a general rule, we hold a management meeting once a week with executive
officers and other executives to discuss management policies, management strategies, and basic businessstrategies. We make quick and optimal decisions, ensure group governance, discuss group strategies, andshare important information.
In terms of business execution, we have adopted a division system, and we aim to strengthen our businessexecution system by giving each business division responsibility for earnings and authority. The scope of theorganization’s responsibilities is clarified through the division of duties regulations, and various decisions are
made appropriately based on the rules of the Board of Directors, its bylaws, and other company rules.
 (Current as of July 1, 2023)

Nomination and Compensation Committee(advisory body to the Board of Directors)

Introduction

Corporate Governance Framework

Audit & Supervisory Board Audit

Corporate Governance

Mitsubishi Paper Mills’ corporate activities are based on its corporate philosophy: “Live up to the trustof its customers in the world market”; “Always be on the leading edge of technology”; “and Contribute topreserving the global environment and creating a recycling-based society”. Based on this philosophy, theGroup pursues corporate group management that values sustainable growth (sustainability) of our company
and society, works to enhance management transparency, and boost corporate governance, all to achieve
the sustainable growth of the Group and the medium- to long-term improvement of its corporate value.

Corporate GovernanceElection and Dismissal

Reference site is here● Standard composition ratio of
performance-linked stock compensation
Category
Director, Executive
Officer(Excluding outside/parttime employees, etc.)

Outside/Part-time
Director

Monetary
compensation

Stockcompensation

Total

Fixed

Fixed

Performancelinked

75%

12.5%

12.5%

100%

100%

-

-

100%

Mitsubishi Paper Mills Group Integrated Report 2023

61

Corporate Governance

Board of Directors and Audit & Supervisory Board Members
Directors

Outside Directors

President and Chief Executive Officer
In Charge of the Technology Division

Director andSenior Executive Vice President
Planning and Management Head Office, In chargeof the Corporate Governance Head OfficeInternal Audit Department Director In Charge
Executive in Charge of Promotion of Sustainability

Shigeharu
Matsuzawa

Yuji Takagami
Directors
Managing Executive Officer
In charge of Sustainable Fiber Materials Division.
Sustainable Fiber Materials Business General
Manager

Directors
Managing Executive Officer
Germany Business In Charge

Directors

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)
June 2010	Supervisory Officer, Comforia Residential Investment Corporation
June 2011
Outside Director, The Higo Bank Ltd.
March 2013	Siris Holdings Co., Ltd.
(Currently Siris Co., Ltd.) Outside Audit & Supervisory Board Member
June 2014
Outside Auditor Casa Co., Ltd.
June 2019
Outside Director, Our Company (to present)
June 2021	Outside Director, The Higo Bank Ltd. (Audit and Supervisory Committee)
July 2022
Audit Officer, Shimizu Corporation REIT Investment Corporation (to present)

April 1979 NH Foods Ltd. (hereinafter “NH”)
April 2010	Executive Officer, and Head of Corporate Planning Department, Group Management
Division, NH.
April 2012	Executive Officer, and Head of Management and Supervision Department of MeatBusiness Division, NH.
April 2014	Executive Officer, Head of Management and Supervision Department of Meat Business
Division and Chief of Business Planning Office, NH.
April 2015 Executive Officer and Head of Affiliated Companies Division, NH.
June 2015 Director, Executive Officer, and Head of Affiliated Companies Division, NH.
April 2016	Director, Managing Executive Officer, and Head of Affiliated Companies Division, NH.
April 2017	Representative Director and Vice President in charge of Reform of the Business
Structure of the Corporate Group, NH.
April 2018	Representative Director and Vice President in charge of Reform of the Structure of the
Corporate Group, NH.
June 2022 Outside Director, Our Company (to present)

Important positions
concurrently held at othercompanies, etc.

Partner Chief, Kataoka & Kobayashi LPC
Supervisory Officer, Shimizu Corporation REIT
Investment Corporation

Board of Directors
meeting attendance

Board of Directors meetings: 15 of 15 (100%)

Atsuko Watanabe (Born February 3, 1964)

Kunihiro Nakagawa

Yoshihiro Kataoka

Mitsunori Shinohara

Atsuko Watanabe

Director, Managing Executive Officer

Outside Director

Outside Director

In charge of the Functional Materials Division,
Research and Development Division General
Manager of the Functional Materials Division, General
Manager of the Research and Development DivisionPartner Chief, Kataoka & Kobayashi LPC
Attorney-at-law

Former NH Foods Ltd.
Representative Director,
Vice President & CEO

Outside Director
Attorney, Watanabe Sogo Law Office

April 1996
Registered as an attorney-at-law and joined the Ichiro Nagaishi Law Office
August 2010	Atsuko Watanabe Law Office (currently Watanabe Sogo Law Office)(to present)
June 2021
Outside Director, Hokkan Holdings Co., Ltd. (to present)
June 2023
Outside Director, Our Company (to present)
Important positions
concurrently held at othercompanies, etc.

Watanabe Sogo Law Office Attorney-at-law
Outside Director, Hokkan Holdings Co., Ltd.

Characteristic

Ryuichi Kisaka
Shigeharu Sanada
Shigeharu Matsuzawa
Yuji Takagami
Kunihiro Nakagawa
Yoshihiro Kataoka
Mitsunori Shinohara
Atsuko Watanabe

Internal
Internal
Internal
Internal
Internal
OutsideOutsideOutsideCorporate
Management

Financial
Accounting

●
●

●
●

●

●

Purchasing/Internationality
Procurement
●

●

●
●
●

●

Legal/
Compliance
●

●
●

●
●

Nobuko Otsuka

Hiroaki Tonooka

Satoshi Takizawa

Standing Audit & Supervisory Board
MemberStanding Audit & Supervisory Board
Member Outside Audit & Supervisory
Board Member
Former Full-time Auditor of Oji Holdings

Outside Audit & Supervisory Board
MemberFormer Director and Executive Vice
President of Meiji Yasuda Life Insurance
Company

Outside Audit & Supervisory Board
MemberMitsubishi UFJ Trust Business Co., Ltd.
Representative Director and President

Integrated Report 2023

April 1985
Joined the Tokyo Regional Taxation Bureau
March 2006	Joined the Tohmatsu Tax Accountant Corporation (currently Deloitte
Tohmatsu Tax Accountant Corporation)
January 2016 Joined Oji Management Office Co., Ltd.
April 2018	Corporate Governance Department Head of the Internal Audit Department
and Head of the Compliance Department of Oji Holdings Co., Ltd.
June 2019
Full-time Audit & Supervisory Board Member of Oji Holdings Co., Ltd.
June 2023
Full-time Audit & Supervisory Board Member, Our Company (to present)-

Yoshihiro Kataoka (Born January 23, 1953)
Audit & Supervisory Board Members
April 1976	Joined Meiji Life Insurance Company (currently Meiji Yasuda Life
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
June 2014
NH Foods Ltd. (hereinafter “NH”)
April 2016
Director, Meiji Yasuda Life Insurance Company
June 2016	Advisor, Outside Audit & Supervisory Board Member, Same Company(to present)
July 2016
Director, The Kitasato Institute
July 2020
Director and Councilor, The Kitasato Institute (to present)
May 2022
Councilor, Japan College of Social Work (to present)
Important positions
concurrently held at othercompanies, etc.

