Initiatives for Product Development— Green Innovation —Innovation Promotion Division’s Initiatives Using Our Abundant Wood Resources

New Value Creation through Green Innovation

Our role is to fully utilize wood
resources effectively to solve social
challenges

The Innovation Promotion Division is making use of
our abundant wood resources and various core technologies to contribute to the Oji Group’s green innovation.
In addition to the core technologies that we haveacquired in our paper production business, including
forest tree breeding technology, pulping technology,
paper manufacturing technology, and water treatment
technology, we are acquiring core technologies thatdiffer from conventional paper production industry
technologies, such as wood component refining technology, nano-fibrillation technology, enzymatic andfermentation technologies, and nanostructure processing technology, and promoting the developmentof new materials derived from wood, medical andhealthcare products, and eco-friendly products.

Oji Holdings Corporation
Corporate Officer
General Manager,
Innovation Promotion Div.

Kohei Michikawa
maceutical products using hemicellulose, a main component ofwood, and large-scale cultivation of medicinal plants for the
stable supply of high-quality, domestically-grown raw materials
for Chinese herbal medicines. In addition, we are promoting
the development of cell culture substrates for controlled cellorientation, which are expected to have applications in regenerative medicine.
In the area of eco-friendly products, we are developing products to meet a wide variety of needs for solutions to environmental issues, such as reducing plastic consumption. Specifically, we are manufacturing biomass plastic films for packaging
applications with the aim of reducing carbon emissions derived
from fossil fuels. In addition, we are developing recycling-friendly paper products and composites of biodegradable plastics
and cellulose. We also have developed functional products
such as anti-heat windshield films to reduce the burden on the
global environment.
Further, with the aim of accelerating our green innovationand steadily growing it into a pillar of earnings, we have established the Corporate Business Development Division, andbased on the technologies developed in the Innovation Promotion Division, we are promoting the commercialization of liquid
packaging cartons, including the development of plastic-free
products.
With the promotion of these kinds of new value creation
through green innovation, our target is net sales of 100.0 billion
yen by 2030.

Abundant wood resources

35

×
Newly
acquired coretechnologies

New materials derived from wood
Medical and healthcare
Eco-friendly products

The Oji Group Integrated Report 2023†

Includes those already commercialized

P40 - P42 and other

Various core technologies
Pulping technology

Paper manufacturing technology

Coating technology

Corrugated container converting
technology

Lamination technology

Non-woven fabric manufacturing
technology

Adhesive processing technology

Water treatment technology

Film forming technology

Sales target

Wood component refining
technology

Precise pulp-molding technology¥100.0billion/year

Nano-fibrillation technology

Fibrillation and mixing technology

Enzymatic and fermentation
technology

Chemical synthesis technology

Polymerization technology

Nanostructure processing
technology

P37

P39

Newly
acquired coretechnologies

Forest tree breeding technology

Future Green Innovation Initiatives
Core paper
manufacturing
and forestation
technologies

×Social challenges

2030 target

New materials
derived from
wood
P37

P38

Sugar solution
Ethanol
Biomass plastics
CNF (Cellulose nanofiber)
Cellulose polymer pellets
Cellulose mats

Challenge to a new field inlight of the future of
medicine and healthcare

Medical andhealthcare
P39

Wood-derived
pharmaceutical products
Cell culture substrates forcontrolled cell orientation

Initiatives for Product Development — Green Innovation —Under the Group basic policy of “Initiatives for Product Development—Green Innovation—,” our Innovation Promotion Division aims to grow healthy forests, create products that utilize
those forest resources, and deliver them to society. We arepromoting research and development focusing on threethemes to solve social issues by making full use of wood resources and refining various core technologies cultivatedthrough forestation and papermaking over the 150 years since
the company's founding.
First, in the area of new materials derived from wood, we aredeveloping new materials with the aim of creating new value
for pulp and venturing into new businesses. Specifically, weare compounding cellulose nanofibers (CNF) with natural rubber and exploring the possibility of new applications for thiscomposite material. Further, we are promoting the development of products such as cellulose mats and cellulose polymer
pellets to make effective use of cellulose materials. We arealso manufacturing sugar solution from wood that will becomea key raw material for a variety of biomanufacturing in test basis. By combining it with fermentation, we will be able to convert this sugar solution into polylactic acid and other biomass
plastics and into ethanol, which is expected to become a raw
material for sustainable aviation fuel (SAF), with the aim of decarbonization.
Next, in the area of medical and healthcare, with an eye on
the medical care of the future, we are expanding our business
into new fields. We are working on the development of phar-Core forestationand paper
manufacturing
technologies

