Oji Group Integrated Report 2021

Issued in December 2021

Oji Holdings Corporation

Public Relations and Investor Relations Dept., Corporate Governance Div.
7-5, Ginza 4-chome, Chuo-ku, Tokyo 104-0061 Japan
https://www.ojiholdings.co.jp/english/

The Oji Group
Integrated Report 2021
Fiscal year ended March 2021

Management Philosophy & Corporate Slogan

Management Philosophy

Creation of
Innovative ValueContribution toHarmony with

the Future andNature andthe WorldSociety

Creation of Innovative Value
Innovation is essential for the Oji Group to make a big leap forward. Changes must take place in the research and technological development leading
up to revolutionary new products. At the same time, our organizational systems and the behaviors of each and every employee need to be transformed. We will promote “challenging manufacturing” based on novel ideas
and fulfill society’s latent needs.

Untiring self-transformation, challenging manufacturing,strategic business model creation, and innovation.
In a world that is constantly changing, the Oji Group aims
to create innovative value in the global arena.

Slogan“Beyond the Boundaries”
This slogan expresses the Oji Group’s commitment to actively go beyond the“boundaries” of business domains, countries, and the respective capabilities ofindividual employees to contribute to the future, society, and the world as wellas the determination of all Group members to maximize corporate value as atruly global company.

01

Oji Group Integrated Report 2021

Oji Group Integrated Report 2021

02

Harmony with Nature and Society
Sustainable resource circulation based on forest resources is the foundationof the Oji Group. We will advance our initiatives such that the businessactivities themselves contribute to a sustainable society. The initiatives
include using vast areas of company-owned forest in and outside Japan for
multiple purposes and seeking measures to reduce the environmental
burden at manufacturing sites.

Contribution to the Future and the WorldThe Oji Group comprises a diverse range of businesses. We have growninto a global corporate group, with an overseas sales ratio of around 30%.
The Group will continue to provide innovative value to all countries, regions,and societies and create a new future through proactive global expansion
in Asian and other countries.

03

Oji Group Integrated Report 2021

Oji Group Integrated Report 2021

04

From the Publisher of this Integrated Report

CONTENTS

We started publishing the Oji Group Integrated Report in 2019. This report presents both financial and non-financial information in

About the Oji Group
07
09
11
13

an easy-to-understand manner in order to provide information about our initiatives to our customers, shareholders, investors, local
residents, and all other stakeholders. As with the previous report, this fiscal year’s report was compiled in such a way that provides
narratives and makes it easier to understand. We have also enhanced the links between this report and our “Sustainability Report(online).”In recent years, concern has been growing over global environmental issues such as climate change and the issue of plastic in
the ocean, and the drive to solve these problems is gathering momentum. With the additional impacts of the COVID-19 pandemic,
the social environment surrounding us is facing a significant crossroads. Under these circumstances, the Oji Group, which has been
operating a sustainable paper manufacturing business since our foundation in 1873, has held numerous discussions as to what newvalues can be created and how we can meet social expectations, by obtaining internal and external cooperation.
We consider it the mission of the Oji Group to continue progress toward the realization of a sustainable society through our forest
resources-centered business, while deepening communication with stakeholders through this Integrated Report.

History of the Oji Group’s Value Creation
Business Overview
Major Affiliated Companies Distribution Map
Financial and Non-financial Highlights

What the Oji Group Aims For
15
23
25
27
29
31
35

Message from the President
Value Creation Process
Sustainable Business Model
Core Competencies and Material Issues
Risks and Opportunities
Medium-term Management Plan
Special Feature (1):Action on Climate Change—Toward theRealization of a Low-carbon Society
Special Feature (2):Sustainable Forest Resources
Special Feature (3):Promotion of Innovation

39
41

Business Strategy

Editorial Policies

Reporting Period

When preparing this Report, and reference was made to thefollowing. Additionally, the report is structured in relation to
the 10 principles in four areas found in the United Nations
Global Compact.

The reporting period is from April 1, 2020 to March 31, 2021 (ex-● International Integrated Reporting Framework● GRI Standard (Global Reporting Initiative)

certain overseas sites, for which the period is from January 1, 2020
however, activities carried out from and after April 2021 are also❸❷

Forecasts and other forward-looking statements in this report represent projections by Oji Holdings based on information available atEnsuring Reliability

the time of publication and reasonable judgments and therefore
contain uncertainties. Actual results may differ substantially due tovarious factors.

This Report is Printed on Forest Certified Paper
The report’s cover is printed on Oji F-Tex’s OK Muse Gulliver Gloss

Scope of Coverage of this Report

CoC (157.0 g/m2), while the main body of the report is printed on

In general, this report covers Oji Holdings, 188 consolidated sub-Oji Paper’s OK Pixeed 01 EF (80.0 g/m ). Both of these are FSC™

sidiaries, and 23 equity-method affiliates (as of March 31, 2021). In

forest certified paper made from resources harvested from respon-cases where coverage differs, this is indicated.

sibly-managed forests (FSC™C005431, FSC™014119).

2

Public Relations and Investor Relations Dept., Corporate Governance Div.
7-5, Ginza 4-chome, Chuo-ku, Tokyo 104-0061 Japan
https://www.ojiholdings.co.jp/english/
Issued in December 2021

005_0084087912112.indd

4,6❾

Photos on the Cover

The Oji Group
Integrated Report 2021
Fiscal year ended March 2021❹❺❶
Oji Holdings Corporation

To ensure the reliability of this report, FY2020 figures marked
with a star (★) have been assured in accordance with the International Standard for Assurance Engagements (ISAE) 3000
and ISAE 3410 by KPMG AZSA Sustainability Co., Ltd.

❻❽❼
2021/12/01

15:35:43(1) Waihora mountain forest (New Zealand)(2), (6) Furen mountain forest (Hokkaido)(3) A fairy pitta(4) Biei mountain forest (Hokkaido)(5) Utanobori mountain forest (Hokkaido)(7) Samani mountain forest (Hokkaido)(8) Tomakomai mountain forest (Hokkaido)(9) Shumarinai mountain forest (Hokkaido)

65
67
69
73
75
77
78

Corporate Officers (Oji Holdings Corporation)
Message from the Chairman
Corporate GovernanceCompliance
Risk Management
BCP and Measures against COVID-19
Independent Outside Directors’ Roundtable
Discussion

Sustainability Strategy
81
83
85

Material Issues (ESG) and KPI
Environment: Response to TCFD
Environment: Mitigation and Adaptation to
Climate Change
87 Environment: Sustainable Forest Management(Forest Recycling)
89 Environment: Conservation of Biodiversity
90 Environment: Responsible Raw Materials
Procurement
92 Environment: Reduction of Environmental
Burdens
94 Environment: Effective Resource Utilization(Water Recycling)
95 Environment: Effective Resource Utilization(Paper Recycling)
97 Environment: Stable Supply of Safe andSecure Products
98 Society: Ensuring Workplace Safety and
Health101 Society: Respect for Human Rights
102 Society: Human Resource Measures
106 Society: Contribution to Local Communities
and Society

Financial Data / Corporate Data

107 Message from the Director in Charge of Finance
109 Financial Data Highlights
111 Consolidated Financial Statements
114 Third-Party Independent Assurance Report
115 List of Affiliated Companies
117 Corporate Data / Stock Information
118 A Year at the Oji Group

Evaluation from Society
FTSE Blossom Japan Index
Oji has been selected for the FTSE Blossom Japan Index, one of the ESG indexes selected by the Government
Pension Investment Fund (GPIF), since September 2019. (Scope: Oji Holdings)
FTSE4Good Index Series
Oji has been selected for the FTSE4Good Index Series, an ESG index established by FTSE Russell, since September 2019. (Scope: Oji Holdings)
SOMPO Sustainability Index
Oji has been selected since June 2019 for the SOMPO Sustainability Index, which is used for SOMPO Sustainable
Investment, an investment product of SOMPO Asset Management Co., Ltd. (Scope: Oji Holdings)

Communication Map

S&P/JPX Carbon Efficient Index
Oji has been selected for S&P/JPX Carbon Efficient Index since September 2018. Constituents of the index areselected with a focus on companies’ disclosure of environmental information and carbon emissions per net sales.
(Scope: Oji Holdings)

Integration with Strategy(Narrative)

Dow Jones Sustainability Asia Pacific Index
In November 2020, Oji was selected for the first time as a constituent of the Dow Jones Sustainability Asia PacificIndex, one of the Dow Jones Sustainability Indices (DJSI) selecting companies based on their outstanding performance on sustainability issues. (Scope: Oji Holdings)

Integrated Reporthttps://investor.ojiholdings.co.jp/en/ir/library/integrated.html
Financial
Sustainability Report (online)
https://ojiholdings.disclosure.site/en/• Corporate Governance• Risk Management• Compliance• Mitigation and Adaptation to
Climate Changes• Reduction of Environmental
Burden• Effective Resource Utilization

Investor Relations
https://investor.ojiholdings.co.jp/en/ir.html• Responsible Raw Materials
Procurement• Respect for Human Rights• Human Resource Measures• Occupational Safety and
Health
• Biodiversity Conservation• Contribution to Local Communities and Society• Financial Results• IR Library• Stock Information• Information for Individual Investors

Details(Comprehensive)

Oji Group Integrated Report 2021

63

Oji Group Integrated Report 2021

(Ministry of Economy, Trade and Industry)

05

61

to December 31, 2020). With the exception of numerical data,

Disclaimer Regarding Forecasts and Other
Forward-looking Statements● Guidance for Collaborative Value Creation

Household and Industrial Materials
Businesses
Functional Materials Business
Forest Resources and Environment
Marketing Business
Printing and Communications MediaBusiness
Corporate Management Group andShared Service Companies

53
57

cept for lost time injury frequency rate, and environmental data forreferenced.

(International Integrated Reporting Council)

Nonfinancial

47

Management Strategy• IR Schedule• IR News Releases• Stock Chart

MSCI Japan Empowering Women (WIN) Index
Oji has been selected since June 2017 for MSCI Japan Empowering Women (WIN) Index, an ESG index established by MSCI Inc. (Scope: Oji Holdings)“Eruboshi” certification received under the Act on Promotion of Women’s Participation and Advancement in the Worksite
On December 21, 2017, Oji was granted “Eruboshi” (Grade 3, the top grade) company certification by the Ministerof Health, Labour and Welfare in recognition of its efforts to promote women’s participation and career advancement. (Scope: Oji Holdings)
FY2020 “Nadeshiko Brand”
On March 22, 2021, Oji was selected for a second time (first selection in 2018) by the Ministry of Economy, Tradeand Industry and the Tokyo Stock Exchange as “Nadeshiko Brand” companies as enterprises that are outstanding interms of encouraging the empowerment of women in the worksite. (Scope: Oji Holdings and Oji Management Office)
JPX Nikkei Index 400
Oji has been selected for JPX Nikkei Index 400 since August 2014. The stock price index comprises stocks thatmeet the requirements of global investment standards and are attractive to investors. (Scope: Oji Holdings)
2021 Certified Health and Productivity Management Organization Recognition Program
On March 4, 2021, Oji was recognized under the 2021 Certified Health and Productivity Management Organization
Recognition Program (Large Enterprise Category), administered jointly by the Ministry of Economy, Trade, and Industry (METI) and the Nippon Kenko Kaigi. (Scope: Oji Holdings and Oji Management Office)Oji Group Integrated Report 2021

06

History of the Oji Group’s Value Creation

Demand for paperboard as a packaging material was strong.
The production ratio of paper and paperboard graduallychanged.

We have newly established corrugated container andfolding carton factories in Malaysia, Cambodia and India,
among other countries, to meet vigorous local demand.

Net sales (¥billion)

Output (million tons)
10

1,500
1,400
1,300

Business Strategy

1,600Light-weighted newsprint became common,and in the household paper field, we succeededin volume reduction of tissue paper cartons. In
addition, due to advances in recovered paper
utilization technology, the recovered paper
utilization ratio exceeded 50%.

What the Oji Group Aims For

Attention was drawn to issues that are
directly related to people’s lives,
such as resource saving, energy saving,
and urban waste treatment.

8
Management Strategy

Start of Packaging and Household
Paper Production

Demand for paper was only growing,
and people started to have high expectations
for the material, which found its way
into products other than newsprint andprinting paper.

With a view to producing high-quality paper
quickly and in large quantities, we turned toa continuous digester, which was unproven at thattime but highly productive. We introduced
the equipment at the Kasugai Mill.

Establishment of Domestic
Supply Structure

1910
We established the Tomakomai Mill in a fishingvillage in Hokkaido, which had abundantresources such as forests and water as well as vastand flat land, which are required for paper
manufacturing, and started producing newsprint.

The origin of the Oji Group dates back to
the establishment of Shoshi Kaisya,a paper manufacturing company, advocatedby Eiichi Shibusawa, the founder ofthe modern Japanese economy.

Birth of the Modern Paper
Manufacturing Industry

1873

1970s

Efforts toward New
Technologies

1950s

Response toEnvironmental Issues

1990s

About the Oji Groupour domestic business to the global market.

2010s
We actively developed
the overseas business witha focus on Southeast Asia.
The overseas sales ratio
reached approximately
30%.

Paper production volume
has been declining
since 2008.
This unprecedented crisis
created an opportunity for
shifts in the businessstructure.

years, aiming for contribution to a sustainable society, we have been actively rolling out the technologies cultivated in

Shift in the Business
Structure

2000s

abreast of the trends of the times, we have tackled changing social needs and evolved our business structure.In recent

Further Global
Deployment

Since its founding in 1873, the Oji Group has been growing through the expansion of business fields.While keeping

1,200
1,100

Net sales

6

Pulp output (overseas)<Global Pandemic of COVID-19>

4

Oji Fibre Solutions acquired (New Zealand and Australia)
People & Grit acquired (Malaysia)<Global Financial Crisis>

Jiangsu Oji Paper established (China)

Oji F-Tex foundedMorishigyo Group acquired

Oji Materia and Oji Container founded<Kyoto Protocol>

Oji Paper (merges with Honshu Paper)

Full-scale overseas forest plantation business starts
New Oji Paper (merges with Kanzaki Paper Manufacturing)<Fall of the Berlin Wall>

Disposable diaper production starts<First Flight of a Space Shuttle>

Paper output (domestic)

Merges with Nippon Pulp Industries

High-grade boxboard production starts (former Nippon Pulp Industries)
Thermal paper production starts (former Kanzaki Paper Manufacturing)<1973 Oil Crisis>

Production of non-woven fabric starts (Oji Kinocloth)
Production of household paper (tissue paper and toilet rolls) starts<Tokyo Olympics>

Production of coated paper and kraft paper starts

Corrugated container production starts (former Honshu Paper)
Trade name changes to Oji Paper

Develops DIP from old newspaper

KP continuous digester starts operation (Kasugai Mill)
Woodfree paper production starts<Outbreak of the Korean War>

Splits into three companies (Tomakomai Paper, Honshu Paper, and Jujo Paper)<End of the World War II>

Merges with Fuji Paper and Karafuto Industries An era of Great Oji

Oji Paper Tomakomai Mill opens

Established Shoshi Kaisha

Oji Group Integrated Report 2021

We worked on unimaginably difficult
construction such as building a latesthydroelectric power plant at Waterfall Nassou
on the undeveloped shore of Lake Shikotsu.

Paperboard output (domestic)

Paper materials such as boxboard,thermal paper, and household paper
have come to play an active role invarious situations that support daily life.

2

Financial Data & Corporate Data

07

Tomakomai Mill for newsprint andKasugai Mill for woodfree paper
contributed to our growth. Kasugai Milleven became a pioneer of urban factories.

Sustainability Strategy

Shibusawa advocated that “paper andprinting businesses are the source of
civilization.” He held on to his great
ambition to supply domestic paper.

Paper output (overseas)

GSPP Group acquired (Malaysia)
Oji Papéis Especiais acquired (Brazil)
Transitioned to a pure holding company structure Celulose Nipo-Brasileira acquired (Brazil)

Paperboard output (overseas)
From thecollectionof theShibusawa
Memorial
Museum0

Oji Group Integrated Report 2021

08

Business Overview

Net Sales¥1,359.0

Operating Profit

billion¥84.8

Changes in Net Sales
and Operating Profit

billion

1,551.0

1,485.9

1,507.6
110.2■ Net Sales (¥ billion)■ Operating Profit (¥ billion)

About the Oji GroupOji Holdings Corporation
1,450.0

1,359.0

120.0

106.1

84.8

70.8

†Net sales and operating profit include adjustments (primarily thosefor internal transactions).

Industrial Materials COMPANY

Household and Consumer
Products COMPANY➡︎ P47

2018

2020

2019

2021 (plan) (FY)Functional Materials COMPANY

Forest Resources and Environment
Marketing COMPANY

Printing and Communications
Media COMPANY

Corporate Management Groupand Shared Service Companies➡︎ P53➡︎ P57➡︎ P61➡︎ P63➡︎ P51

What the Oji Group Aims For

2017

Business Strategy

Main businesses

Main businesses

Main businesses

Main businesses

Main businesses

Household paper, Disposable diapers

Specialty paper, Thermal paper, Adhesive products, Film

Pulp, Energy, Plantation services, Lumber processing

Newsprint, Printing and Publication paper, Communications paper

Real estate, Engineering, Trading, Logistics, etc.

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Domestic

Overseas

Domestic

Overseas

Domestic

Domestic

Overseas

Domestic

Overseas

Domestic

Overseas

43 companies 44 companies 1 company 8 companies

9 companies 12 companies

15 companies 15 companies

7 companies 1 company

17 companies 16 companies

Earning structure

Earning structure

Earning structure

Earning structure

Earning structure

Net Sales
Composition
Ratio

11.5

%

Net Sales¥647.5

Operating Profit

Oji Group Integrated Report 2021

¥38.1

Net Salesbillion¥182.3Operating Profit

billion

¥11.5

15.4

%
Net Salesbillion¥245.3Operating Profit

billion

15.3

%

¥16.7

Net Salesbillion¥244.0Operating Profit

billion

17.0

%

¥11.2

Net Salesbillion¥270.2billion¥6.8

billionOperating Profit

billion%Oji Group Integrated Report 2021

Financial Data & Corporate Data

40.8

Net Sales
Composition
Ratio

Net Sales
Composition
Ratio

Net Sales
Composition
Ratio

Sustainability Strategy

Net Sales
Composition
Ratio

09

Overseas

Management Strategy

Main businesses

Containerboard/corrugated containers, Boxboard/folding cartons, Packaging materials/paper bags

10

Major Affiliated Companies Distribution Map

Europe (Number of manufacturing sites: 1)

Group companies in East Asia (Number of manufacturing sites: 11)

Kanzan Spezialpapiere GmbH

China (Number of manufacturing sites: 9)

Decorative paper

Sunshine Oji (Shouguang) Specialty Paper Co., Ltd.

Oji Paper Management (Shanghai) Co., Ltd.

Sales

Oji Paper International Trading (Shanghai) Co., Ltd.

Heavy-duty
packaging materials

Suzhou Oji Packaging Co., Ltd.

Household paper (base paper,
paper products), disposable diapers

Corrugated containers

Dalian Mori Mitsui Packaging Co,. Ltd.

Pulp

Cheng Yuang Paper Business Co,. Ltd.

Coated paper,
wood-free paper

Regional headquarters

Heavy-duty
packaging materials

Oji Packaging (Shanghai) Co., Ltd.

Filters

Kunshan Oji Filter Co., Ltd.

Filters

Nantong Oji Filter Co., Ltd.

Cut and processed
products of dry pulp
non-woven fabric,
thermal paper, andspecialty paper

Oji Kinocloth (Shanghai) Co., Ltd.

Korea (Number of manufacturing sites: 2)
Heavy-duty
packaging materials

Oji Interpack Korea Ltd.

COMPANY management Oji Functional Materials Progressing Center Inc.

COMPANY management Oji Green Resources Co., Ltd.