Director and Councilor, The Kitasato InstituteCouncilor, Japan College of Social Work

Board of Directors
meeting attendance

Board of Directors meetings: 15 of 15 (100%)
Board of Directors meetings: 12 of 12 (100%)

Satoshi Takizawa (Born June 21, 1961)
Audit & Supervisory Board Members
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 Section of MUFJ TBC
June 2013 Managing Executive Officer, MUFJ TBC
June 2016 Director, Senior Managing Executive Officer, MUFJ TBC
April 2019	Representative Director and President of Mitsubishi UFJ Trust BusinessCo., Ltd. (to present)
June 2021 Outside Audit & Supervisory Board Member, Our Company (to present)
Important positions
concurrently held at othercompanies, etc.

Mitsubishi UFJ Trust Business Co., Ltd.
President and Chief Executive Officer

Board of Directors
meeting attendance

Board of Directors meetings: 15 of 15 (100%)
Board of Directors meetings: 12 of 12 (100%)

Mitsubishi Paper Mills Group Integrated Report 2023

Data Section

Yasuyuki Kusuda

Mitsubishi Paper Mills Group

Nobuko Otsuka (Born September 15, 1961)
Standing Audit & Supervisory Board Member

ESG

Audit & Supervisory Board Members

62

Board of Directors meetings: 11 of 11 (100%)

Building a foundation thatsustains the creation of value

Name

Board of Directors
meeting attendance

Important positions
concurrently held at othercompanies, etc.

Main knowledge, experience, and abilities of each director
Human
Manufacturing/
Business/Sales Resources/
Technology/R&D
Labor Affairs
●
●
●
●
●
●
●
●

-

Growth strategy thatcreates value

Directors

Important positions
concurrently held at othercompanies, etc.

Value Creation Story

Shigeharu Sanada

Mitsunori Shinohara (Born September 26, 1954)

Directors

Introduction

Ryuichi Kisaka

Yoshihiro Kataoka (Born July 30, 1954)

63

Corporate Governance

Assessments of the Board of Directors Effectiveness
The Board of Directors conducts a questionnaire and interview for Directors and Audit & Supervisory Board
members to analyze and evaluate the effectiveness of the Board of Directors as a whole. The results of thequestionnaire are then discussed at the Board of Directors. In addition to sharing the current understanding,the Board of Directors will continually work to improve its effectiveness through initiatives that contribute to
identify issues and demonstrate the functions of the Board of Directors.

Step2

Step3

Step4

Survey conducted for all
Directors and Audit &Supervisory Board Members

Individual interviews witheach Director and Audit &Supervisory Board Member

Analysis of the current
situation and identified issues

Discussion andevaluation at theBoard of Directors● Evaluation
items(1) Composition of the Board of Directors: Number of members, skills possessed, diversity(2) O peration of the Board of Directors: Meeting frequency, proceedings, materials, information
provision system(3) F unctions of the Board of Directors: Discussions at the Board of Directors, business execution
status, mutual supervision of directors, committee functions(4) Other: Improvement status of issues identified in the previous year’s effectiveness evaluation(1) FY2022

General Evaluation

As a result of the evaluation from the perspectives of the Composition of the Board of Directors, the Operation of theBoard of Directors, and the Functions of the Board of Directors, this company’s Board of Directors has been able toappropriately fulfill its expected roles and functions. Furthermore, since a certain degree of improvement has been madeassessed the issues identified in the previous year’s evaluation, it can be evaluated that effectiveness has been ensured.
Given the current size of this company, the Board of Directors has an appropriate number of members to carryout its functions, and each member generally has sufficient skills. In addition, the composition ratio of internal andexternal officers has improved to an appropriate ratio, and the appointment of people with corporate management
experience has invigorated discussions. Therefore, we can evaluate that the Board is appropriately membered. On
the other hand, considerations need to be made from the perspective of diversity, and efforts should be made toachieve diversity, especially in terms of gender. There is a need to develop executive human resources, including
women, by considering inviting female executives from outside the company(*), and by improving internal executive
training systems.
* Female director and auditor candidates were elected at the Board of Directors meeting on February 27, 2023.

b. Operation of
the Board of
Directorsd. Other64

Mitsubishi Paper Mills Group

Continuing from the previous year, monitoring of the status of business execution by executives, mutual
monitoring of directors, and governance regarding remuneration are functioning appropriately. On the other
hand, it was recognized that there is a need to expand discussions on achieving sustainability management that
contributes to increasing corporate value and discussions that fully take into account stakeholder perspectives. In
addition, with regards to human resources strategy, although there is shared recognition that this is an important
issue, there has not been enough concrete discussion. We need to clarify the skills required for future businessstrategy, and active discussion from the perspective of business strategy is required.
Regarding human resources strategy, it is also necessary to recognize important issues and to further enhance
IR activities as a company listed on the prime market, and to discuss IR activity policies and share the details of
SR activities with the Board of Directors.

Integrated Report 2023

As well as promoting the study and development of human resource development systems, the implementationof an engagement survey was also proposed as a countermeasure. At the time of this evaluation, the systems arestill in the process of being developed or the results of the surveys are being analyzed, and continued efforts are
required for discussion and verification based on these measures.

Extracted issues
and initiatives

Based on the results of the evaluation above, we will identify the following issues to improve corporate value
and further demonstrate the functions of the Board of Directors, and we will proceed with initiatives.
(1) Monitoring the medium-term management plan (2) Setting effective KPIs
(3) Deepening discussions on sustainability issues (4) Enhancing discussions on human resource strategies(5) Further strengthening the information provision system

Compliance
In order to remain a business that can earn the trust of society and live up to its expectations, we makeefforts to foster a corporate culture focused on compliance and enhance the awareness of executives andemployees.
Code of Conduct
Our basic concept for various activities has been formulated and upheld as “the Code of Conduct of the Mitsubishi
Paper Mills Group.” This applies to all executives and employees of the Mitsubishi Paper Mills Group, and serves as a
guideline for daily activities.
In March 2023, in light of the increasing importance of sustainability,
Click here for thereference site
we revised our Corporate Code of Conduct to clarify our emphasis on
Code of Conduct
compliance and safety.