Creating new value for pulp

Medicinal plants

Using technologies
cultivated over 150 years
to solve various
environmental issues

Eco-friendly products
P40

Polylactic acid laminated paper
Aqueous coated paper cup baseBiomass plastic films
Cellulose composites
Eco-friendly heat shielding film

The Oji Group Integrated Report 2023

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Initiatives for Product Development— Green Innovation —New Value Creation through Green Innovation

New Materials Derived from WoodUse of Cellulose That Accommodates Social Changes

Creating New Value for Pulp

To accommodate changes in society and customers’ requirements, we are promoting development for the effective use of cellulose materials, from CNF to pulp.
In the course of developing applications for CNF, we have learned that, in addition to demand for unique functions that are only obtainedby conversion to CNF, there is also demand for the functions that cellulose originally possesses. To meet this demand, as well as expanding applications that make use of CNF’s unique functions, we also embarked on the development of applications for pulp, making
use of cellulose’s original functions. This will enable us to select and propose the cellulose materials that best suit the customers’ requirements, allowing us to expand the fields in which these materials are used.

As paper consumption declines, we will create new value for pulp as a raw material and we will pursue research to extract its potential, develop new materials, and enter new businesses.

Development of Biomanufacturing Technology with Wood
Resources as Raw Materials

Forecast demand for biomass plastics*

4

We are making major contributions to biomanufacturing innovation throughthe development of new materials utilizing our abundance of wood fromsustainable forest management.

Enzymerecovery

Pulp

2020

50,000 t

Challenge for the development of new materials derived from wood
Sugarcane andcorn starch etc.

Woody celluloseHigh
viscosity

Transparency

High elasticity

Ductility

Heat stability

Dispersion
stability

Thixotropy

Dimension
stability

Lightweight

High mechanicalstrength

Raw material
conversion
Expansion of demand for raw materials due
to population growth and hunger

Oji’s abundant resources
No competition with food resources*4 From Fourth Fundamental Plan for Establishing a Sound Material-Cycle Society,
Ministry of the Environment (2018)*5 From Government-Private Sector Council for the Promotion of Introduction of
Sustainable Aviation Fuel (SAF), Ministry of Economy, Trade and Industry (2022)

Polylactic acid

Biomass plastic
made with inedible(woody) raw
materials, so does
not compete withfood resources

Various types ofplastic products(packaging films,
cups, straws,
laminated products,
cutlery, teabags,
masks, etc.)

Polylactic acid synthesis plant

Distillation

Combined withmicro-organisms for use asa key raw material in the
manufacture of a variety ofbiomanufacturing

Fermentation

Separation

After being selected for the Ministry of the Environment’s Demonstration Project for a Plastic Resource
Circulation System toward a Decarbonized Society,we established technology for the manufacture ofwood-derived polylactic acid.

Ethanol

Ethanol and sugar solution pilot manufacturing facility
In addition to providing ethanol and sugar solution inlarge volumes, we will continue to improve our technologies and accelerate our initiatives with the aim of future commercialization. (Inside Oji Paper Yonago Mill)

Shifting fuels,
general-use
plastics, and othermaterials close todaily life tosustainable,
wood-derived
materials

SAF, various
plastics such aspolyethylene andpolypropylene

Proposing Cellulose Materials to Suit the Application

Exploration of Applications with Expected High Consumption of CNF

Effective Use of Cellulose’s Original Functions

To increase consumption of CNF, we are promoting the developmentof CNF composite materials that will enable the provision of CNF’s
unique functions in forms that are easy to handle, and we are exploring
the possibility of new applications for such composite materials.

