The Oji Group
Integrated Report 2022
Fiscal year ended March 2022

Lake Piauzinho and forest in Ipaba, Brazil

Management Philosophy

PurposeCreation of Innovative Value

Grow and manage the sustainable forest,

Innovation is essential for the Oji Group to make a big leap forward. Changes must take place in the research andtechnological 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.

Contribution to the Future and the WorldThe Oji Group comprises a diverse range of businesses. We have grown into a global corporate group, with anoverseas sales ratio of over 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.

Develop and deliver the products from renewable forestAnd
Oji will bring this world a brighter future filled with hope
The forest grown and managed sustainably not only absorbs and fixes carbon dioxide, but also mitigates floods,

Harmony with Nature and Society

cultivates water sources such as water purification and prevents natural disaster in addition to its contribution to

Sustainable resource circulation based on forest resources is the foundation of the Oji Group. We will advanceour initiatives such that the business activities 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.

biodiversity, healing and health enhancement of people.

The products derived from wood utilizing forest resources are made of renewable materials and able to substitutefor plastic, films and fuel derived from fossil resources.

Corporate 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 of individual employees to contribute to the future, society, and the world, as well as the determinationof all Group members to maximize corporate value as a truly global company.

01

The Oji Group Integrated Report 2022

Oji Group will confront global warming and environmental issues, and bring this world a brighter future filled withhope by growing and managing the sustainable forest and by developing and delivering the products utilizing renewable forest resources.

The Oji Group Integrated Report 2022

02

CONTENTS

01
05
07

History of the Oji Group’s Value Creation
Major Affiliated Companies Distribution Map

02
09
11
19

Hiroo Isono (1945-2013)
The Oji Group Integrated Report 2022

The Oji Group
Integrated Report 2022
Fiscal year ended March 2022

Oji Holdings Corporation

2022/12/09

18:56:23

25
31
33

Mr. Hiroo Isono, a master painter,primarily created works with forest
motifs. From FY1999 to FY2001,
the Oji Group commissioned Mr.
Isono to create paintings on thetheme of our Oji Forests in Japanand overseas. It published them incalendar form as the Oji no Mori no
Nakamatachi Calendar [Calendar of
Friends in Oji Forest] series.
This report’s cover art, titled Morito Nakamatachi [Forest with
Friends], depicts lush Oji Forests inJapan and the many animals flourishing there.

Message from the President
Long-term Vision & Medium-term Management Plan

Initiatives for Environmental Issues— Sustainability —Action on Climate Change
Abundant Forests Creation and Resource Recycling
Consideration for Ecosystem

04
35

What the Oji Group Aims For

Value Creation Process

03

Cover Art: Mori to Nakamatachi[Forest with Friends]

History of the Oji Group’s Value Creation

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

05
41
43
49
53
57
59

Initiatives for Profitability Improvement— Profitability —Business Overview

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

06
61
63
65
69
71
75
76
80

Governance Strategy

07
81
83
85
87
89
91
93
94
97

Sustainability Strategy

Sustainable Business Model
Core Competencies and Material Issues
Material Issues and KPI
Responsible Raw Materials Procurement
Effective Resource Utilization (Water)
Effective Resource Utilization (Recovered Paper)
Respect for Human Rights
Enhancing Human CapitalOccupational Safety

08

Financial and Non-financial Data

Independent Outside Directors’ Roundtable

99 Financial and Non-financial Highlights
101 Analysis and Evaluation of Management Performance
102 Financial Data Highlights
104 Consolidated Financial Statements
107 Third-Party Independent Assurance Report
109 List of Affiliated Companies
111 Corporate Data / Stock Information / Evaluation from

Discussion
Message from an Independent Outside Audit &112 A Year at the Oji Group

Message from the Chairman
Corporate Officers (Oji Holdings Corporation)
Corporate GovernanceCompliance
Risk Management
The Oji Group’s BCP

Society

Supervisory Board Member©HIROO ISONO ALL Rights Reserved

Regarding the Issuance of Integrated Report 2022
We started publishing the Oji Group Integrated Report in 2019 to present financial and non-financial information concerning theGroup in an easy-to-understand manner to all of our stakeholders. In this fiscal year’s report, we would like to convey a narrative of
new value creation encompassing our business development with a focus on the FY2022–2024 Medium-term Management Plan
and the creation of new value through green innovation, based on our Purpose, which we announced in May, and our Long-term Vision for 2030. Through this Integrated Report, we will further deepen communication with our stakeholders and, amid an ever-changing society, strive toward what we aim for.

Financial
Sustainability Report (online)
https://ojiholdings.disclosure.site/en/
Corporate GovernanceRisk Management
Compliance
Mitigation and
Adaptation to Climate
Changes
Reduction ofEnvironmental 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
Library
Stock

Details(Comprehensive)

IR Schedule
IR News Releases
Stock Chart

In general, this report covers Oji Holdings, 186 consolidated subsidiaries, and 23 equity-method affiliates (as of March 31, 2022).
In cases where coverage differs, this is indicated.