Training Regarding ComplianceIn this company’s group, we use a cascade method of training, where line managers first receive training, and then the training is extended
to all employees at their workplaces, including temporary and part-time employees. In FY 2022, all employees of group companies in Japan
held discussions on the themes of the revised Whistle-blower Protection Act and the whistle-blower system. After each person considered
the matter, discussions were held. 2,822 people participated. For FY 2023, we are currently conducting company-wide training on the themeof harassment.

Training Regarding Laws, Regulations, Etc.
In order to foster the knowledge of laws and regulations on business operations andlegal mind, we regularly hold in-company seminars while inviting experts, including lawyers.
Before the company group’s full-scale human rights due diligence initiatives, we set thetheme of various issues related to corporations and human rights, and we conducted video
seminars within the group.
In addition, the Legal Affairs and Compliance Group writes explanations of laws andregulations and posts them on the intranet, in an effort for improvement on a companywide level.

Data Sectionc. F unctions of
the Board of
Directors

The frequency of meetings, the management of proceedings, and tracing of items to be resolved are generally
appropriate. In particular, the establishment of the outside officer management briefing sessions from April 2022 hasbeen evaluated to contribute to improve the information sharing system with outside officers, utilize the knowledgeof outside officers, and improve the quality of deliberations. In order to further demonstrate the functions of outside
officers, it is necessary to consider initiatives such as improving the selected agenda for this briefing session andhaving outside officers participate as observers in internal meetings. In addition, issues have been raised regarding
further accelerating the provision of board meeting materials and improving the deliberation process for importantmatters.

b. Company-wide
succession andhuman resources
strategy

Building a foundation thatsustains the creation of valuea. Compositionof the Board of
Directors

In an effort to stimulate discussion and improve the quality of deliberations, as stated in (1)-(2), the executiveside has set up preliminary briefings for important matters and has made them regular to improve the information
provision system. We have also quantified the criteria for re-deliberation to the Board of Directors and haveestablished a system that allows the Board of Directors to appropriately exercise its monitoring and supervisory
functions. In the future, it will be necessary to improve the management of briefing sessions, and continued
attention needs to be paid to the allocation of time for deliberation of important matters. On the other hand, inorder to speed up the provision of materials, it is necessary to continue to review sharing methods and continuing
efforts to secure time for scrutiny. In addition, there is a need for continued improvements in broader discussions
regarding sustainability initiatives.

Growth strategy thatcreates value

Evaluationa. Invigorating
discussions
on importantmanagement
issues andimprovingthe quality ofdeliberations

Value Creation Story

Step1

Based on the evaluation above, we will evaluate the issues identified in last year’s effectiveness evaluation:((1) Invigorating discussions on important management issues and improving the quality of deliberations, (2) Companywide succession and human resources strategies).

Introduction● Evaluation process(2) Improvement status of issues identified in the previous year’s effectiveness evaluation

Contents: “Business and Human Rights,
Human Rights Due Diligence”
Lecturer: Sayaka Kano, Attorney, Anderson,
Mori & Tomotsune Law Office• Global and domestic trends in business and human rights• Mitsubishi Paper Mills Group Human Rights Policy established• How to proceed with human rights due diligence

Internal Whistleblowing System
This company’s group has established internal and external hotlines that are available to executives and employees working within thiscompany’s Japanese group (including part-time employees, temporary employees, and those who have retired within 1 year). Reports to the
hotline are through a system we have in place that allows direct reporting to the company’s Internal Audit Department or an external specialist
company, and this ensures that information is communicated to top management in strict confidentiality. In addition, the whistle-blowing
status is checked at the regularly held meeting of the Compliance Committee, and reported to the Board of Directors.
Mitsubishi Paper Mills Group Integrated Report 2023

65

Corporate Governance

Information disclosure and public relations

The Risk Management Committee, which is supervised by the General Affairs Department, oversees Group-wide risk management
efforts based on the sustainability promotion structure. Divisions at company headquarters, committees, and business sites areworking on a variety of measures to strengthen risk management, including the establishment of various rules and manuals forresponding to relevant risks, development of prevention systems and drills, and formulation of recurrence prevention measureswhen problems occur.

The Mitsubishi Paper Mills Group expresses its commitment to transparency in its business activities in the Mitsubishi Paper Mills
Group Code of Conduct which the Group has established and publicized its Disclosure Policy based on The Group and has declaredthat it will practice the timely and proper disclosure of corporate information. We have also established the “Information Disclosure
Regulations” for ensuring that stakeholders receive an accurate, timely, and fair disclosure of information on a continuous basis, with
our Public Relations and General Affairs Office in charge of managing these efforts through regularly held public relations sessions
and managing 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.

Risk Management System

Risks to safety andhealthRisks of productsafetyQuality accident
Late response to climate change
Violation of environmental regulations● Building a Crisis Management System

Currently, we monitor risks categorized into 22 types across theorganization, analyze the impact and occurrence frequency of eachrisk, and organize them into a risk map. We are working to regularly
identify and analyze risks to improve the effectiveness of our risk
management.

The Mitsubishi Paper Mills Group formulated “the Mitsubishi
Paper Mills Group’s Crisis Management Manual” to respond 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, weregularly conduct various drills and operation tests at every businesssite and on a scale that involves the entire company, and work to
identify and resolve issues. We have run drills using the safety checksystem at business sites and Group companies in Japan to build aGroup-wide crisis management system. We have also been working
to prevent the spread of COVID-19 by combining telework andstaggered working hours.

● Enhancing Information Management
The Group practices efficient and integrated use of information andworks to manage it properly. Along with establishing “the Information
Management Regulations” that set forth our measures for managing
and protecting information handled in our business activities, wehave codified a guideline for upholding these regulations in the formof “the Information Handling Guidelines.”● Creation of a Business Continuity Plan (BCP)The Mitsubishi Paper Mills Group’s experience with the HanshinAwaji Earthquake and Great East Japan Earthquake has impressedon it the need for strengthening emergency preparedness. We
are building an effective business continuity plan informed by ourexperience in recovering from profound devastation.