We are trialing the provision of low-cost cellulose products thatare easy to handle to meet customers’ needs for automotive
components, with a focus on strength.

CNF-Natural Rubber Composite

Cellulose Mats and Cellulose Polymer Pellets

By compounding natural rubber with CNF, we successfully achieved both reinforcement effect (hardness) and stretch, and we discovered potential for anovel rubber material by replacing carbon black, the existing petroleum-derived
reinforcing material, with biomass. We will proceed with the development andpractical application of this material in anticipation of its future adoption for tire
applications, which are expected to yield high CNF consumption.

Making cellulose (pulp) into reinforcing fiber will help reduce the consumption of petroleum-derived plastic by up to 70%. A property of thisproduct is that molded forms show more rigid and less breakable thanconventional plastics. We will continue with product development toward practical applications for automotive components.

NaturalrubberConventional
fillers

Plant-derived
bio materials

CNF
Cellulose
nanofiber

Future Initiatives

Problems such as balancing hardness
with ductility and resilience

Cellulose(pulp)

Solve issues ofexisting fillers
Hard yet ductile
Returns to its original shapeafter being deformed
for a long time

Cellulose polymer pellets

Polymer

Future Initiatives
2024

Biomass
plastics

Bench plant
construction

Biofuels

Pilot plant
1,000 kl/year
construction

0.5 t/year

2027

Pilot plant
1,000 t/year
construction

2030

Planning of fullproduction
facilities

2033

2023

Commence
construction of full 20,000 t/year
production facilities

2030

Sales target

Sales target
CNF-Natural
rubbercomposite

Adoption for small
components

Expansion of applicable
components

Adoption for tire
applications

Cellulose mats
Polymer pellets

Sale for daily goods

Sale for automotive
components

Expansion of supply
structure¥10.0 billion/year
Construction of fullproduction facilities

Start of fullproduction

100,000 kl/year

2030 target

37

Molded cellulose
composite productCellulose matsHeat treatment

Alternative raw material topetroleum-derived or otherbiomass raw materials(ink, rubber, advanced
function plastics,
food products,
pharmaceuticals, etc.)

Development for the Expansion of Market for CNF

Adjust ratio

Used in manufacture ofethanol and sugar solution
as biomass energy

Saccharification

Digestion

LigninAble to convert
wood into biomass
materials efficiently

Sugar solution

Unique functions of CNF

2.5–5.6 million t
2020

780,000 t

Polymerization

Wood

1.97million t

Lactic acid

Proprietary
technologies

CNF

2030

Cellulose(pulp)

Functions of Cellulose

Initiatives for Product Development — Green Innovation —*1 Production of plastics, rubber, fibers, fuels, and other products using smart cells (micro-organisms that raise
the productivity of beneficial substances), with biomass-derived sugars as raw materials*2 Sustainable aviation fuel: Fuel seen as the trump card in the decarbonization of the aviation industry*3 Demonstration Project for Comprehensive Development of Cellulose-based Ethanol Production System (April
2015–March 2018)

2030

Forecast demand for biofuels*

Fiber width: Approx. 3 nm (complete nanofibrillation)

5

Functions of CNF

To contribute to a decarbonized society in which petroleum-derived fuels
and plastics are replaced with those derived from biomass, we are pursuing the development of new materials derived from the wood which is obtained from sustainable forest management. Needs are expected to increase for sugar solution, which is a key raw material of various
biomanufacturing*1 and for biomass plastics, such as polylactic acid, andethanol, which can be used in the manufacture of basic chemicals, SAF*2, a
focus of the aviation industry’s attention, both of which are obtained by
combining sugar solution with fermentation.
We refined our manufacturing technology for wood-derived ethanol after
it was adopted as a NEDO project*3 until 2018. For wood-derived sugar
solution as well, we have succeeded in the development of proprietary
technologies, including saccharification enzyme recovery, and are now undertaking sample work, which is being evaluated.