Containerboard,
boxboard,
packaging paper

Specialty paper, films

Oji F-Tex Co., Ltd.

Woodchips, lumber
business etc.

Oji Forest & Products Co., Ltd.

Corrugated containers

Oji Materia Co., Ltd.

Thermal paper

Oji Imaging Media Co., Ltd.

EnergyOji Green Energy Shiranuka Co., Ltd.

Oji Container Co., Ltd.

Adhesive products

Oji Tac Co., Ltd.

EnergyOji Green Energy Ebetsu Co., Ltd.

New Tac Kasei Co., Ltd.

EnergyOji Green Energy Nichinan Co., Ltd.

Oji Kinocloth Co., Ltd.

EnergyMPM Oji Eco-Energy Co., Ltd.

Chuetsu Co., Ltd.

Newsprint, printing andpublication paper,communications paper

Oji Paper Co., Ltd.

Morishigo Co., Ltd.

Adhesive products,
medicalFolding cartonsOji Packaging Co., Ltd.

Non-woven fabricPaper bags

Oji Seitai Co., Ltd.

Household papers,
disposable diapers

Oji Nepia Co., Ltd.

Printing, processing,packaging materials

What the Oji Group Aims For

Paper bags

Jiangsu Oji Paper Co., Ltd.

COMPANY management Oji Industrial Materials Management Co., Ltd.

About the Oji Group

Germany (Number of manufacturing sites: 1)
Thermal paper,
inkjet paper

Manufacturing sites in Japan (Number of manufacturing sites: 104)

Business Strategy
Management Strategy

Malaysia (Number of manufacturing sites: 16)
Regional headquarters

Oji Asia Packaging Sdn. Bhd.

Regional headquarters

Oji Asia Management Sdn. Bhd.

Containerboard,
corrugated containers

GSPP Group

Vietnam (Number of manufacturing sites: 10)
Ojitex (Vietnam) Co., Ltd.

Corrugatedcontainers, paper cups

Myanmar (Number of manufacturing sites: 2)

Ojitex Haiphong Co., Ltd.

Forest plantation

Corrugated containers

Oji GS Packaging (Yangon) Co., Ltd.

Paper bags

Japan Paper Technology Dong Nai (VN) Co., Ltd.

Forest plantation

Flexible packaging
materials

Oji Myanmar Packaging Co., Ltd.

Paper bags

Japan Paper Technology (VN) Co., Ltd.

Woodchips

Folding cartons

United Packaging Co., Ltd.

New Zealand (Number of manufacturing sites: 10)

Harta Packaging Group

Disposable diapers

People & Grit (M) Sdn. Bhd.

Corrugated containers

Oji India Packaging Pvt. Ltd.

Forest plantation

Quy Nhon Plantation Forest Co. of Vietnam Ltd.

Disposable diapers

Oji Asia Household Product Sdn. Bhd.

Heavy-duty
packaging materials

Oji Interpack India Pvt. Ltd.

Woodchips

BINH DINH CHIP CORPORATION

Label printing &converting

Hyper-Region Labels Sdn. Bhd.

Sales

Oji Forest Products Vietnam Co., Ltd.

India (Number of manufacturing sites: 4)Sales

Oji Interpack Singapore Pte. Ltd.

Oji Group Integrated Report 2021

Thailand (Number of manufacturing sites: 5)
Corrugated containers,
folding cartons
Heavy-duty
corrugated containers
Carbonless paper,
thermal paper

Union and Oji Interpack Co., Ltd.

Corrugatedcontainers

PT Oji Sinar Mas Packaging

Oji Paper (Thailand) Ltd.

Disposable diapers

PT Oji Indo Makmur Perkasa

Adhesive paper,
release paper

Oji Label (Thailand) Ltd.

Indonesia (Number of manufacturing sites: 3)

S.Pack & Print Public Co., Ltd.

SalesPT Indo Oji Sukses Pratama

Forest plantation,
woodchips,
woodpellets

PT Korintiga Hutani

Containerboard,
corrugated containers,
paper bags

Oji Fibre Solutions
Green Triangle Plantation Forest Co. ofAustralia Pty. Ltd.
Albany Plantation Forest Co. ofAustralia Pty. Ltd.

South America (Number of manufacturing sites: 2)

North America (Number of manufacturing sites: 1)

Brazil (Number of manufacturing sites: 2)

America (Number of manufacturing sites: 1)

Thermal paper,carbonless paper

Oji Papéis Especiais Ltda.

Forest plantation, pulp

Celulose Nipo-Brasileira S.A.

Thermal paper,
film, inkjet paper

Kanzaki Specialty Papers Inc.

Albany Plantation Export Co., Pty. Ltd.

Oji Fibre Solutions

Forest plantation, pulp
Forest plantation, pulp,
lumber business

Pan Pac Forest Products Ltd.

Lumber business

Pan Pac Forest Products (Otago) Ltd.

Forest plantation

Southland Plantation Forest Co. of
New Zealand Ltd.

■ Industrial Materials Business■ Household and Consumer Products Business■ Functional Materials Business■ Forest Resources and Environment Marketing Business■ Printing and Communications Media Business■ Other Businesses (COMPANY management, Regional headquarters, Sales)① Listed only for major affiliated companies (As of March 31, 2021)② Production bases do not include sales companies and forest plantation sites.

Financial Data & Corporate Data

Harta Packaging Group

Singapore

Australia (Number of manufacturing sites: 6)

Corrugatedcontainers
Corrugatedcontainers

Corrugated containers

Containerboard,
corrugated containers,
plastic bags

Thermal paper & carbonlesspaper printing & converting Tele-Paper (M) Sdn. Bhd.

11

Cambodia (Number of manufacturing sites: 3)

Group companies in Oceania (Number of manufacturing sites: 16)

Sustainability Strategy

Group companies in Southeast Asia, India (Number of manufacturing sites: 43)

List of Affiliated Companies: pp. 115-116

Oji Group Integrated Report 2021

12

Financial and Non-financial Highlights

About the Oji Group

Financial Highlights
Segment

FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20201,212.9

1,241.5

1,332.5

1,347.3

1,433.6

1,439.9

1,485.9

1,551.0

1,507.6

1,359.0

(%)

9.7

10.6

16.7

20.3

22.8

27.8

28.2

31.0

32.0

29.9

29.3

Operating profit(¥billion)

65.4

53.8

43.5

57.3

43.9

72.0

70.2

70.8

110.2

106.1

84.8

Profit per share

(¥)

24.92

22.46

21.91

32.01

15.71

12.86

40.74

36.64

52.52

58.78

50.13

Free cash flows(¥billion)

25.7

38.3

29.2

42.1

(74.6)

84.8

117.2

49.2

74.0

59.7

35.5

Net D/E ratio(times)

1.7

1.6

1.4

1.1

1.0

1.0

0.8

0.7

0.7

0.6

0.6

Return on equity (ROE)

(%)

5.6

5.0

4.6

5.9

2.6

2.1

6.7

5.6

7.7

8.5

6.9

Capital investment, etc.

(¥billion)

77.1

54.7

70.1

76.7

80.1

57.4

57.9

69.3

62.1

97.5

98.4

(¥)

10.0

10.0

10.0

10.0

10.0

10.0

10.0

10.0

12.0

14.0

14.0

(¥billion)

Overseas sales ratio

Dividend per share

What the Oji Group Aims For

1,180.1

Net sales

Forest certification acquisition rate

GHG emissions*

0.80

7,086 thousand t-CO2e

706 million m3

Change from FY2019 ▲3 pt (overseas)

Change from FY2019 ▲248 thousand t-CO2e

Change from FY2019 ▲31 million m

100

100
89

92

100

94

■ GHG emissions (thousand t-CO2e)

100

91

0.485

7,611

0.482
7,679

—
● GHG emissions intensity (t-CO2e/production t)

0.476

0.473

0.495

7,605
7,334

Change from FY2019 ▲0.08 pt

3■ Water intake (million m3) —● Water intake intensity (m3/production t)

47.35

46.73

46.36

47.51

743

744

740

737

—
● Domestic —● Overseas —● Whole Group

1.25
1.07

706

7,086

1.56

49.35

0.61

2016

2017

2018

2020 (FY)2019

Energy consumption*

2016

2017

Change from FY2019 ▲441 thousand kL oile

0.365

2016

2017

5,789

5,822

2016

2017

2018

2.5

5,660

66

2019

2020 (FY)13

Oji Group Integrated Report 2021

2016—
● Percentage of female managers

3.5

3.6

82

85

3.1

94.2

2017

2018

2017

2018

93.6

2019

2016

2017

2018

2020 (Year)

Number of employees (excluding temporary employees)
Change from FY2019 ▲776 employees (overseas ▲367)■ Japan■ Overseas

35,392
18,34420192020 (FY)—● Percentage of overseas employees

36,14436,30919,062

19,16936,81019,82336,034
19,456

53.9

54.0

52.7

52.8

17,04817,082

17,14016,987

16,578

2016

2017

2018

2019

2020 (FY)

51.8

94.0

2020 (FY)2019*(1) Covered period: January 1 to December 31.
(2) LTIFR = (the number of lost time injuries ÷ total working hours) × 1,000,000
Lost time injuries (LTI) is defined as an occurrence that resulted in a fatality, permanent
disability or time lost from work of one day/shift or more.
(3) Total working hours are calculated based on the number of group company employees(regular employees and temporary/non-regular employees) as of the end of September
every year, assuming the annual working hours per person is 2,000 hours.

72

56
94.1

0.76

0.88

36,034

Change from FY2019 +0.1 pt■ Number of women in management positions

0.365

94.8

0.79

3.6%

Change from FY2019 +0.4 pt*Energy amount converted to crude oil value†Intensity for FY2020 includes the effects of production declines caused by COVID-19.

2020 (FY)

Percentage of female managers (16 Group companies in Japan)—● Effective waste utilization ratio (%)

5,219

2019

Effective waste utilization ratio*

2.9
5,874

2018

0.67

0.85
0.80
0.74

0.89

Financial Data & Corporate Data

0.3642020 (FY)94.0%■ Energy consumption (thousand kL oile)—● Energy consumption intensity (kL oile/production t)

0.369

2019

†Intensity for FY2020 includes the effects of production declines caused by COVID-19.

5,219 thousand kL oile

0.369

2018

*GHG (Greenhouse Gas) associated with product manufacturing†Intensity for FY2020 includes the effects of production declines caused by COVID-19.

1.08

1.01

Sustainability Strategy

2016

1.02

Management Strategy

84

Lost Time Injury Frequency Rate (LTIFR)*

Japan 100%, Overseas 91%■ Company-owned forests in Japan (SGEC (%))■ Overseas forest plantations (FSCTM, etc. (%)) FSCTMC016623, etc

100

Water intake

Business Strategy

Non-financial Highlights*Effective waste utilization ratio = (Amount of waste generated − Amount of landfill
waste) ÷ Amount of waste generated × 100

Oji Group Integrated Report 2021

14

Message from the President

About the Oji GroupTo Create Sustainable
Value for the Future by
Responding to Change

What the Oji Group Aims For

Today, we find ourselves in a situation where each and every decision will greatly change the future. As
the global spread of COVID-19 has been reshaping people’s lifestyles, the demand structure is drastically changing. It should also be noted that the climate change issues have drawn more attention and thetrend towards resolving the issues is gaining momentum. I would like to discuss the path that the Oji
Group should take to create sustainable value that the society demands and to achieve growth in response to changes at present as well as new changes that will emerge in the future.

Impact on the Oji Group and Transition intoa New Normal

Oji Group Integrated Report 2021

Financial Data & Corporate Data

15

economic stimulus, such as the “Go To Travel” tourism
campaign and “Go To Eat” dining campaign, these weresuspended as the spread of infection continued, leading
to persistently challenging condition today. Particularly, for
the Paper Business, demand had been shrinking prior to
the pandemic with the popularization of smartphones andchanges in information collection methods, and thisshrinkage has been further accelerated due to weakerconsumption as well as diversified workstyles such as
working from home as a result of the pandemic. While thePaper Business continues to struggle, other businesses
are seeing a gradual recovery since the latter half of 2020,
including the Paperboard Business, which centers on corrugated container products, due to expanded demand
from those staying at home, and the Specialty Paper Business, which centers on industrial products, driven by therecovery in the automotive industry. Looking overseas, inSoutheast Asia and New Zealand, uncertainties increased
due to such factors as lower factory utilization ratio anddelays in strategic investment timelines caused by lockdowns. The situation has required us to be more cautious
in assessing the business evironment.
The COVID-19 pandemic has drastically changed ourawareness and lifestyles. While it is needless to say that wewill respond to this change, even when the pandemic
comes to an end, things will not return to the way they were
before the pandemic, nor will our current lifestyles in the
middle of the COVID-19 pandemic remain the same. It is
critical that we determine what the new post-pandemic

Sustainability Strategy

First, in terms of change, I would like to examine changes
in the business environment during the COVID-19 pandemic, which I believe is of particular interest to everyone.
The economic impacts are severe both in Japan andoverseas. I understand that it was inevitable to some extent to reduce the movement of people as the only reliablemeasure to protect their lives, but countries around theworld implemented such policies as lockdowns, self-quarantine and travel restrictions. The policies were further
strengthened by individuals’ conscious efforts to stay athome. I believe it is still fresh in your memory that the nationwide state of emergency declared in April 2020 left thestreets quiet and dark in Japan. Consequently, with themarkets and economic activities coming to a standstill,
the Oji Group’s business was impacted profoundly. In Japan, with the exception of a temporary rise in demand ofhousehold paper products due to panic buying in the firsthalf of 2020, the sales volumes of other businesses weresignificantly lower than the previous year, which forced us
to adjust production. Although there was a momentary
recovery in the latter half of 2020 due to the government’s

Masatoshi Kaku

Management Strategy

I. Overview of the Changes Resulting
from COVID-19

Business Strategy

Oji Holdings Corporation
Representative Director of the Board, President and Group CEO

Oji Group Integrated Report 2021

16

Message from the President

Our “Founding Spirit” and “Management
Philosophy”—a Constant Direction That
Transcends Environmental Changes

Oji Group Integrated Report 2021

(Expansion and enhancement of overseas businesses)● Expand organically from existingbases● Generate synergies between businesses and operations● Focus on Asia and Oceania regions

Profitability improvement of domestic businessDirection of the FY2019-2021 Medium-termManagement Plan
This year marks the final year of the FY2019-2021 Medium-term Management Plan. I would like to discuss the
future path that we should take from the perspective of
the Medium-term Management Plan.
In the final fiscal year of the previous FY2016-2018 Medium-term Management Plan, or FY2018, we achieved
consolidated operating profit of 110.2 billion yen, and became the first Japanese paper manufacturer that earned
over 100 billion yen, which had long been our target. We
are currently in the FY2019-2021 Medium-term Management Plan, which takes a further step up on the target byfurther promoting selection and concentration. The plan
was formulated with the anticipation of solidifying thefoundation of our corporate group to reach 150 billion yen
in consolidated operating profit while maintaining a steadyprofit level of 100 billion yen or more by aiming for “Contribution to a Sustainable Society” through steady implementation of the three pillars: “Profitability Improvement ofDomestic Business,” “Expansion of Overseas Business,”and “Promotion of Innovation.”
Specifically, “Profitability Improvement of Domestic
Business” has been positioned as a top priority. During theprevious Medium-term Management Plan, I was very concerned as the greater-than-expected shrinkage of theJapanese market deteriorated the utilization ratio of manufacturing facilities, and reduced our domestic business’
earnings capacity. Therefore, we sought to streamline
business through drastic manufacturing restructuring andbusiness collaboration with other companies, and concentrate secured management resources to investment instrengthening promising businesses, to regenerate andenhance our earnings capacity. With respect to “Expansion of Overseas Business,” the overseas sales ratio has
rapidly risen from less than 10% in FY2010 to 30%, which
I hope to further bring up to around 50% going forward. In
particular, we aim for business expansion from existingbases and synergy between businesses and bases ingrowth regions and growth fields, including the packaging
business in Southeast Asia, India and Oceania, the disposable diaper business in Southeast Asia and China, thethermal paper business worldwide, and the pulp businessworldwide in aiming to improve profitability. We consider● Restructure production system &utilize owned assets effectively● Enhance competitiveness throughbusiness partnership● Concentrate management resources on promising businesses

Promotion of innovation● Promote development andachieve early profitability of
new business and products
Earth-friendly= development of wood-derived
materials and products● Development of new materials including cellulose nanofibers(CNF), wood-derived pharmaceutical products, biodegradable materials, and biomass composite

Business
fields(future)● Development of plastic alternatives through sophistication of paper products
Example: paper straws, molded
pulp products, liquid paper containers, OJI FLEX PACK’AGE (automated packaging system)“Promotion of Innovation” as the key to building the pillarsof our future business. We will further cultivate the technology and know-how we have accumulated in the paper
manufacturing industry to develop new materials andproducts in fostering the pillars of future businesses. For
example, we will accelerate efforts to achieve commercialization of products such as “cellulose nanofibers (CNF),”“wood-derived pharmaceutical products,” and “biodegradable and biocomposite materials” at an early stage.

Review of the First and Second Years(FY2019-2020) and Forecast for the Final
Year (FY2021)
Here, I would like to look back on our performance in
FY2019 and FY2020 as well as talk about our forecast for
FY2021.
In FY2019, consolidated net sales decreased 3% yearon-year to 1,507.6 billion yen and operating profit decreased 4% year-on-year to 106.1 billion yen, as we havemaintained operating profit at over 100 billion yen since
FY2018.
In FY2020, consolidated net sales decreased 10%
year-on-year to 1,359.0 billion yen and operating profit fell
20% year-on-year to 84.8 billion. Operating profit saw
positive factors such as a decline in raw materials and fuelcosts and cost savings effects at each business site insideand outside of Japan, but the impacts of decreased sales
totaled 28.6 billion yen, broken down as 23.9 billion yen in
Japan and 4.7 billion yen overseas, while the loosening inmarket conditions of the overseas pulp business had amajor impact, resulting in a year-on-year decrease in profit. It was a rather unprecedented year with the COVID-19
pandemic, as we struggled in the first half and we eventually fell short of our target of maintaining operating profit at
100 billion yen or higher for the year. However, focusing on
the second half alone, performance improved especially inthe fourth quarter (January to March 2021) despite another state of emergency, resulting in operating profit of 55.5
billion yen, on par with the record high set in FY2018.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

17

Expansion of overseas business

Sustainability Strategy

The following is a quote from Darwin’s evolutionary theory.
“It is not the strongest of the species that survive, nor
the most intelligent, but the ones most responsive tochange.” In other words, “response to change” isResponding to needs of the environmentand society through business activities(Pursuit of restructuring of domestic business)

III. Progress and Future Development of
the Medium-term Management Plan

Contribution to a Sustainable SocietyManagement Strategy

The History of “Transformation” Itself
Forms the History of GrowthGeographicalreach (future)

Business Strategy

Our “Founding Spirit” and “Management Philosophy” arealways at the core of our thinking, enabling us to remain
steadfast beyond change. Our “Founding Spirit” is “unityof economy and morality,” or the idea that “the profits thatbusinesses pursue should benefit society.” This was advocated around 150 years ago by our founder, Eiichi Shibusawa, who has recently been drawing renewed attention.
I view this as a lesson that a company is an entity that is
made alive by society, and a company should take its social responsibility and continue to be needed by society as
the premise of pursuing profit.
This is linked to the ideas of the SDGs, and also incorporated in the Oji Group’s “Management Philosophy” that
upholds the “Creation of Innovative Value,” “Contribution
to Future and the World,” and “Harmony with Nature andSociety.” At the time of our founding, in Meiji era Japan,
we aimed to proliferate books and newspapers to raise
the level of knowledge of the public in contributing to social and economic development. Likewise, we will continue to create innovative value through promoting
challenging manufacturing with foresight into the future inorder to meet the needs and resolve issues of the current
generation and beyond both in Japan and overseas, utilizing the technology and expertise we have gained through150 years of business. Furthermore, as a company thatdevelops its business with forest resources as its core, wewill constantly be aware of co-existing with the environment and committed to contributing to a sustainable society.

present and the future calmly without being complacent,”
and “ability to take action nimbly and swiftly,” plus thesharing of directions of business to move forward, among
all officers and employees, will become a great driving
force. Going forward, we will continue to constantly seekout new opportunities and predict risks, and while we create a growth strategy targeting these, we will also develop
and maintain a structure to nimbly implement measures
as a whole organization.