66

Mitsubishi Paper Mills Group

Integrated Report 2023

Discuss and verify

Financial
Services
Agency

Mass
Media

Mass
media
reporting

Financial Services Agency’s website

Mitsubishi Paper Mills’ website and other channels

Stakeholders

General Affairs Department /Accounting Department

Prepare documents
for disclosure
Provide information

Information
disclosure

Tokyo Stock
Exchange

Communication● 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 primarily
provides earnings highlights, an IR calendar, an IR library (with access to annual
business reports and medium-term management plan materials), General Meetingof Shareholders presentation materials,stock information, etc.

Click here for the reference site

IR Information● Video Gallery
In order to help people better understand our products and our efforts tocontribute to a green society, we havelaunched the “Mitsubishi Paper Mills
Official Channel Green Webcast”. Withthe theme of “Green”, we introduce awide range of information, including
the state of our company-owned forests, our products, and events. Pleasebe sure to subscribe to our channel.

Data Section● Risk Map Enhancement

Director in charge
Site Manager(Division General Managers) ◀
(Head Office Department Managers)

Timely disclosure

TSE’s website

Building a foundation thatsustains the creation of value

Risks to theenvironment

Industrial accident

Continued implementation of compliance education and thorough dissemination of an internal reporting system
Preparation of an antitrust compliance manual and continuous implementation of compliance education
BCP formulation, cultivation of disaster prevention awareness, implementation of disaster prevention drills,
sharing of disaster prevention information
Horizontal dissemination of accident cases at other mills, inspection of accident reports from a technicalperspective, and formulation of measures to prevent recurrence
Horizontal dissemination of quality complaint cases, quality audits, sharing quality trouble status andrecurrence prevention measures at company-wide meetings, efforts to eliminate major quality trouble
Promotion of energy saving, reducing the minimum output of coal boilers, switching from coals for fuel,setting CO2 reduction targets
Horizontally spread information on environmental accidents at other factories, compile trends in pastenvironmental trouble, and implement environmental measures prioritize over the medium to long term

Information
disclosure manager◀

Growth strategy thatcreates value

Risk of legal violation

Promote multiple purchasing, consider raw materials, improve yield and energy intensity◀

Risk of businessenvironment volatility

Countermeasures
Switching to non-Western paper brands such as pulp and wrapping paper, and changing the business portfolio
Diversify (expand) sales destinations and secure alternative procurement routes for raw materials

Department in charge of information disclosure

Board of Directors(President/CEO)

Initiatives for major risks
Principal risk contents
Decline in demand for Western paper
International situation changes and turmoil
Procurement environment changes for raw
materials, fuel, etc.
Compliance violation
Competition Law violation
Natural disasters such as large-scale
earthquakes and floods

Stock exchange information

Notification of
finalized matters

Director in charge ofthe General Affairs Department

Environmental Conservation
Committee

Information handling manager

Risks to the environment

Information Disclosure System◀

Product Liability (PL) Committee◀

Safety and Health Committee

Risks of product safety◀

Risks to safety and health◀

Compliance Committee

Information Disclosure Policy◀

Risk of legal violation

Click here for the reference site

Annual securities
reports

Value Creation Story◦Sustainability Promotion Committee
Develops basic policies for the overall sustainability of our group,compiles and summarizes annual activity plans, etc.

Risk of business environment volatility Management meeting◀

◦Risk Management Committee
To respond systematically, organically, and effectively to the risks
that exist in our group, we oversee management for the entire groupacross the organization.

Disclosure of risk information

Risk response◀

Risk assessment◀

Risk analysis◀

Risk identification

Introduction

Risk Management

We would like to introduce this video to all
stakeholders to help them understand ourgroup.

YouTube channel
Mitsubishi Paper Mills Limited Official Channel

Mitsubishi Paper Mills Group Integrated Report 2023

67

Corporate GovernanceOutside Director Roundtable Discussion

The first year of the medium-term
management plan has come to an end,
but how do you rate the management?

Atsuko Watanabe

Outside Director

Outside Director

As an outside director, what do you feel
about Mitsubishi Paper Mills currently?

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

Data Section

68

Building a foundation thatsustains the creation of value

Kataoka This is my fifth year as an outside director,
but I have been involved with Mitsubishi Paper Mills
for about 15 years as a member of an independent
committee. Looking back at the past, in addition
to external factors such as the impact of the Great
East Japan Earthquake, the COVID-19 pandemic,
and the Russia/Ukraine issues, the paper industry
continues to face an extremely difficult businessenvironment in the modern era of a paperless
society. Under these circumstances, various efforts
have been made in response to revisions to items
such as the Corporate Governance Code, but withthe current system under President Kisaka, thespeed of reform has rapidly increased. I feel that theresults of our reforms are starting to become visible
as we work on the “selection and concentration”
strategy outlined in our medium-term management
plan.
Shinohara This is my second year as an outside
director. Unlike Mr. Kataoka and Mr. Watanabe, who
are attorneys-at-law, I offer my opinions based on
my experience in corporate management. I believe

there are six points in corporate management. The
points are: “Approach our work with integrity”,“Accurately keep up with the times as a business that
responds to change”, “Aim to secure stable growth
and appropriate profits”, “Support employees’ selfactualization”, “Contribute to society and preserve
the global environment”, and “Always be gratefulto stakeholders”. We have expressed our opinions
on Mitsubishi Paper Mills by taking into accountthe principles of the CG Code. As Outside Director
Kataoka said, demand for paper is declining, but
Mitsubishi Paper Mills’ technology is original andinnovative. I think it’s important to take advantageof that.
Watanabe This was approved at the General
Meeting of Shareholders in June this year, so I
have only recently become an outside director. Allof the executives at Mitsubishi Paper Mills comefrom a variety of backgrounds, and I feel that it
is a very diverse organization. I am also the firstfemale director of the company, and I hope that in
the future there will be more female executives andmanagers, not only outside the company, but also
within the company.

Growth strategy thatcreates value

We will continue making recommendations fromthe unique perspective of an outside director topromote the growth of the organization.