Fiber width: Approx. 30 μm (pulp)

Sudden Expansion of Demand for Biomass Plastics and Biofuels in JapanThe Oji Group Integrated Report 2023

¥6.0 billion/year¥3.5 billion/year
2030 target

The Oji Group Integrated Report 2023

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Initiatives for Product Development— Green Innovation —New Value Creation through Green Innovation

Medical and Healthcare

Eco-Friendly Products

Using Technologies Cultivated over 150 Years to Solve Various Environmental Issues

As the super-aging society progresses and interest in extending healthy life expectancy grows, there is aneed for new and different form of medicine and healthcare. The Oji Group is taking on the challenge of new
domains through our efforts to utilize wood resources in the medical and healthcare field.

Toward solving environmental issues, such as reduction of CO2 emissions and plastic consumption, we develop eco-friendly products that meet a wide range of needs by making full use of our abundant fundamental
and core technologies cultivated over the years.

Drug Discovery from Wood Resources

Recycling-friendly Paper Products

Wood-derived Pharmaceutical Products

Human Cardiomyocyte Tissue (Conceptual Drawing)

Direction ofcell orientation

Dye : -Actinin

Direction of cellorientation

Dotted regions
and planar regionsinterleaved on
substrate

CellArray-Heart
CellArray-Heart™

Cultivating cardiomyocytes on this product enables reproduction of cell orientation similar to that in vivo.

Stable Supply of High Quality, Domestically Grown
Raw Materials for Chinese Herbal Medicines
Large-scale Cultivation of Medicinal Plants
Medicinal plants are used in a wide range of applications, including pharmaceuticals (primarily Chinese herbal medicines), cosmetics, and food products, making them an indispensable plantresource in daily life. However, in many cases, supply is dependent on wild plants imported from overseas, resulting in risks
such as resource depletion, export restrictions, and foreign exchange fluctuations, as well as issues such as environmental
conservation and traceability. For these reasons, a shift to domestic production is needed.
Amid such needs, leveraging our forest tree breeding technology, we have successfully established cultivation techniques forlicorice, the most used medicinal plant, and we are now working
on large-scale cultivation.

The Oji Group Integrated Report 2023

Sulfated hemicellulose• Anti-inflammatory effect• Anti-coagulant effect

Under development for use
in pharmaceutical products• Arthritis drug for animal use• Anti-coagulant drugs

Nanostructure Technology for Regenerative
Medicine and Drug Discovery
Cell Culture Substrate for Controlled Cell Orientation, CellArray-Heart™
The issue was that the cellular functions of cardiomyocytes
generated from human iPS cells were not developing as far as
in vivo cells (they were not maturing). Focusing on the fact thatcardiomyocytes are “oriented” (facing the same direction) in vivo,
we have developed CellArray-Heart™.
This product is a cell culture substrate fabricated by our original technology that has nanodot regions with a pitch of several
hundred nm and planar regions interleaved in parallel stripes.
When culturing human iPS cardiomyocytes, we can reproduce
the same cell orientation as they have in vivo. Because it has
been confirmed that iPS cardiomyocytes that have been oriented when cultured progress to maturation, it is hoped that thismethod will help avoid animal testing in drug discovery and haveapplications in regenerative medicine.
We are currently proceeding with the collection of detailed
data for use in promotional activities with our joint research partner, Juntendo University.

Laminated Paper Using Plant-derived Polylactic Acid

Recyclable Aqueous Coated Cup Base

The incineration of ordinary laminated paper as combustible waste results in the emission of fossil fuel-derived
CO2. Since the plastic layers of the laminated paper wedeveloped use plant-derived polylactic acid, combustionof the paper does not increase CO2 in the atmosphere. In
addition, this paper is biodegradable under compost
conditions.

Traditional paper cups, made of plastic laminated paper,
are not suitable for recycling and are generally treated as
combustible waste. However, by leveraging our technology to apply special aqueous resin to the cup base in athin and even manner, we successfully developed a paper cup base that still has the functions required for paper cups, while being recyclable as paper material.
Initiatives for Product Development — Green Innovation —The Oji Group aims to contribute to human and animal healththrough the development of “sulfated hemicellulose.” Sulfatedhemicellulose is a compound obtained by “hemicellulose,” one of
the major components of wood. It has been confirmed to haveanti-inflammatory and anti-coagulant effects. In addition, thiscompound is similar to heparin, an animal-derived pharmaceutical product used all over the world. By replacing this animal-derived pharmaceutical product with a wood-derived one, it is expected to accommodate a wide range of needs.
We are currently filing a prior application for an arthritis drug
for animal use, and we have obtained approval for the manufacture and sale of veterinary drugs. Going forward, we will develop it into a drug for human use and work on the building of
the pharmaceutical business, leveraging the compound’s property of being derived from wood.