What the Oji Group Aims For

II. Achieve Sustainable Growththrough “Response to Change”

connected to growth and development. The Oji Grouphas willingly undergone “transformations” by constantly
perceiving “change” and cultivating the organizational
adaptability as the times and the needs of the society andpeople shift.
In the past, we embraced difficult situations and overcame turbulence by merging with various companies inorder to adapt to environmental change and survive. We
are proud of the fact that, by mutually respecting and fostering cultures and customs in the process of such mergers, we have created a foundation that secures andnurtures diverse and flexible human resources, and as aresult, a structure that embraces “transformation” hasbeen established.
As a plethora of events occurred worldwide in 2020,
the year also marked a year of drastic change for the paper industry in Japan. The domestic shipment of Paperboard often used in packaging, such as containerboard
and folding carton base paper, has exceeded that of Paper, including newsprint and printing/communication paper, for the first time. The domestic shipment of Paper
peaked for printing/communication paper in 2000, and fornewsprint in 2006, due to factors such as Japan’s aging
population and declining birthrate, the development of information and communications technology, and the rise ofimported paper. Then, it had continued to gradually decline, with the global financial crisis causing yet anotherrapid decline, which has not recovered to date. However,it was still higher than that of Paperboard. And finally, thissituation reversed. Since the 1990s, we have allocatedmore management resources to the packaging field basedon the perspective of raw material recycling, in addition to
the aging population and declining birthrate, and the development of information and communication technology,
with a particular emphasis to strengthen the corrugatedcontainer business, as a downstream business of containerboard. Around 10 years ago, in 2012, we made the major decision to steer towards business structural reforms
to diversify away from the Paper business, and transitioned to a pure holding company structure in order tofoster stronger conviction as an organization. Since thetransition, we have pursued the optimized production system in response to the shrinking Paper market in Japan,
generated cash flows and freed up management resources, and continuously redistributed them to other promising businesses, including the Paperboard business, andparticularly to other growth areas overseas. With oursteady efforts to adapt to change to date, we have seencontinued growth through making an early shift from Paper to other businesses, expanding from Japan to overseas, and focusing on growth areas and regions.
Our slogan “Beyond the Boundaries” was created intandem with the transition. It expresses our determination
to move forward into the future as a global company byactively going beyond various “boundaries” including
business domains, national territories, and the individual
abilities of our employees, to contribute broadly to society
and the world. When transforming in the face of change,
the cultivation of “ability to perceive and think about the

About the Oji Groupnormal will look like with the changed awareness and demand structure caused by the pandemic. The basic functions of paper are to collect and store information, to wrap
and protect objects, and to wipe and absorb liquid. These
functions remain unchanged even during the pandemic.
By looking at the trend thus far, it is evident which functions will expand and which ones will shrink. We must accurately grasp both upsides and downsides of thechanges, and speed up the restructuring and optimizationof our business portfolio. We will constantly ask ourselves
what society needs, and keep an eye out. Placing ourmain focus on the question, we will continue to create value and provide solutions to issues.

18Message from the President

Targets under the Medium-termManagement Plan

FY2019 results

FY2020 results

FY2021 forecasts—

1,507.6 billion yen

1,359.0 billion yen

1,450.0 billion yen

150.0 billion yen

106.1 billion yen

84.8 billion yen

120.0 billion yen[Domestic]*Maintain stable operating profit of[70 billion yen]

[63.2 billion yen]

[62.0 billion yen][Overseas]

Operating profit[36.1 billion yen]

[21.6 billion yen]

[58.0 billion yen]—

101.3 billion yen

83.1 billion yen

120.0 billion yen

Profit attributable to owners of parent—

58.2 billion yen

49.6 billion yen

70.0 billion yen

Overseas sales ratio

40.0%

29.9%

29.3%

34.5%

ROE

10.0%

8.5%

6.9%

9.1%

0.7 times

0.6 times

0.6 times

0.7 times

Net D/E ratio

Review of Key Measures

Oji Group Integrated Report 2021

Financial Data & Corporate Data

19

“Expansion of Overseas Business”
As for “Expansion of Overseas Business,”overall progresshas been steady, though some projects have been delayed due to the COVID-19 pandemic. In terms of the“packaging business in Southeast Asia, India and Oceania,” FY2019 and FY2020 saw the commencement of operation at the fifth facility in Vietnam, the third in Cambodia,
the fourth in India and the first corrugated container plantin Indonesia. In FY2021, we will introduce the latest cutting-edge facilities at one base in New Zealand along withrelocation and commencement of operations. Moreover,
we have also decided to build the ninth and tenth corrugated container plants in Malaysia and the sixth in Vietnam.
For the future, we will achieve vertical start-up with all of
our efforts as well as consider next measures without interruption. As we anticipate the competition to become
fiercer overseas, we will pursue overall expansion in thearea and enhance our competitiveness through utilizing

Sustainability Strategy“Profitability Improvement of Domestic Business”
First, I would like to look at “Profitability Improvement ofDomestic Business.” Under the “manufacturing restructuring”, we shutdown and relocated various facilities asplanned and without delay over the past two years. In
FY2021, we have promoted the effective use of our facilities including shifting to growth businesses, such as modifying the newsprint machines at the Oji Paper Tomakomai
Mill into containerboard and kraft paper machines. Goingforward, we will consider further business structure transformation in an effort to reinforce our foundation andstrengthen competitiveness.
In terms of “business collaboration with other companies”, in our business partnership with Mitsubishi Paper
Mills Limited, we set up joint ventures for household paperand biomass power generation in FY2019, and in FY2020
we integrated our carbonless paper business and pressboard business and worked to increase productivity andprofitability by promoting selection and concentration of
our management resources, including raw materials procurement, sales channels, and transport methods. Additionally, our joint venture business with ISHIZUKA GLASSCO., LTD. for paper containers became the first in Japanto successfully develop milk carton base paper. It is now
establishing an integrated production system in Japan
spanning from base paper to beverage packaging. Leveraging our cost competitiveness through efficient

the containerboard facility in Malaysia that is planned to
begin operation shortly, strengthening the integrated system from materials to processing, and starting the operation of the state-of-the-art machines. As for the “disposable
diaper business in Southeast Asia and China,” we have
implemented measures to restructure the production system and enhance the production capacity, including adding new converters for disposable diapers in FY2021 in
Malaysia. In Indonesia, we established a factory in FY2019
in order to transition from the conventional processes ofpurchasing and sales to the comprehensive system thatcovers from manufacturing to sales. Sales volume in the
country has been steadily growing. As such, we aim to
add more disposable diaper converters with the launchscheduled for early next year. As demographic dividend
will continue in Southeast Asia going forward, we will expand the disposable diapers business in addition to thecorrugated container business as mentioned earlier. With
regard to the “thermal paper business worldwide,” wehave enhanced and reinforced equipment in Brazil in
FY2021, and will strive to expand sales in South America,
where demand is strong, and export to North America forearly realization of effects. Moreover, we will promptly develop and implement measures in Southeast Asia, where
we believe it is possible to draw out more creativity on
synergy with the downstream bases of printing and processing that joined our Group during the previous Medium-term Management Plan. As for the “pulp businessworldwide,” we acquired in FY2021 equity of minority
shareholders of Japan Brazil Paper and Pulp Resources
Development Co., Ltd., the parent company of one of ourmost important bases, Celulose Nipo-Brasileira S.A. in
Brazil, in order to conduct agile business operations. Further, we are also striving to enhance the productivity andcost competitiveness at each base through upgrading
major facilities.

Management Strategy

Accordingly, it is important to revisit the Medium-termManagement Plan to take a look at the progress for eachkey measure to really examine what we do now that will beeffective for future development before moving on to implementation.

production and superior quality, we will expand these offerings in the domestic market as well as look to overseas
markets as the next target.
In terms of “strengthening and expanding promisingbusinesses”, we will mainly engage in the Packaging,
Household and Consumer Products, Functional Materials,
and Energy Businesses in an energetic manner. This isintended for fully performing our role as a “company witha sustainable business model” and as a “life support company,” of which we have become more aware due to recent environmental changes. In the Packaging Business,in the Greater Tokyo area, which is home to roughly 40%of the business’ growing demand driven by e-commerce,
we decided in FY2020 to construct a new plant in Utsunomiya City, Tochigi Prefecture, in addition to operating
Japan’s largest corrugated container plant in Funabashi
City, Chiba Prefecture. While pushing ahead with businessexpansion, we are exploring ways to utilize the Group’s
strengths as other companies follow the same strategy.
The new plant in Utsunomiya City, Tochigi Prefecture will
be built in one of our base paper production sites. In addition to such improved collaboration from upstream todownstream, we will also pursue new solution services
symbolized by OJI FLEX PACK’AGE (automated packaging system) to increase our market share. Moreover, thisplant will feature a solar power generation system andsupply environmentally-friendly products as a RE100 plant(powered by 100% renewable energy). In the Household
and Consumer Products Business, we must analyze thecauses and results of changes in consumer behaviors in atimely and accurate manner to supply products that themarket truly desires. In FY2020, to help stop the spread of
COVID-19, we began selling medical gowns and masks
completely made in Japan, where all materials are sourced
and processed within Japan. In addition, to expand sales ofhousehold paper in the Greater Tokyo area, we establisheda new household paper converting site in Edogawa Ward,
Tokyo. For disposable diapers, we have decided to increase capacity of converters for adult disposable diapers
given growth prospects following the increase in people
requiring nursing care or other assistance. In the Functional Materials Business, I feel the need to promote R&D-oriented businesses with an even greater conviction than
before while also pursuing the optimal production system.
Amid the quickening shift from gasoline to electric and fuelcell vehicles to achieve a decarbonized society, in FY2021
we have decided to increase capacity of manufacturing
facilities for films used in capacitors for electric vehicles.
Moreover, we will promote development of functional
products that contribute to a sustainable society by utilizing the unique characteristics of paper materials. In the
Energy Business, in FY2019 we started operation of a biomass power generation facility in Hachinohe with a capacity of 75 MW, and today we are working to vertically startup our fourth facility in 2022. Looking ahead, we will expand and reinforce the renewable energy business, including biomass power generation.

Business Strategy

more than 100 billion yen

Ordinary profit

What the Oji Group Aims For

Net salesin the Medium-term Management Plan. This is because
the situation is not what we first expected, as sales volume is not anticipated to fully recover immediately andsome strategic investments were delayed. Nevertheless,we need to make preparations now to ensure we cancapitalize on the recovery wave once the COVID-19 pandemic ends. Toward this end, we are moving ahead witheach individual initiative.

About the Oji GroupIn FY2021, we will aim to increase net sales by 7%
year-on-year to 1,450.0 billion yen and operating profit by
42% to 120.0 billion yen, assuming a moderate economic
recovery along with a recovery in pulp market conditions
and effects of capital expenditures inside and outside ofJapan. We expect to increase profit at each level for the
first time in one year, but the increase still does not represent a satisfactory level when compared with the targets“Promotion of Innovation”
In our “Promotion of Innovation,” we are looking to create
innovative value for the future to go “Beyond theOji Group Integrated Report 2021

20

Message from the President

IV. Aiming for a Sustainable Future

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Last but not least, I would like to send a message to all our
stakeholders.
The Oji Group will continue to work with you in responding to changes of the times, constantly embracing innovations, and creating sustainable value for the future in order
to become a corporate group that never ceases to grow. I
look forward to your continued understanding and support.

Sustainability Strategy

I feel that the reorganization so far has come to fruition,and that we are gradually becoming lean and springy as
we are cutting back on waste. However, as I mentioned
earlier, there is still much work ahead of us. In other words,
there is still plenty of room for growth, and I would like toaccelerate our steps. There is only so much that we cando in the remaining one year, and I believe some initiatives
will be left unaddressed and carried over to the next Medium-term Management Plan. While we will make steadyefforts to address these outstanding issues in the next
Medium-term Management Plan, I hope to put more emphasis on business structural reform and energy business
transformation from the perspective of growing our domestic and overseas businesses and addressing climatechange and marine plastic litter issues, as well as innovation with a focus on new materials development in aiming
for a sustainable future.

Management Strategy

Oji Group Integrated Report 2021

Looking Ahead to the Next Medium-termManagement Plan

The most important element in achieving our management
strategy is “human resources.” They form the foundationof a company’s strengths, and it is of utmost importancefor each and every one of our diverse human resources toshare the Group’s management strategy and policy andexert their maximum potential toward the same vector. It
is my mission to establish such an environment to foster
their abilities and maximize their potential. As such, we aredoing our best in implementing each measure of humanresources development, working style reforms, and promotion of diversity.
Moreover, I would like to reaffirm that we continue to be
a company that prioritize “Safety, Environment and Compliance” over profits, even in times of drastic change. Firstly, as I always talk about “safety”, it is the responsibility of
all managers and supervisors, including directors, to ensure that “employees who come to work in the morning
go back home healthy at the end of the day.” To put thesewords into action, we are promoting the safety of workplaces (making equipment and procedures safe). Regarding the “environment”, our efforts do not just stop at what
I discussed earlier. We will take thorough preventive measures against environmental incidents and product liability
incidents that may instantly cripple our relationship of trustwith the community. In terms of “compliance”, we repeatedly encourage all officers and employees to be fully
aware of “sound common sense,” “sensitivity to immorality” and “courage to take action,” to adhere to laws andregulations as well as social norms, and to conduct everyday activities with a sincere attitude. In order to co-exist
with society as a company, we will prioritize and adhere tothese approaches which form the basis for our company’s
continued existence.

Business Strategy

21

We are accelerating the development of plastic alternative materials and biodegradable materials in order to findsolutions to the issues of marine plastic litter and global
warming. We are also focused on the development of paper materials with enhanced functionality.
Many products are already on the market, such as OJI
FLEX PACK’AGE, liquid containers, and barrier paper. For
the commercialization of future innovation, the key lies not
only in the research and development but also in the engineering capability; therefore, we will be committed tocross-organizational human resources development.

Towards a Corporate Group That Achieves
Sustainable Growth—“Human Resources”
and “Safety, Environment and Compliance”—

What the Oji Group Aims For

Boundaries.” With the paper manufacturing technology
we have amassed over nearly 150 years and renewable
wood resources as our basis, we are developing new materials, such as “cellulose nanofibers (CNF),” “wood-derived pharmaceutical products,” and “biodegradable andbiocomposite materials” in aiming to contribute to a sustainable society.
Unlike in the material processing industry, it takes aconsiderable amount of time to develop fundamental materials. Carbon fiber was developed over 60 years ago in
the 1960s. While the material was originally used for fishing gear and golf club shafts, carbon fiber now finds application in aircraft materials. Material development was thestarting point for contributing to resolving global warming
issues such as improving aircraft fuel efficiency.
CNF is in the spotlight as a wood-derived material thatis stronger than iron and glass yet lightweight, for which
we also have high expectations. It has been more than 10
years since the start of its development, and the material
development is approaching its completion. From now on,
we will have to focus on addressing issues found during
processing of the material. Already-commercialized cosmetics, concrete pump primers, and paints with CNF
make good use of its viscous property and contain it asadditives. In addition, the composite material of polycarbonate and a CNF sheet is being developed for use in car
windows. Going forward, we will progressively push forward with the application development.
With regard to wood-derived pharmaceutical products,
we established Oji Pharma Co., Ltd. in FY2020 for thedevelopment of products including anticoagulant, anti-inflammatory agent, and moisturizer, using chemically synthesized “sulfated hemicellulose” as the base material.

Part of our management philosophy upholds the ideal of“Harmony with Nature and Society,” which, to us, is botha condition for business continuity and an opportunity for
growth.
Here is what I mean by a “condition for business continuity”: We at the Oji Group see the resources for our business, including paper which we have been handling since
our founding, as well as new businesses derived from paper, as finite resources, and we have been engaging inbusiness by thoroughly implementing the sustainablebusiness model of “resource circulation throughout thevalue chain” inside and outside of Japan. In our “forest
recycling”, as the concept states that “those who use
trees have the responsibility to plant trees”, we have been
conducting sustainable forest management through thecontinuous cycle of planting, cultivation, and logging. The
same goes for our “paper recycling” and “water recycling”.
Our mission is to create businesses that will contribute toa sustainable society through resource circulation.
As for “opportunities for growth”, the discussion goesback to “response to change.” The increased awarenesstowards environmental issues around the world itself isalso one of the important changes in the business environment of recent years. As we see the increase in related
news reports on a daily basis, I believe it is an opportunity
for the Oji Group to display our proactive stance and presence towards problem solving by developing strategic
and global measures aimed at the future. In addition towhat I said earlier regarding “Promotion of Innovation,” wewill place our focus, from diverse angles, on creating newvalue and functions unique to our specialty field of wood
resources.
In October 2020, then Prime Minister Suga declared on
the formal occasion of his first policy speech that Japan
will commit to carbon neutrality by 2050. At the sametime, the Oji Group has also formulated “Environmental
Vision 2050” and “Environmental Action Program 2030”
that start from FY2021. These vision and goals specify ourtargets: (i) maximize CO2 absorption and fixation capability
through forest preservation and afforestation in the580,000-ha Oji Forests we own and manage in Japan andoverseas, (ii) implement thorough energy conservation
and use of renewable energy in manufacturing and logistic
service divisions in achieving net-zero greenhouse gas
emissions by 2050, and (iii) reduce these emissions by
70% or more compared to FY2018 by 2030. The entire
Group is committed to achieving these targets including
maintaining and preserving biodiversity and reducing environmental burdens.
In December 2020, we announced our support for the

About the Oji Group“Harmony with Nature and Society” as
Criteria for Business Continuity and Growth
Opportunities, and Establishment of“Environmental Vision 2050,” and“Environmental Action Program 2030”

recommendations of the “Task Force on Climate-related
Financial Disclosures (TCFD)” and committed to promoting information disclosure from a bird’s eye view on risks
and opportunities concerning governance, strategy, risk
management posed by climate change. We announced
our determination to promote environmental management
towards “Environmental Vision 2050” and “Environmental
Action Program 2030.”

22

Value Creation Process

Social Issues, Megatrends
and Global Goals

Provide value tosociety

Climate change
Natural disasters
Biodiversity
Resource depletion
Environmental pollution (issues
such as marine plastic litter)
Increased concern
about human rights
Increase in health-consciousness with greater
longevity

Solve social issues

About the Oji Group

Mitigate climate change
Conserve biodiversity
Reduce environmental burden

SocialimpactProvide products vital to everyday life
Realize a society with healthy longevity
Respect for human rights

Core Competencies

Material Issues● Global expansion of

Sustainable
Business Model

P25

FY2019–2021
Medium-termManagement Plan

ESG Perspective● Mitigation and adaptation toclimate change● Sustainable forest management(forest recycling)● Responsible raw materials

procurement● Stable supply of safe andsecure products● Reduction of environmental
burdens● Effective resource utilization(paper and water recycling)● Respect for human rights● Ensuring workplace safety andhealth● Inclusion & diversity

Risks
and
Opportunities
P29

Business Perspective● Profitability improvement ofdomestic business● Expansion of overseas
business● Promotion of innovation

P31

Products

Business Strategy
P47● Household and Industrial

Materials Businesses● Functional Materials Business● Forest Resources and Environment

Enhance
corporate valueMarketing Business● Printing and Communications

Media Business● Other businesses

150

Appropriate Utilization of Management Resources

Oji Group Integrated Report 2021

Natural capital

Human Resource
Measures

Promotion of
Innovation

Sustainable
Forest Resources(pp. 102–105)(pp. 41–46)(pp. 39–40)

Manufactured capital

Financial capitalSocial & relationship capital

List of AffiliatedCompanies

Financial Data
Highlights

Responsible Raw
Materials Procurement(pp. 115–116)(pp. 109–110)(pp. 90–91)

billion yen or more

(maintain stable operating profit
of more than 100 billion yen)

Increase capital

Financial Data & Corporate Data

23

Intellectual capital

Impact on the
Oji Group

Sustainability Strategy

FY2019–2021
Medium-term Management Plan
Performance Indicator Targets
Consolidated operating profit

Human capitalManagement Strategy

Resource circulation
throughout the value chain

manufacturing that supports
lives and industry● Sustainable forest management● Utilization of renewable
resources● Development of new materials
derived from wood fiber● Application of fundamental
paper manufacturing
technologies

Contribute to asustainable society

P28

Business Strategy

Management Philosophy

P27Core Competencies
Centered on Sustainable
Forest Resources

What the Oji Group Aims For

The sustainable business model (resource circulation throughout the value
chain) forms the foundation of the Oji Group.
The Group will identify material issues
through the core competencies that underpin the foundation, create social andeconomic value through business activities
based on the risks and opportunities recognized in these issues, and contribute to asustainable society.