Value Creation Story

Yoshihiro Kataoka

Outside Director

Kataoka Compliance is now a matter of course
for companies, and companies are required torealize “integrity management”, which means“honesty” and “honourability”, and “organizational
integrity”, which clarifies the company’s reason forexisting and contributes to society. I believe that therevision of the Code of Conduct of the Mitsubishi
Paper Mills Group this spring is the first step
towards integrity and purposeful management.
It is important that all executives understand thisCode and connect its philosophy to the actions of
all employees.
Watanabe Educating people is also important.
Mitsubishi Paper Mills is a manufacturing company,
so we need to create an organization that prevents
workplace accidents and long working hours
through education and training. We also provide
training and support for issues that cannot beseen from performance figures, such as childbirth,childcare, and nursing care, which each employee
has to deal with while working. Training for building
appropriate relationships is also necessary. I hopethat such topics will be brought up at Board of
Directors meetings.
Shinohara Since corporate governance means
collaborating with all stakeholders in a transparent,
appropriate, and equal manner, we also recognizethat it is also about creating a company where
employees can also work autonomously. If thecompany becomes an enjoyable place to workin, there will be no fraud, and product quality will
improve. We also believe that by allowing employees
to experience working in various departments, each
employee will be able to identify problems within thecompany and realign themselves with the strengthsof Mitsubishi Paper Mills, which will lead to further
development.
Kataoka Until now, Japanese manufacturers
have succeeded in improving quality by identifying
business risks and eliminating them. On theother hand, I feel that people are becoming too
nervous about new opportunities and the risks
that come with them, leading to the stagnation of
the Japanese economy. From now on, I think weneed to not only deal with risks, but also be able toseize opportunities and connect them to the future.
I believe it is the responsibility of outside directors
to make recommendations from this perspective.

Introduction

Mitsunori Shinohara

Kataoka We are proceeding with rationalization
through the sale of the Flensburg mill in Germany,
the transfer of Katsumata Co., Ltd.’s business, andother elimination and consolidation. Oji Holdings
has become the largest shareholder for five years,
but as an outside director, it is important to keep an
eye on conflicts of interest and supervise to ensurethat the interest of other minority shareholders are
not harmed, and I recognize this as a responsibility.
However, this is not the case, and our businessalliance with Oji Holdings continues to generatesynergistic effects. In terms of numbers, we haveachieved results of nearly 3 billion yen annually. I
hope we can effectively publicize these points as
well.
Shinohara Over the past year, I feel that
Mitsubishi Paper Mills has been focusing on risk
management, including identifying a wide rangeof risks, sharing risk information, and responding
to risks. We are also working on human resource
development, especially executive training, withan eye to the future. I think we are becoming anorganization where employees are rewarded fortheir hard work. While strengthening our foundation,
we are steadily addressing the challenges of our
medium-term management plan.
Kataoka I feel that the Board of Directors is
becoming more active, with a greater numberof communications and more diverse viewsexchanged each year. I’ve heard of companies thathave an aura of “keep quiet”, but Mitsubishi Paper
Mills doesn’t have that kind of atmosphere.
Watanabe On the other hand, this was also ayear in which our business performance was greatly
affected by external factors such as soaring raw
material and fuel prices. I think things will be difficult,but I think the challenge going forward is to createa system that is less susceptible to external factors.
Shinohara I completely agree. To achieve this,we will utilize our technical power and increase
the product value. I think we need to develop
competitive, advanced products that can ensureprofits under any circumstances. Mitsubishi Paper
Mills mainly produces B2B products, but it could
also take on the challenge of expanding into theB2C domain by drastically changing its thinking
and incorporating women’s perspectives. I would
like to see more women participating in businessnegotiations and product development.

What do you think should be donein the future to strengthen corporate
governance?

69

Corporate Governance

Audit & Supervisory Board Member (Outside Audit & Supervisory Board Member) Roundtable Discussion
From your standpoint as an Outside Audit &Supervisory Board Member, what aspectsof Mitsubishi Paper Mills are you currently
paying attention to?

Nobuko Otsuka
Standing Audit & Supervisory Board Member
Outside Audit & Supervisory Board Member

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Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

Data Section

Tonooka This marks the 7th year since I was
appointed corporate auditor in 2016, and the“Outside Officer Management Briefing Session”
was established in April 2022, when the mediumterm management plan started and President
Kisaka was appointed. As a result, there have beenmajor changes in the duties of corporate auditors.
This is intended to strengthen and improve theinformation sharing system between the company
and outside officers, and the amount of information
available to me as a corporate auditor has increased
significantly. Having the three-party audit system,
where our Internal Audit Department, the auditing
company, and the corporate auditors are involved,
is considered to be the essential requirement forvalid auditing. Given these changes, however, we
would like to deepen mutual cooperation evenbeyond the three-party system in the future.
Takizawa Another major change is that the
number of full-time auditors has increased from
one to two. This means that the amount, breadth,and depth of internal information shared with
part-time staff like us has doubled. I believe that
Mitsubishi Paper Mills is currently in an important
period of change, breaking way from the traditional
paper manufacturing industry and sowing various
seeds with an eye on the medium to long term.
Under such circumstances, the appointment of
Ms. Otsuka, who has experience as an auditor in
the paper industry, and Mr. Kusuda, an equipment
specialist with experience as a factory manager,means that they will be able to address various
issues and risks within the company, and I believethat this is the best combination.
Otsuka Amidst the common management issues
faced by the pulp and paper industry, we havedeclared our commitment to “creating value for a
new Mitsubishi Paper Mills Group”, and we cansay that we are at an important turning point in ourmanagement. When it comes to major businessreforms and goals associated with them, governanceand compliance tend to take a back seat or fall apart.
We believe that strengthening the audit system has
an important significance in protecting the corporate
governance of our group and supporting the future
Mitsubishi Paper Mills Group.

Building a foundation thatsustains the creation of value

As we enter the second year of the mediumterm management plan, please tell us about
the current status of the audit system

Tonooka This fiscal year, we aim to achieve an
operating income of 6 billion yen while proceedingwith our ongoing structural transformations. This isa very big challenge, so I will be looking closely to see
if the proper process is being followed to achieve
the goal. It is also important to check managementfrom a variety of perspectives, including not only
shareholders, but also employees, customers,
business partners, and society.
Takizawa As Mitsubishi Paper Mills is a premium
listed company, I would like to pay attention towhether it satisfies various stakeholders. I believethat the disclosure of non-financial information
will expand and attract more attention in the
future, so I think we need to make sure that themarket evaluates the value of so-called intangible
assets such as technology, patents, and humanresources. In addition, since I was appointed asa corporate auditor, I have visited our main millsin Hachinohe, Kitakami, Kyoto, and Takasago,
and I would like to continue to visit the sites andlisten to the opinions of our employees. From mystandpoint as an outsider, I will work with outside
directors to identify issues facing the company.
Otsuka An effective audit depends on how muchinformation can be collected, analyzed, and judged
appropriately. I would like to take advantage ofmy full-time position, where I have easy access to
information, to listen to the opinions of those within
the company, share wisdom among corporate
auditors, and make accurate recommendations.
For many years, I have approached my work with a“client first mentality”, and from the standpoint of an
outside officer, I am always aware of transparency
and fairness in audits. I would like to fulfill my
responsibilities for each stakeholder that lies ahead.