39

Challenge to a New Field in Light of the Future of Medicine and Healthcare

Biodegradable Plastic-Cellulose Composites to Reduce Environmental Burdens
Cellulose Composite, Resoil-GreenWe have developed resin materials that are composites of biodegradable plastics and wood-derived cellulose (pulp). The useof pulp means that this product can achieve a high degree ofbiomass as well as a high biodegradation rate. In addition, theproduct improves various properties of resin such as strengthand stiffness. Since all raw materials of the products are biodegradable in soil, compared with regular plastics, the products
can contribute to reducing environmental burdens.

Emission Reductions of CO2 from Fossil Fuels by
the Development of Biomass Plastic Films

Contribution to Energy Conservation throughDevelopment of Heat Shielding Film

Biomass plastic film, Alphan G

Anti-heat Windshield Film

We have developed a polypropylene film containing polylactic
acid, which as the plant-based plastic has a low environmental
impact to reduce CO2 emissions from fossil fuels. This product,
Alphan G, was certified as a Biomass mark product* and has
been commercialized.
We are also working on the development of heat-sealing films
and will continue to develop a wide variety of products that
contribute to SDGs.

To mitigate soaring utilities costs and reduce the environmental
burden of increased use of electric power, heat shielding materials that can be adhered to windows in automobiles and buildings are attracting attention. Our heat shielding film offers both
high heat shielding performance and transparency, and in December 2022, we added a new product that uses recycled materials for release films to our line-up. It is currently available asfilm for automotive windshields, and we are considering expanding its application to building windows.

* Biomass mark certified by the Japan Organics Recycling Association

Example of use:
The Grand Hotel
New Oji guest
room

The Oji Group Integrated Report 2023

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Initiatives for Product Development— Green Innovation —New Value Creation through Green Innovation

Business Promotion for Eco-Friendly Paper Packaging

Initiatives for New Business Development

Oji Group is promoting the development and commercialization of a variety of paper packaging products and the establishment of
new business models as an activity toward solving environmental issues, such as reduction of CO2 emissions and plastic consumption.

We will create business models and businesses
that will open up a circular future.
General Manager,
Corporate Business Development Division

Commercialization of Eco-Friendly Paper Packaging to Meet a Wide Variety of Needs

Teruyuki Mori

FlatSkin®: Cardboard That Enables Prolonged Shelf
Life and Attractive Presentation of Fresh Foods

As part of our structural reforms towards achieving the "long-term vision" goals, we established the Corporate Business Development
Division in October 2022 with the aim of developing businesses that will contribute to building of a sustainable society and growing
those businesses into future earnings pillars.
We will aim to expand our business by establishing the comprehensive management and promotion system for new business, suchas the liquid packaging carton business, one of our environmental response businesses, the effective utilization of company owned forests (P32: Oji Forest Value-Creation & Promotion Depertment), and eco-friendly paper products that will contribute to de-plasticization.

This is a package comprising cardboard and film that can beseparated for disposal. The vacuum packaging of meat and fish
suppresses drips, andprinting on the cardboard
offers attractive presentation of foods.

Liquid Packaging Carton Business

Acquisition of IPI (Italy) for the Expansion of Business into Overseas Markets
As part of our overseas strategy for the liquid packaging cartonbusiness, we acquired IPI S.r.l. (Italy), a manufacturer and distributor of converted paper and filling machines for aseptic
packaging cartons, in May 2023. This acquisition aims to enter
the aseptic carton market, which is the largest segment in the
global liquid paper carton industry.
This will enable integrated production of base paper and converted paper similar to our chilled cartons, allowing the Oji Groupto make a full-scale entry into the Asia and Oceania markets,
where the Oji Group has particular strengths. In addition, by leveraging IPI's sales network in newly emerging countries like Africa and other regions, the Oji Group anticipates the entry andexpansion of other businesses.