Overseas sales ratio40%(with a target of more than
50% in the short term)

Oji Group Integrated Report 2021

24

Sustainable Business Model

Sustainable business model “Resource circulation throughout the value chain”
About the Oji GroupThe sustainable business model which serves as the foundation of the Oji Group is supported by three forms of recycling: “Forest recycling,” in which we practice sustainable forest management through growing, harvesting and planting
trees due to the fact that approximately 60% of the raw material used in paper is recovered paper, and the remaining
40% comes from wood; “water recycling,” in which we reduce water consumption by circulating and reusing water inmanufacturing processes and purify wastewater; and “paper recycling,” in which we collect and recycle paper products.
By deploying this model globally, we are working to enable our businesses to help build a sustainable society.

Procurement

Sustainable
forestresources

Lumberproduction

Timberoffcuts

Manufacturing

Manufacturing

Pulp

Woodchips

Paper,
paperboard,
new materials

Fuel
Sawmill residue

Black liquor

Unused trees

Waste(Renewable energy)

Pulp
manufacturing

Wood pulp
Recycled
pulp

Water

Forestrecycling(Effective resource
utilization)(Sustainable forest
management)

Used
paper
recoveryWater
treatment
business

Contribute to asustainable
society

Products

Paper
recycling(Effective resource
utilization)

Management Strategy

recycling(Consumption)

Business Strategy

Biomass power generation

Sales

Sales,
management,
logistics

Consumption

Development of new materials
derived from wood fiber
Cellulose

Hemicellulose

Oji Group Integrated Report 2021

Toward the realization of a decarbonized society, renewable forest
resources have gathered significant attention. Alongside the conventional use of wood resources as raw materials for paper manufacturing, the Oji Group is accelerating their use in fields outside of
papermaking. Specifically, we are expanding our biomass power
generation business, which utilizes wood chips as a primary fuel,across Japan, and are proactively making use of unused trees suchas forest residues, for which few applications had previously beendeveloped. In addition, we are accelerating green innovations forthe future, including developing biomass plastics derived from cellulose, promising replacements for existing plastics; cellulose nanofiber (CNF); and wood-derived pharmaceutical products.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Various wood-derived materials
Cellulose-derived Biomass Plastics
Cellulose nanofiber (CNF)
Sulfated hemicellulose, etc.

Aiming for Further Development of the
Sustainable Business Model

Sustainability Strategy

CO2 absorption
and fixation by
forests

25

What the Oji Group Aims For

Cascading use of forest resources

26Core Competencies and Material Issues

Material Issues

The Oji Group possesses Oji Forests spanning 580,000 ha domestically and overseas. As the Group engages in a cycleof cultivating forest resources, utilizing them, and cultivating them again, we are developing a wide range of businesses without regard for business domain. Rooted in our core competencies centered on forest resources, we will aim todevelop business and contribute to realizing a sustainable society.

Based on our core competencies, we have extracted material issues that have significant impacts on sustainable business model of the Oji Group. These material issues have been identified based on evaluations and analyses of relevant
domains from the perspectives of ESG and business.

Process for identifying material issues

About the Oji Group

Core Competencies

ESG Perspective

Identify
corecompetencies

3

Sustainable Forest Management

Business Perspective

Profitability improvement of domestic business
Expansion of overseas business● Promotion of innovation●●

Business importanceMaterial Issues and Reason for Identification
ESG Perspective

Giving due consideration to environmental conservation, theGroup possesses production forests primarily for producing
wood spanning a total of 450,000 ha, with 190,000 ha domestically and 260,000 ha overseas, as well as conservation forests
spanning 130,000 ha. Implementing sustainable forest management, which is environmentally, economically, and socially conscious, forms the basis of our businesses.

Mitigation of and adaptation toclimate change

Utilization of Renewable Resources

Responsible raw materials
procurement

The Oji Group’s procurement of raw materials is supported by numerous suppliers in Japan and overseas. Working to improve human rights,
labor, environmental, and other issues at all of our suppliers, and fulfilling our social responsibilities are things which are essential to thecontinuation of our business activities.

Stable supply of safe andsecure products

As a manufacturer, the core of our business involves strengthening relationships of trust while building a system which provides services andquality which customers in a variety of fields can use with peace of mind.

Reduction of environmental burdens

We have a responsibility to promote the prevention of pollution, and in order to contribute to the conservation of local environments, weestablish voluntary management standards which are even stricter than existing laws and regulations regarding wastewater and emissions.

Sustainable forest management(forest recycling)

Effective resource utilization

The Oji Group’s

4

ForestResources

27

Oji Group Integrated Report 2021

5

Aiming to create new value, we are developing new materials,
including cellulose nanofiber (CNF), a promising material fornumerous fields; wood cellulose-derived biomass plastics; andwood hemicellulose-derived pharmaceutical products.

Application of Fundamental Paper
Manufacturing Technologies
Utilizing the fundamental technologies we have cultivated in
our paper manufacturing business, we are aiming to expand
our businesses in a variety of fields which will help reduce ourenvironmental burden. This includes developing our renewableenergy business with a focus on hydroelectric power generation and wood biomass power generation, industrial water production and industrial wastewater treatment businesses.

As responding to the progression of climate change becomes an urgent issue, it is essential to promote GHG emission reductions in the
production and logistics processes, and extensively ramp up CO2 absorption via the expansion of company-owned forests.
In order to secure a stable supply of raw materials and, at the same time, maintain forests’ functions in areas such as conservation of
biodiversity and CO2 absorption, it is necessary that we engage in the sustainable management of the vast forests we own in Japan andoverseas.

It is important that we work to protect resources and reduce waste by maintaining our recovered paper recycling systems through theprocurement of recovered paper at fair prices, promoting the use of recovered paper, and promoting the effective use of waste and water
resources in our manufacturing processes.

Respect for human rights

In order to achieve an even greater level of globalization going forward, it is necessary that not only our employees but all of our suppliers
share our beliefs regarding respect for human rights, and implement concrete initiatives which will help prevent and reduce human rights
issues.

Ensuring worksite safety and health

Ensuring employee safety and building a work environment where people can work with a sense of security is the cornerstone of our continued
existence as a corporation. Also, responding rapidly to disasters, infectious diseases, and other risks is essential to ensuring safety and health.

Inclusion & diversity

As a global enterprise, it is essential to have a diverse array of human resources that flourishes regardless of gender, age, disability, or
nationality, and to receive a variety of values and ideas in order to enhance corporate competitiveness and further development.
Business Perspective

Material Issues

Reason for Identification

Profitability improvement ofdomestic businessFor our businesses whose domestic market has contracted more than assumed, we have determined it essential that we work to resuscitateand enhance their earnings capacity by fundamentally restructuring production systems and promoting streamlining through business
partnerships with other companies.

Expansion of overseas businessIn overseas regions and business fields which are expected to continue experiencing growth in the future, we have deemed it important toexpand outward from existing sites, aim to create synergies between businesses and between sites, and enhance profitability.

Promotion of innovation

We have deemed it essential that we further cultivate the technologies and expertise we have accumulated in our paper manufacturingbusiness, accelerate the development of innovative new materials and new products with a focus on wood resources, and develop futuresources of revenue.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Sustainable

Development of New Materials
Derived from Wood Fiber(paper and water recycling)

Reason for Identification

Sustainability Strategy

We promote recycling paper. Recovered paper makes up about
60% the raw material of the paper. We also thoroughly circulate and reuse the water that is essential to paper manufacturing in our production processes, and create systems for
reducing the amount of water used and purifying wastewater.

Material Issues

Management Strategy

2

We are proactively developing our businesses on a global level, including our packaging business, which engages in the integrated manufacturing of corrugated containers from basepaper; as well as our household paper, thermal paper, pulp,
and other businesses. We are expanding our businesses in response to continuously growing overseas market needs.

Assess andapprovevalidity at a
Management
Meeting

Business Strategy

1

Global Expansion of Manufacturingthat Supports Lives and Industry

Assess andanalyze
Extract possible material issues
material issues in company
with externalorganizations

Social importance●

What the Oji Group Aims For

Mitigation and adaptation to climate change
Sustainable forest management● Responsible raw materials procurement● Stable supply of safe and secure products● Reduction of environmental burdens● Effective resource utilization● Respect for human rights● Ensuring worksite safety and health● Inclusion & diversity●

28

Risks and Opportunities

ESG Perspective
Associated Risks and Opportunities▲ Risk ○ Opportunity

Material Issues

Sustainable forest
management(forest recycling)

Responsible raw materials
procurement▲ A decline in trust of stakeholders due tospread of negative rumors○ Contribution to society through stable supplyof safe and secure corrugated containers,
household paper, and hygiene products, andthe resulting increase in corporate value▲ Adverse effects on society due to pollution
and the resulting decline in trust of
stakeholders○ An increase in demand for eco-friendly
products owing to changes in consumerawareness

Material Issues

Reduce GHG emissions through improving production efficiency, saving energy, and utilizing
renewable fuel and waste fuel⃝ Expanded use of non-fossil fuels and biomass fuels as alternatives to coal
⃝ Sustainable forest management such as promotion of forest plantation and conservation ofcompany-owned forests⃝ Maintain and expand the multi-functionality of forests⃝ Absorb and fix CO2 through sustainable forest management⃝ Develop biomass power generation business⃝ Develop eco-friendly products⃝ Opportunities arising from introduction of carbon pricing (especially emissions trading)⃝

Expand CSR procurement, taking into consideration the environment and society following theOji Group Partnership Procurement Policy and Wood Raw Material Procurement Guidelines⃝ Central management for appropriate procurement of major raw materials⃝ Manage the supply chain thoroughly(appropriate procurement through supplier monitoring, risk assessment, securing various suppliers,
etc.)⃝ Supply of FSC™ certified products (FSC™ C014119, etc.)⃝

Domestic business fluctuations and the continuing decline of the population could result in declines in demand for our
products as well as in sales prices, affecting the Oji Group’s performance.
Risks arising fromfluctuations in demand(paper and water recycling)▲ Impact of resource depletion on corebusinesses○ Deployment of water treatment technology

Opportunities for growth

Stably supply own products
Ensure safe quality design and management in compliance with relevant laws and regulations andstricter voluntary management values⃝ Provide customers with information on safety of raw materials (chemicals, materials)⃝ Supply of hygiene products such as masks and gowns to prevent the spread of infectious diseases
such as COVID-19⃝⃝

Risks arising from changes
in international market
conditions

Set voluntary management values that are stricter than the environmental regulatory standards
Purify wastewater and save emissions of chemical substances in exhaust⃝ Reduce and effectively use waste⃝ Develop eco-friendly products and biodegradable materials⃝

Risks associated withoverseas business

Formulate and implement the “Oji Group Corporate Code of Conduct”, the “Oji Group Behavior Standard”, and the “Oji Group Human Rights Policy”⃝ Perform internal audits⃝ Implement the whistleblowing system⃝ Raise awareness of compliance and human rights through in-house training⃝ Assess risks associated with suppliers’ respect for human rights

29⃝

Oji Group Integrated Report 2021

Implement human resource strategies and develop human resources⃝ Promote working style reforms⃝ Promote diversity

Main countermeasures

Opportunities for growth

Risks associated withstructural changes indemand arising fromdevelopment of innovation
Promotion of innovation

Opportunities for growth

Advancing into countries and regions experiencing continued high economic growth contributes to the expansion andstrengthening of a business foundation which will help the Oji Group to grow even more. The Oji Group is developing
businesses in emerging regions harnessing the technical superiority of its existing businesses and is expanding
overseas with the aim of achieving an overseas sales ratio of 40%.

COVID-19 has resulted in the popularization of remote work, furthering digital transformation and significantly altering
peoples’ lifestyles. The Oji Group’s performance could be affected greater than anticipated due to further changes indemand in markets for graphic paper.
Main countermeasures
Facing a shrinking market, we are restructuring domestic business production systems and are striving to secure cash
flow. The cash thus obtained is being invested in businesses in growth markets in Japan and overseas, and is also
being appropriated for the development of new material products.

Due to the advancement of digital transformation, demand for mobile devices and a diverse array of other electronic
devices is on the rise. The film products of the Oji Group are employed in smartphones and other precision devices aswell as electric vehicles, and this business is undergoing rapid growth. In addition, the Group is moving forward withinitiatives to complement its weaknesses and transform them into strengths through partnerships with other companies.
Specific examples include a business partnership with Mitsubishi Paper Mills concerning carbonless paper and otherproducts, and a paper carton business with Ishizuka Glass.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Inclusion & diversity○ Securing outstanding human resources○ Creation of innovative value○ Contribution to globalization

Establish safety and health management structures and promote activities aimed for safety
and health⃝ Thoroughly ensure safety in the handling of machines and equipment and in other operations⃝ Promote safety education (introduce VR risk experience education, etc.)⃝ Promote physical and mental well-being of employees⃝ Create comfortable work environments⃝ Respond to infectious diseases including COVID-19

We monitor markets in relation to the procurement of raw materials, strive to maintain a variety of suppliers, andpromote advantageous, stable procurement group-wide. In terms of recovered paper, we strive to maintain recovered
paper recycling systems. We also strengthen coordination among Oji Group companies with the aim of ensuring stable
recovered paper procurement.

We establish regional headquarters to gather information on the political, economic, and social conditions of countries inwhich we do business and neighboring countries, and prepare for all relevant risks. In terms of business, we diversify
risks by expanding across wide areas. Financially, we mitigate the effects of exchange rates through derivatives, andutilize group financing to secure liquidity on hand. With regard to human rights issues, based on the “Oji Group Human
Rights Policy,” we implement initiatives aimed at ensuring respect for human rights.

Paper recycling (improve the recovered paper utilization ratio)⃝ Reduce water intake and improve water recycling⃝ Expand the water treatment business overseas⃝⃝

Main countermeasures

The Oji Group has promoted global business expansion. Some markets where the Group does or will do business poserisks such as political or social instability; decelerating economic growth; revisions to laws, regulations, and tax
systems; destabilizing financial conditions; and human rights issues. These risks could affect the Oji Group’s overseas
business strategy and future plans.

⃝▲ Occupational accidents▲ Health of employees hindered by the spreadof infectious diseases○ An increase in trust of employees and otherstakeholders resulting from prompt
response to disasters and infectious
diseasesIn overseas markets which continue to exhibit strong economic growth, demand for household paper products is risingin accordance with increasingly sophisticated lifestyles. In addition, per the expansion of distribution due to thediversification of consumption, demand for corrugated containers and other packaging materials is on the rise. In suchcountries, we will be proactively investing in our household paper and corrugated container businesses.

Sustainability Strategy

Ensuring workplace safety
and health▲ A decline in trust of stakeholders due to lackof consideration for human rights

We are working to strengthen our business foundation via thorough cost reductions. In the field of industrial materials,
we are promoting total, integrated material and processing packaging solutions, thereby strengthening productdevelopment capabilities and curbing the effects of demand fluctuations. In other fields, as well, we are working on thedevelopment of paper products and new materials to support the shift away from plastics.

The procurement prices of woodchips, fuel oil, and other raw materials are influenced by fluctuations in demand,countries’ changes to their trade policies, and international disputes. In addition, the sales prices of pulps are linked tointernational market conditions. Such price changes affect the Oji Group’s performance.

⃝

Respect for human rights

Main countermeasures

Profitability improvementof domestic business

Expansion of overseas
business
Effective resource utilization

Business Risks and Opportunities (Relating to Group Management Strategy)/Countermeasures against Risks

Management Strategy

Reduction of environmental
burdens▲ Occurrence of cases lacking consideration
for the environment and society in the
supply chain○ An increase in demand for eco-friendly
products owing to changes in consumerawareness

Securities Reports: https://investor.ojiholdings.co.jp/ja/ir/library/securities.html (available only in Japanese)

Business Strategy

Stable supply of safe andsecure products▲ Greater natural disasters caused by extreme
weather▲ An increase in costs due to strengthening
and introduction of the carbon tax,
introduction of an emissions trading system,etc.
▲ Impact on sales from changes in theevaluation of corporate attitudes and values ofthe market○ An increase in demand for low-carbon
products○ An increase in value of company-owned forests
through trading carbon credits associated withthe carbon absorbed by the forests

Main Countermeasures against Major Risks

Business Perspective

What the Oji Group Aims For

Mitigation and adaptation toclimate change

Material Issues (ESG) and KPI pp. 81–82

About the Oji Group

This section presents the risks and opportunities posed by material issues in various domains from the perspectives of
ESG and business. Note that risks and opportunities as seen from a business perspective are limited to those concerning our management strategy.

30Medium-term Management Plan

FY2019–2020 Results and FY2021 Priority Measures

FY2019–2021 Medium-term Management Plan

FY2019 Major Results

Review of the Strategies●Apr.

FY2015 and earlier

FY2019–2021

FY2016–2018●Sep.

Business restructuring through transformation ▶A truly global and innovative value-creating company that grows sustainably

Fundamental Policies

Fundamental Policies

●Nov.

●Dec.

Fundamental Policies● Expansion of overseas● Profitability improvement ofbusinesses● Development of new
businesses and products● Further expansion of overseas
businesses

businesses● Concentration / advancementof domestic businesses● Enhancement of financial
foundation

domestic business● Expansion of overseas
business● Promotion of innovation★ Contribution to a sustainable
society●Feb.

Start of commercial operation of JV
household paper business with MPM*
Start of commercial operation of JV
biomass power generation with MPM*
Start of joint procurement of imported
woodchips with Chuetsu Pulp & Paper and
MPM*
Start of sales of OJI FLEX PACK’AGE, anext-generation packaging solution, andRakudan, its packaging material
Shutdown of the #9 machine at the Oji Paper
Tomioka Mill*MPM: Mitsubishi Paper Mills●Jun. Shutdown of the #N-5 machine at the Oji
●Jun.
●Jun.
●Jul.
●Jul.

●Sep.
●Sep.

●Sep.
●Sep.