Growth strategy thatcreates value

We will continue to monitor the fairness and transparency ofmanagement under a stronger audit system

What areas would you like to workon in the future as an Outside Audit &Supervisory Board Member?

Value Creation Story

Hiroaki Tonooka
Outside Audit & Supervisory Board Member

Introduction

Satoshi Takizawa
Outside Audit & Supervisory Board Member

Tonooka It was mentioned earlier that thecompany is at a turning point, but as a corporate
auditor, I think it is important to see how employees
perceive major transformations such as the mediumterm management plan. For example, in Japanesecompanies, an excessive sense of loyalty to thecompany can sometimes endanger the safety andhealth of employees. When people are saying “It’s adifficult time for the company, so let’s work harder”
and take on an unreasonable amount of burdens
at work, is there not a connection? This is not to
say that a company-loving spirit is bad, but thefirst priority is to be a company where employees
are happy and feel motivated. I believe that this will
ultimately bring good results to shareholders andcustomers, and increase corporate value.
Takizawa While business executives view
business strategies from a combination of medium
to long term and short term perspectives, many
employees may tend to view work in a shorter spanof time. Therefore, it is important for our managers
to communicate with the employees to make surethat they clearly understand the significance ofsome transformations which may be difficult but
essential for our survival in medium to long terms.
Mitsubishi Paper Mills conducts and “engagement
survey” to quantify the strength of the bond between
employees and the company, and employees’
awareness of the company is an important factor increating the corporate culture. I think a fixed-point
observation should be done on a regular basis.
Otsuka I also place a great importance on
corporate culture, as it is the cornerstone of acompany’s value creation. I believe that this does notdepend on the “natural-born goodness” theory ofindividual employees, but rather requires managers
to properly protect and develop their employees bycreating systems as an organization. In addition,
we have added a new female outside director, andwe hope that the infusion of diverse perspectives
will create a positive chemical reaction.
Tonooka New graduate recruitment has also
resumed, and it seem that many new employees
are women.
Otsuka We also focus on human resource
management, including recruitment and training.

Nowadays, companies don’t choose people,
people choose companies. Companies that do
not allow employees to work in a fun and energetic
manner will not be chosen, and as a result they will
not be able to produce attractive products.
Tonooka Exactly. If young people are not hired,the company will age. New recruits grow andlead the next newcomers. I hope that this cycle
continues.

71

Data Section■ Consolidated Balance Sheets■ Consolidated Statements of Income・Consolidated Statements of Comprehensive Income(Unit: million yen)

(Unit: million yen)

(Unit: million yen)

FY2021

FY2022

FY2021

FY2022

FY2021

FY2022

FY2021

FY2022(March 31, 2022)(March 31, 2023)(March 31, 2022)(March 31, 2023)(March 31, 2022)(March 31, 2023)(March 31, 2022)(March 31, 2023)

Sales

181,920

209,542

Cost of sales

156,151

182,288

1,098

△563

Gross profit

25,76827,253

Selling, general andadministrative expenses

26,01726,285 Valuation difference on othersecurities

745

843

Operating profit or loss (△)

△248

968

 Foreign currency translation
adjustment

40

171

 emeasurements of definedR
benefit plans, net of tax

5,070

2,189

2

△12

5,858

3,192

6,957

2,628

6,954

2,620

2

8

AssetsConsolidated Statements of Income

Liabilities
Current liabilities

Current assets

8,074

33,87938,470   Merchandise and finished goods

23,44625,257   Short-term loans payable

56,433

61,467   Work in process

6,487

6,322

   Commercial paper

6,000

5,000

    Raw materials and supplies

10,857

18,498   Lease obligations

380

509

   Other

3,969

4,166

   Accrued expenses

6,728

6,597

   Allowance for doubtful accounts

△130

△92

   Income taxes payable

475

302

   Total current assets

95,282109,024   Contract liabilities

500

371

-

1,614

Foreign exchange gains

4,043

2,399

Other

102,720

110,457   Reserve for loss on business
transfer

Non-current assets   Property, plant and equipment

98,523

96,663     Cumulative depreciation△76,122△76,243     Accumulated impairment loss

△1,065△716     Buildings and structures, net

21,335

19,703    Machinery, equipment and vehicles

357,786

359,855     Cumulative depreciation△319,028△323,296     Accumulated impairment loss

△1,063△1,640     Machinery, equipment and vehicles, net

37,69434,918    Land

21,276    Leased assets   Total current liabilities

28,710

3,541

3,485

Non-operating income
Interest income

30

27

Dividend income

531

652

1,066

670

1,038

983

436

545

3,104

2,878

Interest expense

581

574

 
Share of profit of entities accounted
for using equity method

Total non-operating income
Non-operating expenses

Non-current liabilities

32,603   Lease obligations

586

596

Other

309

182

   Deferred tax liabilities

694

938

Total non-operating expenses

891

757

24

53

General Income

1,964

3,089

69

49

Special Profit

20,625    Provision for share benefits   Provision for directors’
retirement benefits    Net defined benefit liability

9,277

7,603

53

39

4,050

4,651

   Asset retirement obligations

885

885

△2,893△3,512   Other

2,048

1,827

     Leased assets, net

1,156

1,138

   Total non-current liabilities

43,54544,559    Construction in progress

1,638

733

146,265

155,016    Other

8,830

8,861

     Cumulative depreciation

Total liabilities
Net assets

Gain on disposal of non-current assets
Subsidy income
Gain on sales of investment securities
Gain on business transfer 
Reversal of allowance for doubtful
accounts for subsidiaries and associates
Other