Flanged Paper Tray: Microwave-safe Packaging

This is a packaging that can be top-sealed and that has aflanged structure for ease of carrying and four-cornered adhesion construction that provides superior container
strength.
These containers aremicrowave-safe and canalso be used as tableware.

Chilled cartons

This is composed of three pieces;
paperboard top, tray, and divider.
Even without using plastic films, it isable to secure and protect the products inside. Because the package
can be printed on and window holes
can be made, this product offers
more effective presentation of thecontents such as daily goods.
Tapered Paper Tray: Food Tray with Separable
Cardboard and Film

This is a paperboard-based tray with a resin film that covers thesurface. It is designed sothat the cardboard andfilm can be easily peeled
away, making it easy toseparate for disposal afteruse. Because the flange isflat, there is no concern
about the contents leaking
after top-sealing.

Building of New Recycling System
Recycling System for Paper Cups

Conventional paper cups, made of plastic laminated paper, are not suitable for the existing
recycling systems, so are generally treated as combustible waste. Leveraging our recycling
technologies that we have cultivated over many years, Oji Group has built a system thatenables recycling of paper cups by incorporating paper cup crushing technology andwashing technology. The collected paper cups are reborn into other familiar paper products (corrugated containers, tissues, etc.)
We will also make an effort in the recycling of the paper cups used by our customers.
Aseptic packaging cartons* Cartons are sterilized in filling machine that keep contents for six months to ayear at room temperature.

Sales ofrecycled
products

Sorting
paper cups

Initiatives for Product Development — Green Innovation —In September 2020, the Oji Group established Ishizuka-Oji Paper
Packaging Co., Ltd. in a joint venture with ISHIZUKA GLASSCo., Ltd. and entered the liquid packaging carton business.
For chilled cartons for refrigerated storage, such as milk andjuice, we have already achieved an integrated structure in Japan covering the entire process from manufacturing base paper to converting and sales. In the Liquid Packaging Carton
Depertment that launched in October 2 0 2 2, we are actively
working to enhance a structure and promote sales activities todrive forward and expand the business

Paper-made Blister Pack: a Packaging That Offers
Effective Presentation of Contents

New
Recycling System

Recycling of
paper cups into
new productsCollection,
crushing,
and washing

IPI’s Sales Area (2022)

TopicsReduction of CO2 Emissions by Introduction of Paper Packaging

The calculation*1 and comparison of the life-cycle CO2 emissions of petroleum-based plastic packaging and sustainable paper packaging shows that
paper packaging emits less CO2 than plastic packaging*2. Therefore, the introduction of paper packaging can contribute to CO2 emission reduction. For
more details, please see our website.
Other

Central America
8.8%
Middle East
12.8%

Europe16.5%

41

The Oji Group Integrated Report 2023

Plastic packaging

Paper packaging

Disposal(Combustion)60%
reduction

Converting

8.4%
Net Sales
Composition
Ratio byCountry

Africa53.5%*1 CO2 emissions are calculated by converting greenhouse gas (GHG) emissions such as carbon dioxide (CO2),methane (CH4), and dinitrogen monoxide (N2O) into CO2. The calculation is made based on LCA (Life Cycle
Assessment) methodology.
*2 Calculation results of reduction rate will vary, depending on packaging material and layer structure. (It is assumed that the paper packaging material is MG bleached kraft paper 70 g/m2 and that the method of printing
is gravure printing.)

Obtaining raw
materials &manufacturing
materials

Sustainable packaging CO2 reduction effecthttps://solution.ojiholdings.co.jp/ojipaperpackage/sustainability/ (available in Japanese only)

OPP 20μ/Print/
Lamination/
Vapor deposition/
CPP 25μDisposal (Combustion)

Converting
Obtaining raw
materials &manufacturing
materials

Packaging material layer structure
Printing/
MG bleached kraft paper
70 g/m2/Heat-sealing layer(simultaneous printing)

The Oji Group Integrated Report 2023

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