Major Indicators
FY2015 and earlier
Consolidated
operating profit¥90.0 billion

Overseas sales
ratio
ROE

Targets

Final fiscal year
results

Targets

FY2021 forecasts¥72.0 billion¥100.0 billion¥110.2 billion

Over ¥150.0 billion¥120.0 billion

26.0%

27.8%

35.0%

32.0%

40.0%

34.5%

7.0%

2.1%

8.0%

7.7%

10.0%

9.1%

Overview of the FY2019–2021 Medium-term Management Plan

Contribution to a Sustainable Society
Responding to needs of the environment and society
through business activities● Restructure production ● Expand organicallysystem● Enhance competitive-

from existing bases● Generate synergies

ness through businessbetween businesses
partnershipand operations● Concentrate manage- ● Focus on Asia andment resources on
Oceania regions
promising businesses

Promotion of
innovation

150 billion yen
Maintain stable
operating profit of morethan 100 billion yen

10.0%

Oji Group Integrated Report 2021

Marketcapitalization

At least
trillion yen●Oct. Transfer of pressboard business from MPM*
●Dec. Shutdown of the #3 machine at the Oji

Materia Nayoro Mill

●Dec. Shutdown of the pulp manufacturing facility

at the Oji F-Tex Ebetsu MillWith a target of morethan 50% in the shortterm

Start of our third biomass power generation facility, fourth underconstruction and scheduled to start operating in Sep. 2022

Start of operation of one of the largest corrugatedcontainer plants in Japan in a major consumption area

Tomakomai Mill newsprint machine to becomecontainerboard machine, resume operation

Amid the increasing importance of online shopping and the logistics industry, growth in demand
for the corrugated containers which support themis expected to be particularly large in the Kanto
region. Accordingly, in the Funabashi area in Kan➡ P58
to, we have retrofitted an existing logistics center
to start the commercial operation of one of thelargest corrugated container plants in Japan.
Further, we have decided to relocate andbuild a new corrugated container plant on the
grounds of a containerboard mill in the Utsunomiya area (start of commercial operation
scheduled for Oct. 2022), putting in place a sysMPM Oji Eco-Energy’s biomass power generation tem that can supply higher quality products in asustainable and efficient manner.
facility (started operating in Sep. 2019)

A newsprint machine at the Oji Paper Tomakomai Mill shutdown in June 2020 has been retrofitted into a containerboard and kraft paper
machine and started trial operation in June
2021. In addition, two containerboard machinesat the Nayoro Mill will be shut down in September and December of 2021, respectively, and weare planning on transferring one of these to Tomakomai to consolidate production. Leveraging facilities in our possession as well as geographical convenience, we will engage in the
restructuring of production systems Groupwide, meet increasing domestic and export demand for containerboard, and prepare for intensifying competition at the same time.

Through the expansion of renewable energy
business and the strengthening of our biomass fuel business, we are aiming to contribute to the prevention of global warming.

Start of operation of new household paper processing facility in
Edogawa Ward, promoting sales expansion in the Greater Tokyo area

➡ P48

➡ P48

In September 2020, we started operationof a processing facility in Edogawa Ward
to utilize household paper base paper
newly being manufactured in China.
Morishigyo Chiba Plant(start of commercial operation Jul. 2020)

The shutdown #N-5 machine at the Oji Paper
Tomakomai Mill (newsprint)

The Oji Materia Nikko Mill where the new Oji
Container Utsunomiya Plant will be built

The #L-1 machine (post-retrofit name of the #N-5 machine)at the Tomakomai Mill (containerboard, kraft paper)➡ P51

Maintaincurrent status** FY2018 result: 0.7 times

ROE

31

40%

1

● Promote development

and achieve early
profitability of new
business and products

Overseas sales ratio

At least

Note: Scheduled to be relocated to and resume
operation at the Tomakomai Mill (Apr. 2022)

Financial Data & Corporate Data

Profitability
Expansion of
improvement ofoverseas businessdomestic business

FY2021 Performance Indicator Targets
Consolidated operating profit(former #N-5 machine) at the Oji Paper
Tomakomai Mill as a containerboard andkraft paper machine●Sep. Shutdown of the #2 machine at the Oji
Materia Nayoro Mill

Sustainability Strategy

Under the FY2019–2021 Medium-term Management Plan, the Oji Group aims to constantly earn over 100 billion yen in
annual consolidated operating profit through “contribution to a sustainable society,” with “profitability improvement of domestic business,” “expansion of overseas business” and “promotion of innovation” positioned as the fundamental policies.
Amid the continuing impact of COVID-19, we are not planning on achieving our performance indicator targets. However, inthe final year of the current Plan, we will continue to steadily move forward with Plan measures.
Group Fundamental Policies●Jun. Start of trial operation of the #L-1 machine

Management Strategy

Targets

Paper Tomakomai Mill
Shutdown of the #4 machine at the Oji F-Tex
Ebetsu Mill (#1 machine shutdown in Jul.)
Start of supply of medical isolation gownbase material (non-woven fabric)
Start of commercial operation of new non-woven
fabric face mask manufacturing facility
Start of commercial operation of new
Morishigyo Group corrugated container
plant (Funabashi City, Chiba Prefecture)
Start of liquid paper containers businesswith ISHIZUKA GLASSStart of commercial operation of a newhousehold paper processing machine(Edogawa Mill)
Transfer of carbonless paper business to
MPM*
Shutdown of the #N-1 machine at the Oji
Paper Tomakomai Mill

Pick Up

FY2019–2021

FY2016–2018

Final fiscal year
results

FY2021 Main Priority Measures

Business Strategy● Deepening of the core

FY2020 Major Results

What the Oji Group Aims For

Our Goal

Profitability improvement of domestic business

About the Oji GroupIn order to continuously increase corporate value in the ever-changing world, the Oji Group has formulated and is implementing a strategic medium-term management plan that promotes business restructuring through transformation
based on its Management Philosophy and sustainable business model.

●Industrial Materials Business ●Household and Consumer Products Business ●Functional Materials Business●Forest Resources and Environment Marketing Business ●Printing and Communications Media Business ●R&D and others

Net D/E ratio

Produced at the Edogawa Mill, our Premium Soft
Double-length Toilet Rolls

Oji Group Integrated Report 2021

32

Medium-term Management Plan

FY2019–2020 Results and FY2021 Priority Measures●Industrial Materials Business ●Household and Consumer Products Business ●Functional Materials Business●Forest Resources and Environment Marketing Business ●Printing and Communications Media Business ●R&D and others

Expansion of overseas business

Promotion of innovation

FY2019 Major Results
●Jul.
●Nov.

●Feb.
●Mar.

Vietnam: Start of commercial operation of●Nov.
fifth corrugated container plantBrazil: Construction for the pulp business●Feb.
profitability enhancement
Indonesia: Start of commercial operation of ●Mar.
a new disposable diaper plant
Cambodia: Start of commercial operation of
third corrugated container plant
India: Start of commercial operation of fourth
corrugated container plant

FY2021 Main Priority Measures

China: Start of commercial operation of a
new filter plantBrazil: Phase 1 of construction to reinforce
thermal paper machine
Indonesia: Start of commercial operation of
first corrugated container plant

●Apr.
●May
●Jul.
●Fall
●Oct.

●Nov.
●Dec.
●Jan.

●Apr.
●Apr.
●Apr.
●Aug.
●Sep.
●Oct.

●Dec.
●Jan.
●Feb.

FY2020 Major Results

Commercialization of CNF* AUROVISCO CS as a cosmetic ingredient
Adoption of hydrolyzed xylan by ROHTO Pharmaceutical for their cosmetics
Start of provision of SILBIO BARRIER, a paper material with barrier properties
Development of KAMIWAZA, a paper-based temporary construction material used in civil engineering
Adoption of our products by Nestlé (Thailand) for packaging materials for their products
Adoption of our biomass plastic business by the Ministry of the Environment as thecommissioned project
Provision of technology of CNF* reinforced polycarbonate resin (automobile window application)
Start of sales of OJI FLEX PACK’AGE and Rakudan
Adoption of our products by Nestlé (Japan) for packaging materials for their products
Adoption of CNF* AUROVEIL for materials for table tennis rackets*CNF: Cellulose nanofiber

Pick Up●Apr. Establishment of Oji Pharma●Aug. Development of a product with high-grade

transparency of SILBIO BARRIER, a papermaterial with barrier properties●Aug. Start of provision of PaPiPress, a molded
pulp product●Nov. Conclusion of capital and business
partnership with ReqMed

FY2021 Main Priority Measures●May

Establishment of Oji Medicinal Plants
Laboratory●Jul. Adoption of PaPiPress by ALBION for theircosmetics containers●Aug. Start of first-ever production of milk carton
base paper in Japan●Sep. Adoption of our products by Nestlé (Malaysia)
for packaging materials for their products●Sep. Three new products added to SILBIO series

Pick Up
Provision of technology for CNF composite
resin glass at Tokyo Motor Show 2019

Proactive advancement into the pharmaceutical products
business with the establishment of Oji Pharma

Through in-house production, we will increase the costcompetitiveness of production. As sales expansion isprogressing steadily, we are also planning on building
a new processing machine targeting early 2022.

The packaging business has experienced
remarkable growth in the Southeast Asiaand Oceania regions, and during FY2019–
2021, we have built corrugated container
plants in Vietnam (5), Cambodia (3), India(4), Indonesia (1), and New Zealand (4).
We have also decided to build new plants
in Malaysia (9 and 10) and Vietnam (6) targeting FY2022 and beyond.
Amid continuing expansion of converting sites, we will start operation of a newcontainerboard facility with a production
capacity of 450,000 tons per year in Malaysia. At the same time, we have also
engaged in drastic improvements to ourenergy and water costs. By strengthening
our production of highly cost competitive
base paper and increasing our supply toGroup companies, we will enhance thefoundation of our entire corrugated container business and seek to steadily capture the growing demand for corrugatedcontainers.

We are moving forward with a new businessaimed at replacing conventional plastics derived from fossil fuels with sustainable biomass-derived plastics. This same businesshas been adopted as a Demonstration Project for a Plastic Resource Circulation System toward a Decarbonized Society by the
Ministry of the Environment. Using non-edible wood pulp as the raw material in placeof food sources such as sugarcane andcorn, we are aiming to avoid competingwith food resources while reducing atmospheric CO2 and contributing to the prevention of global warming.

The Oji Group provided the technology forresin glass combined with cellulose nanofiber (automobile window application) exhibited by Toyota Motor East Japan at
Tokyo Motor Show 2019. Compared to inorganic glass, resin glass is lighter inweight and in turn shows promise in helping to reduce automobile weight (and thus
reduce CO2 emissions during operation).
Using cellulose nanofiber for reinforcement makes it possible to drastically reduce the thickness of resin glass, which is
expected to reduce weight even further.

In April 2020, we established Oji Pharma with the aim offurther strengthening collaborations with, among others,
universities and pharmaceutical companies, in order tocommercialize pharmaceutical products using sulfatedhemicellulose, which can be chemically synthesizedfrom hemicellulose derived from wood resources.
In addition, in November of the same year, we invested in and engaged in joint development with ReqMed.
ReqMed is a company developing pharmaceutical products using pentosan polysulfate sodium, which can similarly be derived from wood resources. Going forward,
we will continue to promote initiatives aimed at furthering our pharmaceutical products business.

➡ P51

The PT Oji Indo Makmur Perkasa Factory(Indonesia)

Brazil: Facility expansion and production capacity
enhancement of thermal paper business
By engaging in construction for facility expansion
and reinforcement to roughly double production
capacity, we will strengthen sales in Brazil (current
market share: approximately 85%) and exports toCentral and South America.
➡ P56

Ojitex Haiphong Ha Nam Plant(Vietnam) (started commercial operation Jul. 2019)

Harta Cambodia Plant(Cambodia) (started commercial operation Feb. 2020)

Note: Figures in parentheses refer to the ordinal Oji India Packaging Plant
number of the plants.
(India) (started commercial operation Mar. 2020)➡ P43

Biomass plastic

Sugar solution

➡ P44

➡ P45

CNF are light, durable, and resist deformation due to heat

Joint research with Hokkaido University

A vehicle exhibited at the Tokyo Motor Show 2019

Research and development samples➡ P49

Supply ofbase paper

Oji Papéis Especiais PC3 coater(Brazil)33

Oji Group Integrated Report 2021

GSPP PM3 containerboard facility(Malaysia)

United Kotak Plant(Malaysia) (scheduled to start commercial operation Jan. 2022)

We are also developing biomass plastic films

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Promotion of biomass plastic development as the commissioned
project of the Ministry of the Environment

Sustainability Strategy

Malaysia: Start of a new containerboard facility, promoting expansion andreinforcement of the business through integrating of material and converting

Management Strategy

Indonesia: Start of operation of ourown disposable diaper factory

Business Strategy

Malaysia: Machine expansion and site
integration of disposable diaper business
Acquisition of treasury stock in Japan Brazil
Paper and Pulp Resources Development
China: Start of commercial operation of
fourth corrugated container plant
Malaysia: Expansion and start of commercial
operation of containerboard facility
New Zealand: New construction, relocation,and start of commercial operation ofcorrugated container plantBrazil: Phase 2 of construction to reinforce
thermal paper machine
Brazil: Expansion of thermal paper
machineMalaysia: Start of commercial operation of
ninth corrugated container plant

FY2019 Major Results

What the Oji Group Aims For●Jan.

FY2020 Major Results

About the Oji Group●Industrial Materials Business ●Household and Consumer Products Business ●Functional Materials Business●Forest Resources and Environment Marketing Business ●Printing and Communications Media Business ●R&D and others

34Special Feature (1)Action on Climate Change — Toward the Realization of a Low-

Aiming for

For the Oji Group that utilizes a range of renewable resources, including wood as raw materials, theconservation of the natural environment is essential from the perspective of business continuity. We also
believe that it will be able to enhance the sustainability of its business activities through proactive measures toaddress the issue of climate change.
In order to clearly lay out our course of action, our Group formulated our “Environmental Vision 2050,”
which declares our aims for 2050 and centers around our goal of net-zero carbon, and our “Environmental(5,485 kt)

Breakdown:−50% from CO2 absorption and fixation
by forests−20% from GHG emissions reduction“Net-Zero Carbon”
Reducing greenhouse gas (GHG) emissions tovirtually zero
“Sustainable Forest Management” through the promotion of forest•Implement
plantation overseas and forest conservation and achieve CO absorption and2

fixation which outweighs GHG emissions from our production activities

GHG emissions from our production activities by improving the efficiency•Reduceof energy consumption and increasing the use of renewable energy•Reduce GHG emissions from the value chain by collaborating with our stakeholders

Management Strategy

Environmental
Action Program 2030
“Action on climate change”

reduction

Environmental Vision 2050

Business Strategy

70%

7,836 kt

What the Oji Group Aims For

GHG emissions

Action Program 2030,” which function as a milestone on the way to this Vision, in September 2020.

About the Oji Group

Net-Zero Carbon by 2050

carbon Society

Greenhouse gas (GHG) emissions
At least 70% or more reduction by FY2030 compared to FY2018*
Sustainability Strategy(At least 75% or more reduction by FY2030 compared to FY1990*)*Including absorption and fixation of CO2 by forests(1) Increasing CO2 absorption and fixation by forests through investment in forest conservation and plantation•Expansion overseas forest plantation area of 400,000 ha (Achieved 250,000 ha in FY2019).
•GHG storage of at least 170 million tons
(2) Improving in energy efficiency•Energy consumption intensity at least 1% per year for the 5-year average.

2018
Environmental Action
Program 2030
35

Oji Group Integrated Report 2021

2030
Please see here for more information
https://ojiholdings.disclosure.site/en/themes/150/

2050
Environmental Vision
2050

Please see here for more information
https://ojiholdings.disclosure.site/en/themes/191/

Oji Group Integrated Report 2021

Financial Data & Corporate Data

(3) Increasing in the usage of renewable energy•Renewable energy usage rate of at least 60% through reduction of coal consumption

36Special Feature (1)Action on Climate Change—Toward the Realization of a Low-carbon Society

The Oji Group’s Environmental Vision 2050, established to help us to achieve our target vision, sets out ourintention to aim toward net-zero carbon by FY2050. As a milestone on the way to this vision, we set the targetof reducing our GHG emissions*1 by 70% (as compared to FY2018 emissions of 7,836 kt) in our Environmental
The FY2030 reduction target comprises the GHG emissions reductions and the Net increment in carbon
stocks by forests*2 owned by the Oji Group and we have organized a project team to both draw up a roadmap
toward this goal and increase the likelihood of achieving our target.

2021

Improve energy Maintaining energy
efficiency
conservation

204

2.6%

Continue to reduce energy consumption by 1.0% or more per year, averaged over five years

Reducing coalconsumption
Increase thepercentage of Ceasing sales ofrenewable
fossil-fueled electricity
energy use
Installation of private
solar panels, etc.

508

6.5%

Technological research, development, investment decisions, installations

279

3.6%

Review, ceasing sales of electricity

60

0.7%

Installation planning, investment decisions, installations

Transform theMove toward business structurebusiness structure with low GHG emissions

516

6.6%

1,567

20%

Invest inforestry
conservationand treeplannting

GHG emissions reduction

2022

2023

2024

2025

2026

2027

2030

Installation ofequipment, operation

Emissions were reduced by 17% in FY2020, toward our target of a 70% reduction by FY2030 (including the Net increment in carbon stocks by forests). Progress toward our reduction target is at 24%.
Going forward, we will continue to actively pursue the reduction of GHG
emissions and increase of the net increment in carbon stocks by forests.

FY2020(kt-CO2e)8,000

Shift toward low GHG emissions business

6,000
Overseas
production
forests total
400,000 ha

3,918

5,485

50%

Search for sites,
land surveys

Assessment ofbusinessfeasibility

Considerationof acquisition,
decision

▲17%

7,460

6,525

4,000
2,000
0
-2,000

70%

7,836

-935
Emissions in FY2018(base year)

Emissions

Net GHG emissions

The net increment in carbon stocks by forests
Management Strategy

Total

2029

FY2020 Net GHG Emissions

Overseas
production
forests total
260,000 ha

Expanding forest
plantations

2028

Toward Achieving Our Targets

Financial Data & Corporate Data

Expanding the net increment in carbon stocks by Forests
The Oji Group owns a total of 580,000 ha of forest, comprising production forests totaling 190,000 ha in Japan and
260,000 ha overseas and conservation forests of 130,000 ha, and practices sustainable forest management. (➡ pp. 39–
40, 87–89)
As a result of our sustainable forest management, the net increment in carbon stocks by forests (our production forestsand conservation forests) was 935,000 tons- CO2 per year, while the actual carbon stocks in living biomass*3 reached
129,000 kt by the end of FY2020.
Annual CO2 absorption
Our Environmental Action Program 2030 (eswith growth: 9,507
tablished in September 2020) set out the target
kt- CO2 per yearof increasing the area of our forests by a further
The amount of
150,000 ha by FY2030.
carbon fixed by
The actual
annual tree growth is
We estimate that this will bring the net increcarbon stocks inconverted to CO2living biomass:
ment in carbon stocks by forests on up to the(tons).
129,000 kt- CO2
equivalent of approximately 50% of FY2018
Net CO2
GHG emissions. As of March 2021, preliminary
absorption:
935 kt- CO2
calculations suggest that the expenses associper year
Annual CO2 emissions
ated with expanding our forests by 150,000 hawith felling: 8,572 kt- CO2
will amount to approximately 100 billion yen.
per year

Sustainability Strategy

GHG Emissions Reduction
A key area for reducing emissions is the reduction of coal consumption. We own 16 coal-fired boilers in Japan and are examining the possibility of fuel conversion for 12 of these, not including boilers with low coal consumption and backup boilers.
In order to bring our coal consumption to zero by 2050, we plan to move forward with a switch to wood and other fuels, modification of our coal-fired power generators with aview to prospective co-firing with hydrogen or ammonia,
and installation of private solar panels by the interim pointof FY2030.
We will also strive to achieve our target of reducing
GHG emissions by 20% (as compared to FY2018) throughongoing, thorough energy conservation measures and ashift toward a business structure with low GHG emissions.
Further, we will continue our efforts to contribute to lowering third-party GHG emissions by providing renewableenergy through biomass power generation, hydroelectric
power generation, and other forms of production from renewable sources.

Business Strategy

GHG
reduction

What the Oji Group Aims For

GHG
reduction(kt-CO2e)

Subtotal

The net increment incarbon stocks by forests*2 The net increment in carbon stocks by forests = CO2 absorbed per year with the growth of trees − CO2 emissions per year with felling.

Sub-category

Category*1 Scope 1 (direct emissions from fuel combustion) + Scope 2 (indirect emissions from the purchase of electricity and heat)

About the Oji Group

Action Program 2030 in September 2020.