Shareholders’ equity

-

347

1,394

4

840

-

285

-

430

35

3,004

427

     Cumulative depreciation△7,308△7,426     Accumulated impairment loss

△32

△299

   Capital stock

36,561

36,561     Other, net

1,489

1,135

   Capital surplus

6,488

6,524

Loss on disposal of non-current assets

402

263

    Total property, plant and equipment

84,59078,256   Retained earnings

13,962

13,357

Non-current assets reduction loss

△430

329

   Treasury shares

△228

-

Impairment loss

1,317

52

   Total shareholders’ equity

56,78456,012

Loss on business transfer

-

3,192

Special severance benefit

433

651

Loss on valuation of investment securities

779

12

395

-

85

22

3,414

4,523

1,554

△1,006   Intangible assets

1,864

2,379

    Total intangible assets

1,864

2,379

    Investment securities

19,86821,605    Long-term loans receivable

1,215

765

    Net defined benefit asset

10,662

12,035

1,384

2,132

   Investments and other assets    Deferred tax assets

1,081    Other

923    Allowance for doubtful accounts

△70

△64

    Total investments and other assets

34,14137,398   Total non-current assets

120,596

118,034

215,879

227,058

Total assets Accumulated othercomprehensive income   Valuation difference on othersecurities   
Adjustment for foreign
currency exchange   Remeasurements ofretirement benefits   Total accumulated othercomprehensive income
Non-controlling interests
Total net assets
Total debt and net assets

4,688

5,532

952

1,111

7,182

9,372

12,82416,015

5

13 Loss on valuation of shares ofsubsidiaries and associates
Other
Total special losses
Net profit or loss before taxes
and other adjustments (△)
Income taxes-current

881

354

△425

△797

455

△443

1,098

△563

2

7

1,096

△571

69,61372,041

Income taxes - deferred

215,879

227,058

Income taxes
Net profit or losses (△)

Net profit or loss attributable to parent
company shareholders (△)
Integrated Report 2023

Total other comprehensive income
Comprehensive income(Breakdown) Comprehensive income
attributable to owners of parent Comprehensive income
attributable to non-controllinginterests

Special Losses

Net income attributable to noncontrolling shareholders

Mitsubishi Paper Mills Group Share of other comprehensive
income of entities accounted forusing equity method

Data Section    Other

Total special profit

Other comprehensive income

Building a foundation thatsustains the creation of value

29,960   Long-term loans payable

Net profit or losses

Growth strategy thatcreates value    Buildings and structures   Other

24,617

Value Creation Story

7,724   Accounts receivable-trade

8,325

Consolidated Statements ofComprehensive Income

Introduction    Notes receivable - trade   
Notes and accounts
payable - trade   Electronically recorded
obligations

9,047   Cash and deposits

72(Unit: million yen)

Mitsubishi Paper Mills Group Integrated Report 2023

73

Data Section■ Consolidated Statements of Changes in Net Assets

Consolidated cash flow statement

Previous fiscal year (from April 1, 2021 to March 31, 2022)(Unit: million yen)

(Unit: million yen)

Shareholders’ equity

Balance at the beginning of the term

Capital surplus

Retained earnings

Treasury shares

Total shareholders’ equity

36,561

8,555

△152

36,561

8,555

10,967△168
10,798△152

55,932△168
55,763

△75
0

1,096
△75
0

Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy
Changes during the term

2,067
1,096

Profit attributable to owners of parent
Acquisition of treasury shares△0

Disposition of treasury shares
Total amount of changes during the term
Balance at the end of the term

36,561△2,067
6,488

△75
△228

3,163
13,962

1,020
56,784

Available-for-sale securities Foreign currency translation
Net defined benefit
Other comprehensive
Valuation difference
adjustment
Cumulative adjustment amount total accumulated income

3,942

910

2,112

6,965

3,942

910

2,112

6,965

Cumulative effects of changes in accounting policy
Balance at the beginning of the term, reflecting changes in accounting policy

Non-controlling
Total net assetsinterests

4 62,902△0 △169
4 62,733

Changes during the term
Profit attributable to owners of parent
Disposition of treasury shares

Balance at the end of the term

745
745
4,688

42
42
952

5,069
5,069
7,182

5,858
5,858
12,824Current consolidated fiscal year (from April 1, 2022 to March 31, 2023)

1,096
△75
0
0
5,859
0
6,880
5 69,613(Unit: million yen)

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’ equity

36,561

6,488

13,962△228

56,784

△214
11

△571
△214
11
2

Changes during the term

△571

Loss attributable to owners of parent (△)
Acquisition of treasury shares
Disposition of treasury shares
Changes in consolidation scope
Changes in items other than shareholders’equity during the term (net)Total amount of changes during the term

35

△32

36,561

35
6,524

△604
13,357

△202
△430

△771
56,012

Non-controllinginterests

Total net
assetsValuation difference on
available-for-sale securities

Foreign currencytranslation adjustment

Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income

4,688

952

7,182

12,824

5 69,613

3,191
3,191
16,015

△571
△214
11
2
3,199
8
8
2,428
13 72,041

Changes during the term
Loss attributable to owners of parent (△)
Acquisition of treasury shares
Disposition of treasury shares
Changes in consolidation scope
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

74

Mitsubishi Paper Mills Group

Integrated Report 2023

Equity method investment profit or loss (△ Increase)
Foreign exchange profit or loss
Interest expense
Investment security sales profit or loss (△ Increase)
Valuation of investment securities profit or loss (△ Increase)
Fixed asset sales profit or loss (△ Increase)
Business transfer profit or loss (△ Increase)
Fixed assets reduction losses
Subsidy income
Decrease / Increase in inventories (△ Increase)
Increase / Decrease in trade payables (△ Decrease)
Other
Subtotal
Subsidies received
Interest and dividend income received
Interest expenses paid
Income taxes paid
Cash flows from operating activities

843
843
5,532

158
158
1,111

2,189
2,189
9,372

△6,255
116
△11
2,759
△0
743
840
△750
△2,557△4,546
717
△11
12
△0
450
△186
△3,565△416△1,0009,800△13,998
△398
△75
0
△1
△6,091296△6,654
15,7019,047

3,774△1,00014,288△11,196
△441
△214
△0
5,209
213
△863
9,047
142
8,325

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
Proceeds from business transfer
Other
Cash flows from investing activities

Accumulated other comprehensive income

Balance at the beginning of the term

Increase / Decrease in reserves for stock benefits (△ Decrease)

Cash flows from financing activities
Net increase / decrease in short-term loans payable (△ Decrease)
Net increase / decrease in commercial paper (△ Decrease)
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Purchase of treasury shares
Proceeds from sales of treasury shares
Dividends paid to non-controlling interests
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase / decrease in cash and cash equivalents (△ Decrease)
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents due to new consolidation
Cash and cash equivalents at end of period

Mitsubishi Paper Mills Group Integrated Report 2023

Data Section

Balance at the end of the term

Increase / Decrease in reserves for directors’ retirement benefits (△ Decrease)△1,006
8,287
52△1,520
167
△19
29
△679
△670
△573
574
△4
12
223
3,192
329
△347
△4,498△8,115
3,293△1,243△2,517
547
680
△535
△896
△2,721