*3 The CO2 stocks in Oji’s 580,000 ha of forest†For details, see ESG Data/Environment/Table 20 ➡ https://ojiholdings.disclosure.site/en/themes/116/

Biomass power generation facility scheduled to begin operating in September 2022

37

Oji Group Integrated Report 2021

Figures for CO2 absorption and fixation by forests and GHG emissions are for consolidated companies.

Oji Group Integrated Report 2021

38

Sustainable Forest Resources

Special Feature (2)Oji Forests

Production forests Conservation forests* In pursuit of sustainable forest management, a third-party organization
certifies forests after examining whether they are managed in good condition according to the standard. The certification covers all types of forest, including production forests and conservation forests. e.g.: FSC™
(FSC™C016623, etc.) and PEFC, etc.

(1,000 ha)(1,000 ha)

Total(1,000 ha)

1973

144

105

249

Pan Pac

1971

35

5

40

SPFL

1992

9

3

12

Oji FS

2014

6

0

6

Indonesia

KTH

1998

39

12

51

Vietnam

QPFL

1995

9

1

10

—

16

3

19

258

129

387

1945

188

0

188

446

129

575

Overseas subtotal
Company-owned forests in Japan
Group total—

Production forests: forests primarily for producing forest products in consideration of environmental conservation.
Conservation forests: forests primarily for environmental conservation, including protecting
biodiversity and basins.

39

Oji Group Integrated Report 2021

190,000 ha in Japan
260,000 ha overseas

an important issue for the paper-making industry since thattime.
Within this context, Oji Zorin was established in 1937. The
company initiated a resource recycling loop in order to guarantee steady supplies of raw materials for the future. The
practice of cultivating our own resources has since been
passed down through each generation of the company, andin the 1990s we took the lead among our competitors in starting our overseas forest plantation business. Today, we possess the largest area of company-owned forest of any
Japanese private business.

CENIBRA

Other (4 companies in Vietnam, Australia and China)ha

Rubeshibe company-owned forest in Hokkaido

Pan Pac’s forest plantation, New ZealandInitiatives in Japan
Our company-owned forests in Japan total approximately 650
sites across the country, from Hokkaido to Kyushu, amounting
to an area of approximately 190,000 ha. We plant fir, larch andEzo spruce, among other species, in Hokkaido, and grows
Japanese cedar and cypress in Honshu and southward. It
takes over 60 years to harvest these trees. The harvested trees
are processed into lumber and the residuals are used as raw
materials for paper and wood-based fuel. The Oji Group establishes collaborative relationships between people engaged
in company forest management and users of lumber in eachgeographical region, and provides lumber, plywood, raw materials for paper, wood-based fuels, and other wood products
to companies both inside and outside the Group. In this andother ways, we strives to revitalize Japan’s forestry industry
and ensure a stable supply of domestic lumber.

Initiatives Overseas
Our forest plantation business spans ten regions within a totalof six countries, and we maintain and manage forests amounting to an area of approximately 390,000 ha, including conservation forests. We select species and growing methods suited
to the climate and natural conditions of each region. For example, we grow hardwoods such as eucalyptus and acacia(harvestable in around 10 years), and softwoods such as radiata pine (harvestable in around 30 years). Hardwood is mainly
used for pulp. Thinned softwood is used for pulp, while harvested softwood is used for lumber production. In cooperation
with various local experts, including subcontractors, we workthrough a sequence of tasks, including raising seedlings,
planting, silviculture, and harvesting.

Contribution to the Local Environment, Economy, and Society
Sustainable forest management requires a mutual understanding between forest plantation business operators andthe local community. Also indispensable is their sharing of environmental, economic, and social benefits. To give an example of economic benefits, our overseas forest plantationcompanies have created over 14,000 jobs locally. Another such
example is our technical training on planting and forest management provided to owners of small-scale forests. Further,
we cooperate with local governments, NGOs, and civic groups
in each region to create and share environmental and social
benefits. Their activities include biodiversity conservation programs in environmentally protected forests, vocational andeducational support in local communities, and medical assistance in areas that have poor access to medical services.

CENIBRA in Brazil: Production forest (left) and conservation
forest (right)

Financial Data & Corporate Data

New Zealandha

Sustainability Strategy

Brazil

450,000 130,000

Management Strategy

Initiatives for Sustainable Forest Management
We practice sustainable forest management in our production
forests, planting, tending, and harvesting our trees, thenre-planting. In addition, we actively utilize forest certification
programs* to implement appropriate forest management thatconsiders the environment, society, and the economy, including for conservation forests. The forest certification acquisition
rates in FY2020 were 91% for overseas forest plantations and100% for company-owned forests in Japan.

Company Established

Conservation forests

Initiatives in Japan and Overseas

The Oji Group and Forestation
The Oji Group originated with “Paper manufacturing company,” founded in 1873. At that time, the company used cottonrags collected from urban areas to manufacture paper. In
1889, in order to respond to the rapidly increasing demand for
paper that was accompanying the progress of civilization, thecompany built a new plant in the Tenryu River basin, in what is
now Shizuoka Prefecture, and began paper production
using pulp from wood. In 1910, seeking to further guarantee a
steady supply of raw materials, the company opened a newplant in Tomakomai, Hokkaido (today’s Oji Paper TomakomaiMill). Securing supplies of wood, our raw material, has beenCountry

Production forests

ha

Business Strategy

The Oji Group and Forestation

580,000

What the Oji Group Aims For

The Oji Group possesses extensive company-owned forests in Japan and overseas, amounting to approximately 580,000 ha. The portfolio comprises about 450,000 ha of production forests primarily for producing
forest products in consideration of environment, and about 130,000 ha of conservation forests principally forpreserving biodiversity and basins.
When we began our forest plantation business, our goal was to secure a steady supply of raw materials for
manufacturing paper. However, changing times have led to a reevaluation of forests as a sustainable resource,
and various sectors are taking an interest in the utilization of this resource. In addition, recent years have seen
many hopes pinned to forest “functions,” including not only their role as a “resource,” but also in conserving
national land and living environments, replenishing water sources, protecting biodiversity, and absorbing andfixing carbon dioxide.
Alongside practicing sustainable forest management with a direct connection to our business, the Oji Groupwill continue to take steps toward the realization of a carbon-free society, increasing the value of forest resources and aiming to further expand our company-owned forests.

About the Oji Group

Sustainable Forest Management

Supporting beekeeping at CENIBRAOji Group Integrated Report 2021

40

Special Feature (3)Promotion of Innovation

Value Creation by the Innovation Promotion Division

We accelerate the promotion of innovation.

—Continuing to Develop Eco-friendly Products—

Muraji Nishi
What the Oji Group Aims For

Green Innovation Oji is Aiming for

The Innovation Promotion Division is responsible for one of the three pillars of the
mid-term management plan, “Promotion of Innovation”. Accordingly, our task is thedevelopment of unique new materials and the provision of new solutions.
Based on the technologies acquired in the conventional pulp and paper business,
we are developing wood-derived biomass plastics, cellulose nanofibers (CNF), andpharmaceutical raw materials as unique new materials. Additionally, we are taking on
the challenge of efforts to apply new materials by replacing petrochemical-derived
films with biomass-derived films.
Furthermore, by providing products and services that meet the needs of the times
such as the liquid packaging carton business, next-generation packaging solutions,and water treatment business, we are promoting a business structure that goes beyond our conventional boundaries and providing new value as new solutions.
Through these efforts, we will contribute to a sustainable society, while strengthening
the profitability of our domestic business and expanding our overseas business.

About the Oji GroupThe Innovation Promotion Division creates innovations by refining cutting-edge technologies based on a range ofcore technologies accumulated from paper manufacturing and forestation, which are the roots of our founding.
To contribute to solving global issues such as climate change and marine plastic waste, we will continue to act as
an incubator for commercialization, nurturing new themes and creating innovative value in order to help build a sustainable society.

General Manager, Innovation
Promotion Division
Oji Holdings Corporation
Corporate Officer

1 Development of eco-friendly To help solve social issues such as climate change and the problem of marine plastic litter.

materials and products➡ P43, 44

Eco-friendly materials and products

3 Total solution

Aiming for contribution to industrial development by understanding needs and seeds.
➡ P46

Biodegradable
materials

CNF

Wood-derived
biomass plastic

Non-petroleum
based films
Biomass plastic films(Cellulose nanofiber)

Medical field

Multibarrier
paper
Cell culture
substrates forcontrolled cellorientation

Pulp moldproductOji Group Integrated Report 2021

Coating technology
Lamination technology
Paper manufacturing technology

Dissolving pulp
Paper pulp

Packaging paper
Printing paper and newsprint
Functional paper
Paperboard
Specialty paper

OJI FLEX PACK’AGE

Sheeting technology
Corrugated container
manufacturing technology
Convertedpaper

Nano-fibrillation technology
Water treatment technology
Precise pulp-molding technology
Fibrillation and mixing technology
Paper

Pulp

Raw wood

41

Cellulose
Hemicellulose
Cellulose-derived
sugar solution

LiquidpackagingcartonFolding cartons
Paper bags
Corrugated containers
Household paper
Disposable diapers

Biomass plastic films
Wood-derived biomass plastic
Sulfated hemicellulose for pharmaceutical use
Cell culture substrates for controlled cell orientation
Functional films for industrial use
Condenser films
Functional non-woven fabricCellulose nanofiberSpecial adhesive products
High-function optical adhesive products

Fermentation and polymerization technology
Chemical synthesis technology
Film forming technology
Non-woven fabric making technology
Adhesive processing technology
Nano-dot array technology
Oji Group Integrated Report 2021

Financial Data & Corporate Data

Refining technologies
Enzyme reaction technology
Forest tree breeding technology

Water
treatment

AutomatedpackagingsystemSustainability Strategy

Medicinal
plantsTotal solution

Management Strategy

Cellulose
composites

Wood-derived
pharmaceuticalproducts

Business Strategy

Utilizing our knowledge and know-how for medical care of the future. ➡ P45

Contribution to a Sustainable Society

2 Entry into medical field

42

Special Feature (3)Promotion of Innovation

CNF (Cellulose Nanofiber)

Wood-derived Biomass Plastic

Cellulose nanofiber (CNF) is a wood fiber that has been produced by fibrillated into a nanometer order. (1nm =0.000001mm)

Infinite possibilities of CNF, customizable according to the application
We can provide optimal CNF products by customizing their fiber sizes and forms, according to the customer’s requirements.

Form* 2019 Demonstration Project for a Plastic Resource Circulation System toward a Decarbonized Society

Digestion

Sugar solution
Enzymatic
degradation

Lactic acid

Polymerization

Fermentation

Polyethylene

PowderViscosity, thixotropy

Strength, dimensional stability
Flexibility

Dispersion in variousorganic solvents

Coarse CNF
Pulp
Physical properties

Development of Biomass Plastic Films

Possible applications

The Oji Group is working to develop biomass plastic films withthe processing technology for polypropylene films, cultivatedthrough the manufacture of thin films for capacitors.
Replacing the conventional plastic films,which are essential
to our daily lives, with the recycling-based materials will havea major impact on solving environmental problems.
In the future, Oji will produce wood-derived biomass plastics and integrate all stages from raw materials through toprocessing.

We are utilizing the characteristics of the material in various forms, promoting its practical application in a wide range of fields.
On construction sites

In sports products

In cosmetics

For lightening cars (under development)

Concrete pump primer“RUBURI”
TAKEcite Co., Ltd.

Table tennis rackets using our
AUROVEIL LS
Darker Co., Ltd.

An example of cosmetics using our
AUROVISCO CS

CNF reinforced polycarbonate
resin for composite use (carwindow application)

Cellulose Composites (of Biodegradable Plastic and Pulp)

Multibarrier Paper SILBIO BARRIER

Aqueous coated cups and lids are made of the Oji Group’sbase paper that does not include laminated film. Recycling,which was difficult with previous products, is now possible.
Using the cup and lid as a set eliminates the need for sortingat the time of collection and recycling.

We are developing cellulose composites which have improved
their properties such as strength and rigidity by mixing cellulose (pulp) into biodegradable plastic.
Pulp is 100% biomass-derived and has excellent biodegradability. Therefore, this is best as a way to strengthen biodegradable plastic.

SILBIO BARRIER is a recyclable paper material and a functional paper material with high barrier properties to replace
plastic film. It is oxygen-and water vapor-impermeable, andretains aroma and moisture.
It is also impervious to oil, and can be disposed of as paper. This multibarrier paper is recommended as a packaging
for products with strong scents such as coffee and soap.

Received iF DESIGN AWARDOji Group Integrated Report 2021

Financial Data & Corporate Data

Aqueous Coated Cups and Lids

This paper packaging can clearly show curved surfaces. Even
containers with complex shapes can be created seamlessly.
PaPiPress offers smoother products than conventional pulp
molds, and uses a high-temperature, high-humidity press toprovide lids and other products with high fittability.

Sustainability Strategy

PaPiPress—New Molded Pulp Product

Oji Group Integrated Report 2021

Management Strategy

Provided technology to CNF reinforced
resin glass exhibited by Toyota Motor East
Japan Inc, at Tokyo Motor Show 2019.

Biomass plastic films

43

Business Strategy

Ethanol

Dehydration &polymerization

Polylactic
acid

Fiber size

Pulp

Continuous sheet

Transparent CNF

Producing wood-derived biomass plastics to move away from petrochemical-derived plastics
Wood

SlurryWhat the Oji Group Aims For

Additionally, this project has been adopted as a commissioned project by the Ministry of the Environment. Using wood
pulp-derived sugar solution, we produce lactic acid and ethanol, and are working on demonstrating production of polylactic acid and polyethylene.
We are studying how to use this biomass plastic to manufacture biomass plastic films, with the aim of moving awayfrom petrochemical-derived plastics.

The Oji Group has been considering manufacturing wood-derived biomass plastic. Unlike conventional plastics made frompetroleum resources, the wood-derived biomass plastic cansignificantly contribute to the reduction of CO2 emissions fromfossil fuel into the atmosphere.
The raw material for biomass plastics is sugar, which has
been produced from edible raw materials such as sugar caneand corn. However, by producing sugars from wood which isinedible, biomass plastics can be produced without causing a
global food supply shortage problem.

CNF is expected to be applied in many fields as the material with high quality such as transparency, lightweight, durable, resistant to deformation, and high viscosity.

About the Oji Group

Development of Eco-friendly Materials and Products

44Promotion of Innovation

Total solution

Wood-derived pharmaceutical products

Automated Packaging System —OJI FLEX PACK’AGE, a next-generation packaging solution—(hydrolyzed xylan)

Sulfated hemicellulose
Chemical
synthesis

Acidic hemicellulose

Applied to cosmetics

Developed for use in pharmaceutical products
Therapeutic agents for osteoarthritis/Blood anticoagulants

Hemicellulose

20%
50%

30%

LigninCellulose

Wood components

Establishment of Oji Pharma Co., Ltd.
In April 2020, we established Oji Pharma Co., Ltd., as a subsidiary that takes charge of the medical and healthcare field of
our business. The new company is promoting the development to utilize wood fiber components as active pharmaceuticalcomponents together with domestic and overseas pharmaceutical companies and universities.

Faced with packaging and logistics issues in the wake of rapid
expansion of e-commerce market, the Oji Group has put together the technologies and know-how of packaging materials
and packaging machines cultivated over many years, andstarted to provide “OJI FLEX PACK’AGE,” a next-generation
packaging solution that enables packaging based on the sizeof the products. The system, which allows its users to preparea corrugated box that fits the product perfectly, offers different
solutions to meet a variety of needs: a 3-sided variable

system, which uses our fanfold corrugated sheets Rakudan,
and a variable height automatic sealing system, which uses
standard-sized corrugated box. Introduction of OJI FLEXPACK’AGE helps realize resource saving (corrugated containers and packaging materials), cost saving (improving work efficiency and solving the labor shortage issue throughautomation), and energy saving (reduction of transportation
costs due to improvement in loading efficiency) at once.

Automated packaging system
Rakudan, fanfold
corrugated sheets

Packagingproducts inperfect-sized
containers

Medicinal Plants—Japan’s first large-scale cultivation of licorice—
Next-generation packaging solution

Create, label, and pack perfectly sized corrugated containers.

Liquid Paper Containers Business —Integrated domestic production system for beverage packages and overseas expansion—

Establishment of Oji Medicinal Plants Laboratory Co., Ltd.
In May 2021, we established Oji Medicinal Plants Laboratory Co., Ltd., and started production and sales of medicinal plants.
We will first carry out planned cultivation in the Hokkaido area targeting the stable supply of high-quality domestic licorice,
making business proposals for pharmaceuticals, food, and cosmetics.

Patterned substrate(Nano-dot array technology)

ND Cell Aligner Dish 35(A 35-mm dish culture substrate withfine structure at the bottom surface)FlatregionNano-pillar
regionOji Group Integrated Report 2021

Pulp

Polyethylene

Lamination
Paper
makingBase paper

Folding cartons

Converting

Water Treatment Business
The Oji Group provides customers in and outside Japan withwater treatment systems that meet a wide range of needs,
based on the paper manufacturing technologies, and thetechnologies and operational expertise for water production
and wastewater treatment, which have been accumulated
since the founding. Based on investigation from various
standpoints, we design and build optimal equipment from a

broad viewpoint, and maintain and manage it for the purposeof stable operation including remote operation and trouble
prevention. In this way, we propose appropriate water quality
management solutions from a holistic perspective.
We aim to realize a sustainable society by providing stablewater treatment technologies and making effective use of limited water resources.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Flat surface substrate
Fluorescent staining: α-Actinin

Cardiomyocyte cells are oriented
along the stripe direction

Orientation
direction

Examples of cell culturing (Culturing cardiomyocytes differentiated from iPS cells (human))

Laminated paper
for paper packaging

Integrated domestic production system ranging from pulp to liquid paper packaging
パルプから液体紙容器までの国内一貫生産システム

Flat regions and substrate pillars are interleaved in parallel stripes.

45

supply chain dependent on overseas sources.
In addition to manufacturing paper packaging in Japan, we
provide flexible solution to meet customer needs through anentire service by selling and maintaining machines that fill paper packaging with beverages.
In the future, we will expand the business outside in Japanby utilizing our overseas infrastructure, where demand is expected.

Sustainability Strategy

The Oji Group is using the nano-dot array technology that creates nano-level fine structures to develop a range of applications in the fields of life sciences and optics. With thistechnology, we have developed the ND Cell Aligner cell culture
substrates that have nano-pillar and flat regions interleaved inparallel stripes.
Cultivating cells such as cardiomyocytes on this substrateenables reproduction of cell orientation similar to that of intravital (in vivo), despite the cells being in a culture vessel (in vitro). These cultivated cells are expected to exhibit bioactivity
similar to that in vivo, and therefore are expected to be usedin pharmaceutical development and regenerative medicines.
At present, we are conducting joint research with Juntendo
University.

The Oji Group has utilized its core paper manufacturing andvarious converting technologies and established Ishizuka-Oji
Paper Packaging Co., Ltd. in collaboration with Ishizuka GlassCO., LTD., a comprehensive packaging manufacturer, to enter
the liquid paper packaging business. This enables the construction of an integrated domestic production system ranging
from pulp to liquid paper packaging. This leeds to not only
further efforts towards safety and security with advanced
quality control but also stable supply by freeing ourselves of aManagement Strategy

Domestic large-scale cultivated field of licorice

ND Cell Aligner—cell culture substrates forcontrolled cell orientation

Business Strategy

Licorice, which is used in many Chinese herbal medicines, ismostly imported from abroad, and domestic production is required due to fears of resource depletion in exporting countries and export restrictions. The Oji Group is applying its
forest tree breeding technology to develop cultivation techniques within Japan, and has succeeded in conducting ademonstration test at our farm. We established the mechanization technology necessary to increase the scale of the business and are now proceeding with large-scale cultivation.

What the Oji Group Aims For

Hemicellulose is one of the major wood fiber components.
Hemicellulose extracted and refined through the Oji Group’s
unique technology, called hydrolyzed xylan, is used as a cosmetic ingredient. We have also developed sulfated hemicellulose, which is a chemically modified hemicellulose, with theaim of further increasing the added value of the wood fiber
component. Sulfated hemicellulose is anticipated to have theeffects of suppressing inflammation of joints and the bladderas well as blood coagulation.

About the Oji Group

Entry into Medical Field

Delivered to various beverage companies

Special Feature (3)46Household and Industrial Materials Businesses

We aim to be a “lifestyle and social
support enterprise” that contributes
to the prosperity of society byproviding materials and technologies
that are closely tied to people’s
day-to-day lives.

President, Household and Consumer Products COMPANY
President, Industrial Materials COMPANY
Senior Executive Officer
Oji Holdings Corporation

billionOperating Profit

billionChanges in Net Sales and Operating Profit■ Net sales (¥bil.) ■ Operating profit (¥bil.)
681.2

651.3

686.1

40.9

647.5
38.1

700.0

31.0

22.4
5.4
FY2017FY2018FY2019FY2020

FY2021 Planned

What the Oji Group Aims For

Yoshiki Koseki

Net Sales%

Segment Overview
In FY2020, the Household and Industrial Materials Businesses had
net sales of 647.5 billion yen (down 38.6 billion yen from FY2019)and operating profit of 38.1 billion yen (down 2.8 billion yen from
FY2019). Due to stay-home trend under the COVID-19 pandemic,
there was strong demand for corrugated containers for processedfood products and online shopping domestically. Also, while someproducts such as kitchen towels, wet wipes, and face masks saw
a jump in sales because of a change in lifestyles, overall sales
and profits dropped as a result of the significant impact of restrictions on economic activity both in Japan and overseas.
In FY2021, net sales of 700.0 billion yen (up 52.5 billion yen
from FY2020) and operating profit of 31.0 billion yen (down 7.1
billion yen from FY2020) are planned.

About the Oji Group

40.8¥647.5¥38.1

Net Sales Composition Ratio

Business Strategy
Management Strategy

Industrial Materials Business[Corrugated container business]
As well as corrugated containers used in foodstuffs, daily products, electronics, and other areas, we also offer heavy-duty packaging materials
used for transporting mainly industrial parts. We
also provide automatic packaging systems adjusting the packaging dimension in order to fit
each product size inside.

[Paper bag business]
We handle a wide range of customer needs—fromheavy-duty sacks for packaging used for safe andsecure transport of various products, through to paper bags that are used for packaging of retail products and also play a role in sales promotions, andbags for home delivery, which are seeing increased
demand given the growth in online shopping.

Oji Group Integrated Report 2021

Morishigyo Chiba Plant

Business Strategy Profitability Improvement of Domestic Business
Domestic demand for corrugated containers is steadyeven during the COVID-19 pandemic, with growth especially expected in the Kanto region. To strengthen ourbusiness base in the Kanto region, we made the decision
to relocate and construct a new corrugated container
plant within the premises of our containerboard mill in Utsunomiya City, Tochigi Prefecture (scheduled to start operation in October 2022), following the plant in Funabashi
City, Chiba Prefecture, which started commercial production in July 2020.
Having an integrated plant for processing the basepaper for making corrugated containers means we havein place a system that can supply higher quality products
in a sustainable and efficient manner, thereby contributing

to the local economy and society.
At the same time, as part of its initiatives to restructure
manufacturing in response to structural changes in domestic demand, we completed modifications of the Oji
Paper Tomakomai Mill newsprint production facilities forthe production of containerboard and kraft paper, andstarted trial operation in June 2021. In order to handle theincreased domestic and overseas demand for containerboard, we are moving ahead with further quality improvements and sales expansion.
To further reinforce earnings bases through the integration of material and converting, a range of investments
will be made for the optimization of the domestic business structure.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

[Folding carton business]
For folding cartons used in a range of fields including confectionaries, cosmetics, and pharmaceuticals, we are combining aesthetically pleasingbase paper with structural design tailored to theapplication and appealing graphics, thereby further enhancing the value of our customers’ products.

Sustainability Strategy

47

Business Overview
The Industrial Materials Business has production
and sales structures that integrate material and converting from base paper manufacturing to productprocessing and packaging design for the packaging
materials that are essential to industry such as corrugated containers, folding cartons, and paper bags
and responds in a timely manner to customer needs.

48

Household and Industrial Materials Businesses

Main Overseas Sites
About the Oji Group● Thailand
・ Corrugated containers: 1 /● India

Corrugated containers & folding cartons: 2

・ Corrugated containers: 4

New corrugated container plant in Indonesia● Vietnam ・ Corrugated containers: 6* /Folding cartons: 1 / Paper bags :2

New corrugated container plant in Christchurch (rendering of completed plant)

2● Myanmar
・ Corrugated containers: 1 /Flexible packaging: 1★ New corrugated container plantin the south (2022–)● Malaysia
1・ Containerboard: 2 / Corrugated containers: 10* /Plastic bags: 1

Voice

We have been striving hard for the completion of construction and installation,
coping with lockdowns and movement control orders.
This is significant investment for us, increasing annual capacity of containerboard production up to 750,000 tons 2.5 times bigger than before. GSPP keeps
contribution to Oji group’s integrated business expansion by maximizing thebenefit of group-wide preparation for PM3, including raw material securement,
pre-sales, recruitment and training.

● Indonesia· Corrugated containers: 1★ New corrugated container plant in Bekasi (2021–)

Sia Boon Soon

*1: Including 2 sites underconstruction*2: Including 1 site underconstruction● New Zealand· Containerboard: 2 / Fiberboard: 1 /Corrugated containers: 3 /Paper bags: 1★Newconstruction&
relocationofChristchurch
corrugatedcontainerplants(2021–)Oji Group Integrated Report 2021

Given the rapid expansion of the online shopping market
and the investigation of labor-saving measures in various
industries, Oji Group is bringing together its packaging
materials, technologies, and know-how gained over many
years to work with customers on solving issues with packaging and logistics. Adding new concepts to structural design has led to the development of groundbreaking new
products. These include corrugated containers for

assembly packaging that, by changing their shape, lead tolabor-saving in packaging and considerable reduction ofplastic materials, as well as easy-to-open corrugated containers incorporating zippers and creases that significantly
reduce the time required for displaying products in stores.
These efforts have been recognized by a number of packaging awards, including the WorldStar Global Packaging
Awards and the Japan Packaging Contest.

Financial Data & Corporate Data49

stay-home trend. These are all leading to a continuous
increase in demand for packaging, and thus we will actively increase our corrugated container business. New
corrugated container plants started operation in Indonesia in March 2021 (our first plant in the country) and will
start in October 2021 in New Zealand (scheduled), andwe are also constructing three new plants—two in Malaysia, and one in Vietnam.
With monitoring risk and return carefully in each region/market, we will further expand our business by wayof new plant starting-up from greenfield and/or M&A activities.

Business Strategy Promotion of Innovation

Sustainability Strategy

Business Strategy Expansion of Overseas BusinessPresident
GSPP

Management Strategy● Australia· Corrugated containers: 4

To meet the increasing demand for packaging in various
regions, we own a total of 47 manufacturing bases in 9 countries throughout Southeast Asia, India, and Oceania, andwe are developing our business in the countries.
Up until now, we have been expanding our businesswith a focus on expanding and strengthening our corrugated container business. However, our new facility for
manufacturing containerboard is planned to start operation in Malaysia soon, significantly bumping up the annual
capacity from 300,000 tons to 750,000 tons. This will
enable development of an integrated base paper andconverting business even in overseas, further strengthening our business foundation.
Meanwhile, the recent COVID-19 pandemic has resulted in more demand of hygiene product due to its increased awareness, online shopping and furniture underBusiness Strategy★ Capacity enhancement of containerboard· Installing the third line at GSPP (annual production will
increase from 300,000 tons to 750,000 tons)· Upgrading energy and other infrastructure facilities toimprove cost competitiveness★ New corrugated container plant in Johor (2022–)★ New corrugated container plant in Selangor (2022–)

A new containerboard machine (PM3) begins operation

What the Oji Group Aims For● Cambodia
・ Corrugated containers: 3

Products awarded in the WorldStar Global Packaging Awards 2021 and Japan Packaging Contest 2020
Left: Suzuki Motor Corporation
Center: Nissin Foods Holdings Co., Ltd.
Right: Daikin Industries, Ltd.

Oji Group Integrated Report 2021

50

Main Overseas Sites

Household and Industrial Materials Businesses

Household and Consumer Products Business⃝ China (household paper base paper)
・Jiangsu Oji Paper Co., Ltd.
Expand exports to China(disposable diapers)

Business Overview

Import household

ture, comfort, and functionality. Environmental quality as in forest conservation such as

nepia Quality

paper base paper

TMfrom China

the adoption of FSC certified paper. Social quality as in aligning with customers’ hope
Quality of life

Environmental
qualitySocial quality

nepia aims for No.1 inthree quality domains.

and contributing to the society through actions such as taking CSR initiatives. In the pur-Expand sales to Southeast Asia and thesuit of these three quality domains, Oji Nepia is producing tissue paper, toilet rolls, dis-

Middle East regions (disposable diapers)

Establishment: October 2007

⃝ Malaysia (disposable baby diapers)・People & Grit
Location: Selangor, Malaysia
Share acquisition: January 2015
・Oji Asia Household Product
Location: Selangor, Malaysia

About the Oji GroupWe own the household paper brand ‘nepia’. Quality of life as in the seeking of good tex-

Location: Nantong City, China

Operation commencement: April 2016

posable diapers, and other products indispensable in our daily lives. (FSCTM C018118)(Manufacturing Joint Venture)
・PT Indo Oji Sukses Pratama(Sales Joint Venture)
Location: Jakarta, Indonesia
Establishment: January 2015

Sell in the Indonesia market(disposable diapers)

nepia PremiumSoft Tissues

nepia Hana Celeb
Hana Celeb
Three Packs©Yanase/F·T·N

nepia Genki! Pants

Business Strategy

nepia PremiumSoft Toilet Rolls

事業戦略
Business
Strategy Promotion of Innovation

Business Strategy Expansion of Overseas BusinessIn our household paper business, we are responding tomarket trends such as by producing extra long toilet rolls
at the Edogawa Mill, which started commercial production in the fall of 2020. We will also build a new warehouse within the mill scheduled for completion in the fallof 2022, thereby streamlining logistics. Additionally, ourHana Celeb moisturizing tissues were awarded the Grand
Prize at the Japan Naming Award 2020. We will continue
to work to be a brand well-loved by customers.
In our disposable diaper business, as well as boostingsales of nepia Genki! baby diapers, we are also working
to increase our market share of disposable adult diapers.
As we look towards the time when the second baby
boomers reach young-old age, we will build a new processing machine at our Fukushima Mill with the commencement of production scheduled for the fall of 2022.

The Household and Consumer Products COMPANY will
promote business expansion in Southeast Asia and China,
where consumption of baby diapers is expected to grow,and work to enhance both production and sales.
In Malaysia, through the integration of production bases
and scrap-and-build, the capacity boosting setup werecompleted in April 2021, and in Indonesia, which has thelargest population in the region, we will continue to increase
the production capacity of our factory that has been operating from January 2020, in order to respond to the increading
demand. In China, we actively promote e-commerce to explore new customers, whereby continuing to expand sales
through the export of “made in Japan” products.
In addition to the export of products made in Malaysia,
we will also expand supply of high-quality “made in Japan”
products such as Genki! and Whito to other Southeast
Asian countries, whereby actively exploring new target
countries.

with marine life, and encapsulates the message that purchasing this product helps to protect the ocean.

ESG and SDGs Topics
Response to COVID-19 pandemic
Nepia Long Lasting Best Fit Face Mask
New Tac Kasei Yamamoto Mill has renovated its cleanroom, and has been producing
Nepia Long Lasting Best Fit Face Masks since July 2020.
In January 2021, we developed a new product, the Nepia Long Lasting Best Fit Face
Mask Block Filter Plus that blocks 99% of virus droplets.
These masks are “All Made in Japan,” from materials procurement to processing, andfrom the wire around the nose to the ear straps.

Financial Data & Corporate Data

Business Strategy Profitability Improvement of Domestic Business

Oji Group Integrated Report 2021

Indonesia Millnepi eco

Sustainability Strategy

Malaysia MillManagement Strategy

51

Edogawa MillOji Nepia was the first manufacturer in the industry to use
FSCTM certified paper, and we are taking measures forthe reduction of environmental burden, such as using
biomass ink when printing product packages. We have,
however, long held concerns regarding the plastic film
used for packaging toilet rolls and other products. Plastic
films, manufactured from petrochemicals, do not break
down in nature, and plastic waste that reaches theoceans has become a global issue. To combat this issue,
the Oji Group has combined its efforts to create “nepieco.”The package design features an attractive blue color
scheme that evokes the beauty of the ocean together

What the Oji Group Aims For⃝ Indonesia (disposable baby diapers)
・PT Oji Indo Makmur Perkasa

Oji Group Integrated Report 2021

52

Functional Materials Business

Net Sales

Operating Profit

billionChanges in Net Sales and Operating Profit■ Net sales (¥bil.) ■ Operating profit (¥bil.)

220.8
18.6

224.1
18.4

Shigeki Aoki
President, Functional Materials COMPANY
Executive Officer
Oji Holdings Corporation

billion

214.7
15.4

182.3
11.5

FY2017FY2018FY2019FY2020179.0
10.0

FY2021 Planned

Eco Marine Tac™ (Oji Tac)

Specialty Papers Business
The Specialty Papers Business has a lineup of
products with advanced special functions such as
electrical material paper including insulation materials, dry pulp non-woven fabric, and glass paper.
Production of pressboards will be consolidated at
Oji F-Tex from October 2021 through the transferof the business from Mitsubishi Paper Mills.

Adhesive Products Business
Using proprietary adhesive force control technology,
the Adhesive Products Business handles from familiar
products like various labels, adhesive tape for packaging, and wound dressings to less familiar, special applications like aluminum tape for construction material
and forgery prevention tape. We are also focusing on
the development of biodegradable film sticker.

Management Strategy

Glass paper (Oji F-Tex)

The Functional Materials Business provides a variety of different products to the automotive industry, as well as electronics materials, environmental and medical domains, based oncore technologies such as papermaking, converting (functional and adhesive coatings), film forming and non-woven
fabric. Furthermore, the continuing review of manufacturingsystems increases competitiveness and profitability, and so
the Functional Materials Business will continue to engage inthe swift development of high-function and high-value-added
products, fusing core technologies and new materials.
At the Oji F-Tex Shiga Mill, we have built new production
facilities for biaxially oriented polypropylenefilm (OPP) mainly
used in capacitors in electric vehicles, and after the facilities
start operation in 2023, the capacity is expected to be 1.6
times higher than the current capacity.

Business Strategy

Business Strategy Profitability Improvement of Domestic Business

The Oji F-Tex Shiga Mill

Sustainability Strategy

ESG and SDGs Topics
Film used in capacitors (Oji F-Tex)

Imaging Media BusinessWith diverse coating technologies such as thermal
and inkjet technologies, the Imaging Media Businessboasts a top class global market share, developing
products that meet diverse industries’ customer
needs. Production and sales operations for carbonless paper have been consolidated into Mitsubishi
Paper Mills, aiming to strengthen competitiveness.

Film Business
Films for capacitors are used as an essential material in
the power supply units of electric vehicles, and the Oji
Group is refining development of these based upon its
thin film technology that produces the world’s thinnest
films. The Film Business also offers optical double-sided adhesive films and hard-coated films that are seeing
growth due to their use in precision devices.

As the world aims to achieve a decarbonized society, it is shifting toelectric vehicles, and a corresponding jump in demand for OPP for capacitors is expected. There have been needs for thinner OPP for capacitors, but at the same time the films also need higher levels of insulation
to withstand high voltages and currents so that they can achieve higher
power. Oji F-Tex has a long track record in this field. The company has
unique technologies that achieve thin films and high insulation at a highlevel, and boasts a stable supply capability.
Additionally, together with the Advanced Film Research Center of Oji
Holdings’ Innovation Promotion Division, we are tackling the development of biomass plastic films that are based on OPP film-forming technologies.

Financial Data & Corporate Data

Thermal papers (Oji Imaging Media)

What the Oji Group Aims For

By anticipating market needs
and rapidly providing products
and services that exceed
customer expectations, we
aim to be the company
chosen by our customers.

%

Segment Overview
In FY2020, the Functional Materials Business had net sales of
182.3 billion yen (down 32.4 billion yen from FY2019) and operating profit of 11.5 billion yen (down 3.9 billion yen from FY2019).
In the midst of the ongoing impact of the COVID-19 pandemic, we
saw a recovery trend in films for capacitors for electric vehicles
and paper used in the manufacturing process of electronic components for smartphones. However, sales dropped because of reduced numbers of tourists visiting Japan and of events, and ouroverseas business was also impacted by stay-home trend and astagnation in economic activity, leading to an overall decrease inboth sales and profits.
In FY2021, net sales of 179.0 billion yen (down 3.3 billion yen
from FY2020) and operating profit of 10.0 billion yen (down 1.5
billion yen from FY2020) are planned.

About the Oji Group

11.5¥182.3¥11.5

Net Sales Composition Ratio

Advanced Film Research Center (within the Oji F-Tex Shiga Mill)53

Oji Group Integrated Report 2021

Oji Group Integrated Report 2021

54

Functional Materials BusinessBusiness Strategy Expansion of Overseas BusinessWe are proud that these new technologies will bringus a new opportunity on the 10th anniversary as amember of the Oji group.

Oji Papéis Especiais

Business Strategy

In 2021, Oji Papéis Especiais celebrates the 10th anniversary as a member of theOji Group. At this milestone, we are working on the third phase of expanding production so that we can meet the strong demand for thermal paper in South America, and this expansion is scheduled to be complete in December 2021.
The expansion will almost double our production capacity in Brazil.
We aim for a smooth launch, and hope to be able to make the most of the newopportunities presented by these new technologies.

What the Oji Group Aims For

Voice

print, and sell thermal paper and adhesive paper, in order tofurther strengthen and reinforce the upstream businesses
that primarily manufacture and sell thermal paper and adhesive paper.
In Central and South America, demand is rising for thermal paper, due to the spread and expansion of POS systems
and logistics systems. Through increased manufacturing capacity at Oji Papéis Especiais in Brazil, we aim to improve
quality and cost competitiveness, maintain the share of Brazil’s thermal paper market, and expand its share of the thermal paper market across Central and South America.

About the Oji GroupWe are striving to expand its business that integrate materialand converting across the world, pivoting on the thermal paper business, which boasts a share of around 20% of the
global market. In response to increasing demand in line witheconomic advancements in newly industrialized countries inSoutheast Asia, South America, the Middle East, Africa andelsewhere, we will continue to leverage its core technologies,
which are a strength of the Group, to expand into new business.
In Southeast Asia, we are implementing M&A targeting
downstream operating companies in Malaysia that convert,

Main Overseas Sites●China・Sunshine Oji (Shouguang) Specialty Paper
Production/sales of decorative base paper
・Oji Kinocloth (Shanghai)Converting/sales of dry pulp non-woven fabricConverting/sales of thermal paper, etc.

●Myanmar・Oji Myanmar Packaging [OMPC]
Production/sales of flexible packaging
products, etc.

●Germany
・Kanzan Spezialpapiere [KANZAN]
Production/sales of thermal paper, etc.

55

Oji Group Integrated Report 2021

North America

South America●United States・Kanzaki Specialty Papers [KSP]
Production/sales of thermal paper, etc.

●Brazil・Oji Papéis Especiais [OPE]
Production/sales of thermal paper,carbonless paper, etc.