Building a foundation thatsustains the creation of value

Shareholders’ equity

Balance at the beginning of the term

Increase / decrease in asset liabilities regarding retirement benefits (△ Decrease)

1,554
8,489
1,317
281
218
14
24
△562
△1,066△509
581△1,394779
349△840△12,551
96
6,083
△694
2,174
200
562
△584
△652
1,698

Growth strategy thatcreates value

Acquisition of treasury shares

Total amount of changes during the term

Increase / decrease in assets regarding retirement benefits (△ Increase)

Increase / decrease in trade receivables (△ Increase)

Compensation for losses

Changes in items other than shareholders’ equity during the term, (net)

Depreciation Expenses

Value Creation Story

Accumulated other comprehensive income

Balance at the beginning of the term

Net profit or loss before taxes and other adjustments (△)

Interest and dividend income

Changes in items other than shareholders’ equity during the term, (net)

FY2022(March 31, 2023)

Cash flows from operating activities

Impairment loss

△2,067Compensation for losses

FY2021(March 31, 2022)

Introduction

Capital stock75

Data Section■ Company Profile/Company Data
Company Profile

Primary products: Printing paper, white paperboard, and copier paper

MPM Oji Home Products

Kitakami MillPrimary products: Sanitary paper

Primary products: Photographic base paper andsanitary paper

MPM Oji Eco-Energy Co., Ltd.

Toho Tokushu Pulp Co., Ltd.

Principal business: Biomass power generation◎ Kitakami Mill

Research & Development Laboratory

Primary products: Non-wood pulp

Hachinohe Development Office in the
Product Development Department

Toho Tokushu Pulp Co., Ltd.

Takasago Mill◎ Koyama MillPrimary products: Non-woven fabricproducts, thermal paper, carbonlesspaper, inkjet paper, and specialty paper

Principal product: Non-wood pulp

Research & Development Laboratory

Head office

Takasago R&D Laboratory

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

Mitsubishi Oji Paper Sales Co., Ltd.

Primary products: Photographic paper,
printing plate materialsPhoto inkjet paper
Research & development site

Offices: Osaka Office, Nagoya Office, Tohoku Office,and Kyushu OfficePrinciple business: Sale of paper, chemicals, etc.

KJ Specialty Paper Co., Ltd.
Primary products: Specialty paper (decorative
laminate base paper, impregnated decorative sheets,
base paper for wallpaper, masking tape backing, etc.)● Total number of authorized shares 90,000,000● Total number of outstanding shares 44,741,433● Total number of shareholders 16,277(285 year-over-year decrease)
Financial institutions:
30 parties
7,266,826 shares
16.3%

Financial instruments traders:
40 parties
892,215 shares
2.0%

Total
16,277 people
100.0%

Click here for the reference site

IR Information

Other corporations:
208 parties
19,068,956 shares
42.6%★ Head Office
Domestic Sales
Locations★ Domestic
Production Facilities
Hachinohe Mill

Kitakami Mill

Toho Tokushu Pulp Co., Ltd.
(Kitakami Mill, Koyama Mill)

Takasago Mill

Kyoto MillKJ Specialty Paper Co., Ltd.

Data Section

Foreign corporations, etc.:
98 parties
2,118,393 shares
4.7%

Building a foundation thatsustains the creation of value

Kyoto R&D Laboratory

Growth strategy thatcreates value

Business overview

Hachinohe Mill

Kyoto Mill

Private shareholders
and other entities:
15,901 parties
15,395,043 shares
34.4%

Click here for the reference site

Domestic Offices and Mills

Value Creation Story

Main Business Activities
The Mitsubishi Paper Mills Group is primarily engaged
in the manufacturing, processing, and sale of paper,
pulp,functional non-woven fabric, battery separators andelectronic materials, and the main products and servicesof each division are provided below.
[Functional Materials Business]
Non-woven fabric, filters, battery separators, specialty
paper, electronic materials, inkjet paper, photographic
paper, printing plate materials/printing devices, CTP
software, various processing chemicals, communication
paper and rewritable media[Sustainable Fiber Materials Business]Coated and uncoated graphic papers, magazine paper,
specialty printing paper, hygienic paper, packing paper,electrical insulation press board, high-quality white
paperboard, specialty white paperboard, base paper forphotographic paper, other specialty paper, bleached kraft
pulp, specialty pulp, and warehousing and transportrelated business[Other Businesses]
Engineering operations, sports facility management,
insurance agency business, and real estate business

Main Group Companies
Mitsubishi Oji Paper Sales Co., Ltd.
MPM Operation Co., Ltd.
MPM Oji Home Products Co., Ltd.
Mitsubishi Paper Engineering Co., Ltd.
Shin-Hokuryo Forest Products Co., Ltd.
Kyoryo Chemical Co., Ltd.
Takasago Paper Processing Co., Ltd.
Ryoko Co., Ltd.
KJ Specialty Paper Co., Ltd.
Toho Tokushu Pulp Co., Ltd.
Ryoshi Co., Ltd.
NAMITSU Co., Ltd.
MPM Oji Eco-Energy Co., Ltd.
(* Equity method affiliate)
Mitsubishi Paper Holding (Europe) GmbH
Mitsubishi HiTec Paper Europe GmbH
Mitsubishi Imaging (MPM), Inc.
Zhuhai MPM Filter, Ltd.

Introduction

Company Name
Mitsubishi Paper Mills Limited
	MITSUBISHI PAPER MILLS LIMITED
Address 	2-10-14 Ryogoku, Sumida-ku, Tokyo
130-0026, Japan
Representative
Ryuichi Kisaka, President & CEO
Founded1898 (Meiji 31)
Capital Stock
36,561 million yen
Consolidated Number of Employees 3,171
Shareholder Register Administrator
Mitsubishi UFJ Trust and Banking Corporation
Independent Auditor
Ernst & Young ShinNihon LLC

Domestics/Overseas Bases

Overseas Production and Sales Facilities
Mitsubishi HiTec Paper Europe GmbHZhuhai MPM Filter, Ltd.

◎ Bielefeld Mill

Zhuhai, Guangdong, China
Primary products: Various filters

Bielefeld, Germany
Primary products: Thermal paper, carbonless paper, and inkjet paper

Mitsubishi Imaging (MPM), Inc
New York, U.S.
Principle business: Sale of paper and plate materials for photography and printing

76

Mitsubishi Paper Mills Group

Integrated Report 2023

Mitsubishi Paper Mills Group Integrated Report 2023

77