Business Strategy Promotion of Innovation
Paper Net Envelopes
Oji Tac’s Paper Net Envelope was awarded the 44th
Kinoshita Awards in the New Creation Category by theJapan Packaging Institute. The product is a padded envelope made fully of paper and does not require the plastic bubble wrap used in conventional padded envelopes.
In Paper Net Envelopes, the slit paper sheet attachedto the opening spreads out like a mesh when a productis inserted and thus works as a cushioning material thatprevents product movement, thereby removing the needfor conventional plastic bubble wrap. Furthermore, optimization of the base paper material has created a structure that can easily be inserted into mailboxes. This
reduces redeliveries, an issue that is on the rise given theincreasing use of online shopping. This plastic-free construction and design of easy insertion into mailboxes
have been highly recognized and adopted by many customers.

Financial Data & Corporate Data

Europe●Malaysia
・Tele-Paper Malaysia [TP]Printing/converting of thermal paper, etc.
・Hyper-Region Labels [HRL]
Printing/converting of label, etc.

President
Oji Papéis Especiais

Sustainability Strategy●Thailand・Oji Paper (Thailand) [OPT]
Production/sales of thermal paper andcarbonless paper
・Oji Label (Thailand) [OLT]
Production/sales of adhesive paper/film andrelease paper

Agostinho
Monsserrocco JuniorManagement Strategy

Asia

Oji Group Integrated Report 2021

56

Forest Resources and Environment Marketing BusinessNet salesbillionOperating profit

billionChanges in Net Sales and Operating Profit■ Net sales (¥bil.) ■ Operating profit (¥bil.)

298.5

326.5

312.0

285.6

245.3

64.6

Fumio Shindo
President, Forest Resources and Environment Marketing COMPANY
Senior Executive Officer
Oji Holdings Corporation

39.0

FY201754.0
28.8

FY2018FY201916.7
FY2020

FY2021 Planned

Energy Business: Expansion of the renewable energy business with a focus on establishing new biomass power plants

Forest Plantation BusinessWe are working to cultivate and manage company-owned forests in Japan and overseas. Harvested wood are supplied for pulp raw materials,
as well as for a range of applications such as lumber, plywood materials, and biomass fuels.

●Biomass power plant (for power retailing)●Power generation using renewable fuels*1, fuels made from waste*2,
fossil fuels, etc. (for pulp and paper manufacturing)●Hydroelectric power plant ●Solar electric power plant

Oji Paper Tomakomai
Mill Chitose No. 1
Hydroelectric PowerPlant*1 Renewable fuels: black liquor, etc. *2 Fuels made from waste: wood residue, bark, and RPF, etc.

Oji Green Energy Tokushima
Operation to commence in 2022 (within the
Oji Paper Tomioka Mill)
Generating capacity: 75,000 kW
Joint venture with ITOCHU ENEX
Other
Undertakings that seek to contribute to thedevelopment of a low-carbon society
including the fuel procurement business forbiomass power generation, hydroelectric
power business, and other businesses

Oji Green Energy
Shiranuka

Oji Green Energy
EbetsuOji Paper Tomakomai Mill
Chitose No. 1 HydroelectricPower Plant (inside)

Oji Paper Tomakomai Mill
Chitose No. 1 HydroelectricPower Plant

MPM Oji
Eco-Energy

Oji Green Energy Tokushima(scheduled to commence
operation in 2022)

Oji Green Energy Nichinan
Oji Green Energy
Nichinan
MPM Oji Eco-Energy’s biomass
power generation facility

Biomass fuelOji Green Energy Ebetsu

57

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Fuels/Chemicals and Other Material
Procurement BusinessCentralized procurement management and advantageous and stable procurement are conducted for the Oji Group as a whole. CSR procurement
is conducted while taking into consideration theenvironment and society in accordance with the
Oji Group Partnership Procurement Policy.

Oji Group’s Power Generation Sites
MPM Oji Eco-Energy
Operation commenced in 2019 (within
Mitsubishi Paper Mills Hachinohe Mill)
Generating capacity: 75,000 kW
Joint venture with Mitsubishi Paper Mills

Sustainability Strategy

Energy BusinessWe are promoting the electric power generation
business by newly establishing and expanding
electricity generation facilities using renewableenergy, including wood biomass, hydroelectric
power, and solar power. In 2022, our new woodbiomass power generation facility Oji Green Energy Tokushima is slated to start operation.

Lumber Processing BusinessWe are taking measures to expand production
capacity, and are purchasing and selling lumber
and processed lumber products, primarily in
Asia and Oceania. Efforts to expand sales atsales bases established in China and Southeast
Asia are also ongoing.

Additionally, we are reinforcing the biomass fuel business in conjunction with expansion of the energy business. In Japan, we are increasing procurement of fuelwoodchips by making use of unused wood resources.
Overseas, efforts to increase procurement of palm kernel
shells (PKS) for use as fuel continue in Indonesia and Malaysia, while ensuring lawfulness and maintaining sustainability.

Management Strategy

Pulp BusinessWe produce a diverse lineup of pulp grades including hardwood kraft pulp, softwood kraft
pulp, and dissolving pulp. With 2.5 million tons
per year market pulp supply capacity, it is boosting sales in Asia and other growth regions.

We are pursuing further expansion of the energy business,
and a joint venture biomass power generation facility established with Mitsubishi Paper Mills commenced operation.
Additionally, a decision was made to construct a biomass
power generation facility in Tokushima Prefecture as a joint
venture with ITOCHU ENEX, and preparations are underway for the start of operations in September 2022.

Business Strategy

Business Strategy Profitability Improvement of Domestic Business

What the Oji Group Aims For

We are comprehensively
leveraging assets owned by theGroup, including pulp, renewableenergy, afforestation, and lumber
processing to promoteenhancement of the business.

%

Segment Overview
In FY2020, we had net sales of 245.3 billion yen (down 40.3 billion yen from FY2019) and operating profit of 16.7 billion yen(down 12.1 billion yen from FY2019). In the energy business,
electric power sales increased due to a full year of operation of
MPM Oji Eco-Energy that commenced operations in September
2019. However, the global stagnation in business resulting fromthe COVID-19 pandemic has resulted in a weaker pulp market.
The domestic dissolving pulp business and the overseas pulp
business were particularly impacted, resulting in an overall drop in
net sales and operating profit.
In FY2021, net sales of 312.0 billion yen (up 66.7 billion yen
from FY2020) and operating profit of 54.0 billion yen (up 37.3
billion yen from FY2020) are planned.

About the Oji Group

15.4¥245.3¥16.7

Net Sales Composition Ratio

Oji Green Energy Shiranuka

Oji Group Integrated Report 2021

58

Forest Resources and Environment Marketing BusinessIn the pulp business, we continue to implement strategic
profit measures at key business sites to reinforce businessfoundations that are resilient to fluctuations in pulp markets.
Oji Group know-how and operational management
methods have been introduced and used in Oji Fibre Solutions and Pan Pac in New Zealand to stabilize operations
and raise efficiency. In Brazil, profit measures are implemented on a continuous basis by updating production
facilities and through other means.
In May 2021, Japan Brazil Paper and Pulp Resources
Development Co., Ltd., the parent company of CENIBRA,
acquired shares of CENIBRA as treasury stock from
non-controlling shareholders. Accordingly, our Group holds
all voting rights of the company, which will strengthen theGroup’s business foundation as well as facilitate flexible

Massive forest fires have become common occurrences
in many parts of the world, a critical global issue thatneeds urgent global solutions. Cenibra, which has forest
plantations and a pulp mill in Brazil, has introduced an innovative forest fire prevention and fighting system using
artificial intelligence (AI) for their 250,000 ha forests.
The company has 38 watchtowers equipped with 360

ESG and SDGs Topics

Products are loaded onto a ship (Brazil)

business operations at CENIBRA, thereby enhancing the
production and sales of our pulp business.

tons

Jiangsu Oji Paper●

Japan (Mills in Japan)●▲■160,000 tons

CENIBRA●

1,200,000

Oji Fibre Solutions▲◆

tons

Pan Pac❖

200,000 tons

Voice

Types of pulp: ●Hardwood kraft pulp ▲Softwood kraft pulp ■Dissolving pulp ◆Pulp for cement ❖BC-TMP

CENIBRA Mill
(Belo Oriente, Minas Gerais, Brazil)

59

Oji Group Integrated Report 2021

Pan Pac Mill
(North Island, New Zealand)goals for SDGs.

Cenibra & Oji in times of Covid-19
Cenibra is a traditional company in the sector of bleached kraft pulp from eucalyptus, with a current production of 1,200,000 tons/year, located in the state ofMinas Gerais, Brazil founded in 1973.
This year OJI acquired all JBP shares making Cenibra 100% as Oji Group
which brought us a lot of joy and pride. We do hope that the OJI culture which isalready present in our daily lives can help us to go even further, maintaining Cenibra’s tradition, reinforcing its values, always thinking beyond the boundaries.
During this pandemic period, Cenibra hasn’t stopped. With a lot of internal
collaboration from employees, Cenibra implemented several measures to minimize the impacts of COVID-19 and other negative factors bringing harmony to thework environment and serenity to its employees, prioritizing production safely andeven achieving an anual record of production in 2020.
Cenibra has preserved the partnerships and the good relationship that maintains with the Government and the communities around it.
Cenibra is like this, always with a vision of the future overcomes difficulties andgoes beyond expectations.

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Adermo Costa
Commercial and Logistics Manager
Celulose Nipo-Brasileira S.A.

The Global Forest Goal 2 includes 9

Sustainability Strategy

600,000

tons

Social Contribution Activities (QPFL, Vietnam)
・Dispatch of medical teams
In February 2020, QPFL dispatched a medical team to villages without doctors, and 650
villagers received medical examinations.
Blood pressure measurement equipment, clinical thermometers, beds and second-hand clothes were also provided to village clinics.
・Installation of water purification equipment
In March 2021, water treatment filters were installedat kindergartens and elementary schools in Canh
Lien village, and at elementary schools in Dak Mang
village.

Management Strategy

tons

Global Forest Goal 2
Enhance forest-based economic, social and environmental benefits

Business Strategy

Annual production capacity of market pulp

340,000

Forestry Activities that Contribute to Achieving the Sustainable Development Goals(SDGs)The UN Strategic Plan for Forests 2030 indicates that forestry activities contribute to achieving SDG goals, and establishes six Global Forest Goals for international society to achieve by
the year 2030. This section introduces the Oji Group’s initiatives towards the second Global
Forest Goal, as an example.
Promote the Employment of Local Residents
In Vietnam, we hire local residents for planting acacia forests in the wet season and harvesting them in the dry. This leads to creating local employment throughout the year, thus contributing to enhanced living standards.

Main Overseas Sites (Pulp Production Sites)

2,500,000

degrees rotating cameras. When the AI detects smokeand fires, the monitoring room notifies fire crews nearest
to the site of the incidents. They start firefighting immediately. The AI-equipped cameras are more efficient thanhuman eyes and can locate the accurate fire site within
1-2 minutes. Cenibra has reduced forest fire risks significantly.

What the Oji Group Aims For

Business Strategy Promotion of Innovation
About the Oji Group

Business Strategy Expansion of Overseas Businesses

60Printing and Communications Media BusinessNet salesbillionOperating profit

billionChanges in Net Sales and Operating Profit■ Net sales (¥bil.) ■ Operating profit (¥bil.)
305.4

302.9

292.7

244.0

230.0
17.0

11.3

Fumio Shindo
President, Printing and Communications Media COMPANY
Senior Executive Officer
Oji Holdings Corporation(1.2)
FY201711.2(4.8)
FY2018FY2019FY2020

FY2021 Planned

Printing and Publication Paper
Business
We have various types of printing
paper used for different applications including books, magazines,
and catalogs, etc.

Communications Paper BusinessWe provide various output media for information processing
systems, including copying paper and forms.

Business Strategy Profitability Improvement of Domestic Business61

Oji Group Integrated Report 2021

In our mills, in order that we can pass on the knowledge of ourskilled engineers that has been accumulated over many years to
up-and-coming generations, and that we can improve the production skills of younger workers, we are working on putting advanced tools and systems to practical use utilizing technicalinformation sharing and as educational tools. For example, we are
installing sensing devices such as vibration sensors and temperature

sensors at manufacturing sites for use in remote monitoring, andwith these we are working to enable rapid detection of problems
and improve the productivity of our monitoring operations.
Looking forward, we will work to verify the usage of the latest
technologies that include using AI for more accurate monitoringand diagnosis, and for understanding the status of other facilities.

ESG and SDGs Topics

Financial Data & Corporate Data

The #L-1 machine (post-retrofit name of the #N-5 machine) at the Tomakomai Mill

Looking towards medium- to long-term changes in the demand
structure, we are working at consolidating our production facilities with the aim of improving profitability and strengthening ourinternational competitiveness. In FY2020, we shut down the#N-1 machine at the Tomakomai Mill, and started retrofitting the#N-5 machine (conversion of product type), completing the retrofitting in June this year, and this has already started trial operation. We are also continuing our efforts in thorough cost
reductions within each department. In partnership with Mitsubishi Paper Mills, successful outcomes have been seen in production efficiency improvement and cost reduction by eliminating
mixed transportation and sharing operating technologies, andmutually utilizing sales channels.

Business Strategy Promotion of Innovation

Sustainability Strategy

Newsprint BusinessWe hold approximately 30% shareof the Japanese market for newsprint, and provide newspaper companies throughout the country witha stable supply of high-quality newsprint.

Household paper base paper machine (TM2)Management Strategy

Jiangsu Oji Paper Co., Ltd. newly installed two household paperbase paper machines in 2020, and it is carrying out works toincrease its pulp facilities in 2021. Produced household paperbase paper will be used in nepia brand products, as well as being sold to external customers who require base paper. It is also
considering the installation of more household paper base paper
machines. This expansion of pulp facilities will let us secure raw
materials for household paper base paper, and will let us rapidly
leverage the synergies of capital investment while taking advantage of our forte in integrated pulp and paper production.

Business Strategy

Business Strategy Expansion of Overseas Businesses

What the Oji Group Aims For

In response to the changing
demand structure in Japan andintegration with Asian markets,
we are advancing with ourbusiness structure reforms
while maximizing our cash flow.

%

Segment Overview
In FY2020, the Printing and Communications Media Business had
net sales of 244.0 billion yen (down 48.7 billion yen from FY2019)and operating profit of 11.2 billion yen (down 0.1 billion yen from
FY2019). Sales volumes of comic books increased because ofhigher demand from stay-home trend under the COVID-19 pandemic and from the release of new popular works. However, lower
domestic demand for newsprint, printing / publication paper, andcommunications paper stemming from the economic downturnand spread of telework resulted in a drop in net sales. With stringent cost reductions, the operating profit stood at a level similar tolast fiscal year.
In FY2021, net sales of 230.0 billion yen (down 14.0 billion yen
from FY2020) and operating profit of 17.0 billion yen (up 5.8 billion yen from FY2020) are planned.

About the Oji Group

15.3¥244.0¥11.2

Net Sales Composition Ratio

Awarded the Excellence Prize at the Eco Mark Award 2020
We were awarded the Excellence Prize at the Eco Mark Award 2020 held by the Japan Environment Association, Eco Mark Office. In addition to promoting sustainable forest management andpaper recycling, we are the first company in the industry to achieve Eco Mark certification for
printing paper. We have continued to obtain Eco Mark certification since 1990 and are working
to expand our environmentally-friendly products by obtaining Eco Mark certification with products that combine waste paper pulp and forest-certified wood pulp. We have been highly recognized as an important party in supporting domestic paper recycling systems, given that we havesome of the highest consumption of recovered paper in Japan.

Oji Group Integrated Report 2021

62

Corporate Management Group and Shared Service Companies

About the Oji GroupOji Homes Aoyama (located in Minamiaoyama, Minato-ku, Tokyo)

KyokuyoGinpo Pack

Hotel New Oji

Oji Real Estate

Kyokuyo Co., Ltd. is a specialized trading company that purchases and sells various products of the Oji Group and othercompanies. These products include pulp and paper, synthetic
resin materials and products, packaging materials, chemicals,
and machinery, from upstream (raw and other materials) to
downstream (finished products). As a trading company that
proposes and develops solutions to customer problems, we
respond to customer requirements in the best ways possible.

Ginpo Pack Co., Ltd., a subsidiary of Kyokuyo, conducts
planning, production, and sales of plastic containers forfood packing with a focus on heat-resistant polypropylene
foam containers using the new material “Pulfine,” which
can reproduce steaming hot home cooking when using a
microwave oven.

Hotel New Oji Co., Ltd. is engaged in the hotel and flightcatering businesses. In addition to the hotel business at
the Grand Hotel New Oji, a 16-story city hotel located inTomakomai City, Hokkaido, we prepare inflight meals fordomestic and overseas airlines in the catering building at
the New Chitose Airport and load the meals onto aircraft
using large, specialized vehicles.

Oji Real Estate Co., Ltd. is a general developer active nationwide in the development and sales of condominiums
and single-family homes, lease and management of officebuildings, condominiums, and commercial facilities, andthe renovation business. We also have a construction division that conducts design, supervision, and consultation
in a wide range of areas including factories and plants aswell as public and private facilities.

Industrial water production system

A roll-on roll-off (RORO) ship that can transport vehicles carrying goods

Plant

Drink cartons made using base paper manufactured by the Oji GroupOji EngineeringOji Logistics

Ishizuka-Oji Paper Packaging

Oji Engineering Co., Ltd. leverages its technologies accumulated through paper manufacturing to offer one-stopengineering services ranging from facility design to operations. To explore other new fields, it also makes active efforts in proposals for practical waste water treatment andother systems in the water environment business, and indevelopment of fuel handling facilities in the biomass power generation business. In addition, it is also promoting
technical support for digital transformation, such as enhanced safety education utilizing VR-simulated disaster
experience, remote maintenance using drones equippedwith thermographic cameras, as well as realization ofworking style reforms through improved operational efficiency using IoT technology.

In addition to the existing domestic and international logistics
operations for Oji Group products, Oji Logistics Co., Ltd. is also
expanding the scope of operations to include the distribution ofnepia products. We are aiming to be a comprehensive logistics
company that can offer integrated logistics services such asprocessing and delivery also to customers outside the Oji
Group (external sales shipping), by utilizing our sea and landtransport capabilities. We have started operations to meet theneeds of customers, such as having roll-on roll-off ships call at
Hachinohe Port. Also, We received the Excellent BusinessAward by the Ministry of Land, Infrastructure, Transport andTourism’s Green Logistics Partnership Conference for the promotion of White Logistics (good-standing logistics). We arecontinuing to promote business reforms, and are striving toachieve productivity improvements in logistics services.

Amid increasing attention on paper materials in the context of a worldwide heightening of environmental awareness, Oji Holdings has invested in the paper beveragecontainer business that was split from ISHIZUKA GLASS,
and launched a joint venture in September 2020.
Ishizuka-Oji Paper Packaging Co., Ltd. combines the
Oji Group’s expertise in manufacturing and processing paper with ISHIZUKA GLASS’ expertise in processing andfilling paper containers for a diverse range of contents including milk, juice, soft drinks, tea beverages, and soups.
We have established a domestic integrated production
system covering papermaking of base papers through toManagement Strategy

The Grand Hotel New Oji

Business Strategy“Pulfine,” highly-expanded polypropylene containers that feature excellent
heat resistance and heat retention properties

What the Oji Group Aims For

Desk partition to prevent airborne virus droplets, developed in collaboration
with subsidiary, Sunprot

Oji Group Integrated Report 2021

Financial Data & Corporate Data

Oji Group Integrated Report 2021

Sustainability Strategy

63

laminate processing and beverage packaging. By sellingsuperior filling equipment from both Japan and overseas,
as well as providing service and maintenance, we are also
supporting companies involved in the handling of delicate
paper container beverages.
By moving away from our former dependence on overseas sources of base paper, and establishing Japan’s first
integrated production systems for paper beverage containers, we can ensure stable supply of high-quality, safe,and dependable products to dairy and beverage manufacturers throughout Japan.

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