Reporting Period

Economy, Trade and Industry)

Task Force on Climate-related Financial Disclosures(TCFD)

Disclaimer Regarding Forecasts and Other
Forward-looking Statements

Guidance for Collaborative Value Creation (Ministry of

https://investor.ojiholdings.co.jp/en/ir/library/integrated.html

Scope of Coverage of this Report

The reporting period is from April 1, 2021 to March 31, 2022 (except for lost time injury frequency rate, and environmental data forcertain overseas sites, for which the period is from January 1,
2021 to December 31, 2021). With the exception of numerical
data, however, activities carried out from and after April 2022 arealso referenced.

GRI Standards (Global Reporting Initiative)

Integrated Report

The Oji Group Integrated Report 2022

The ten principles in four areas found in the United
Nations Global Compact
al Integrated Reporting Council)

Integration with Strategy(Narrative)

03

When preparing this Report, reference was made to thefollowing.

International Integrated Reporting Framework (Internation-

Communication Map

Nonfinancial

Editorial Policies

Ensuring Reliability
To ensure the reliability of this report, FY2021 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.

Forecasts and other forward-looking statements in this report represent projections by Oji Holdings based on information available
at 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
CoC (157.0 g/m²), while the main body of the report is printed on
Oji Paper’s OK Pixeed 01 EF (80.0 g/m²). These products are
made with raw materials from responsibly-managed FSC™-certified forests, renewable resources, and other managed supply
sources (FSC™C005431, FSC™C014119).

The Oji Group Integrated Report 2022

04

History of the Oji Group’s Value Creation

History of the Oji Group’s Value Creation

10— Green Innovation —Initiatives for ProductDevelopment

1,500
1,400
1,300

8

— Profitability —

1,200
1,100

6

Pulp output (overseas)

4<Start of Global COVID-19 Pandemic><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>

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

The Oji Group Integrated Report 2022

Paper output (domestic)

2

Financial andNon-financial Data05

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

Paperboard output (domestic)

Paper materials such as boxboard, thermal paper, andhousehold paper have come toplay an active role in various
situations that support daily life.

Sustainability Strategy

Shibusawa advocated that “paper
and printing businesses are thesource of civilization.” He held on
to his great ambition to supply
domestic paper.

Tomakomai Mill for newsprint andKasugai Mill for woodfree paper
contributed to our growth.
Kasugai Mill even became apioneer of urban factories.

Oji Fibre Solutions acquired (New Zealand and Australia)
People & Grit acquired (Malaysia)

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)

Governance Strategy

Net sales

From thecollectionof theShibusawa
Memorial
MuseumInitiatives for Profitability
Improvement

Light-weighted newsprint became
common, and in the household paper
field, we succeeded in volume reduction of box tissues. In addition, due toadvances in recovered paper
utilization technology, the recovered
paper utilization ratio exceeded 50%.

— Sustainability —Output (million tons)

1,600

Initiatives forEnvironmental Issues

Net sales (¥billion)

What the Oji Group
Aims ForWe have newly established corrugated containerand folding carton factories in Malaysia, Cambodia and India, among other countries, to meet
vigorous local demand.

History of the Oji Group’s
Value Creation

Demand for paperboard as a packaging material
was strong. The production ratio of paper andpaperboard gradually changed.

Further Global
Deployment

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

Shift in the Business
Structure

Paper production volume
has been declining since2008. This unprecedented
crisis created an
opportunity for shifts in thebusiness structure.

1990s

Response toEnvironmental Issues

Lifestyle Changes andPaper Diversification

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 theequipment 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, apaper manufacturing company, advocatedby Eiichi Shibusawa, the founder of themodern Japanese economy.

Birth of the Modern Paper
Manufacturing Industry

1873

1970s

Efforts toward New
Technologies

1950s

2000s

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

Since its founding in 1873, the Oji Group has been growing through the expansion of business fields. While keeping
abreast of the trends of the times, we have tackled changing social needs and evolved our business structure. Further, we have supported Japan’s diversifying lifestyles through paper. In the early 1900s, we achieved the domestic
production of printing and communications media such as newsprint and printing paper. During the country’s rapid
economic growth, we began producing corrugated containers, household paper, and other household and industrial
materials. In the 1990s, we promoted the recycling of recovered paper as a solution to the issue of municipal refuse.
In recent years, aiming for contribution to a sustainable society, we have been actively rolling out the technologies
cultivated in our domestic business to the global market. We were quick to expand overseas business and transformed our business structure to one focusing on household and industrial materials. As a result of these efforts, our
output ratio of paperboard to paper reversed for the first time in 2020. In FY2021, we achieved record-high profits,
and we will continue to take steps toward further growth.

0

The Oji Group Integrated Report 2022

06

History of the Oji Group’s Value Creation

Major Affiliated Companies Distribution Map
Group companies in East Asia (Number of manufacturing sites: 12)
Sunshine Oji (Shouguang) Specialty
Paper Co., Ltd.
Oji Paper International Trading(Shanghai) Co., Ltd.

Germany (Number of manufacturing sites: 1)

China (Number of manufacturing sites: 10)

Decorative paper

Thermal paper,
inkjet paper

Regional headquarters Oji Paper Management (Shanghai) Co., Ltd.

Sales

Heavy-duty packaging
Suzhou Oji Packaging Co., Ltd.
materials

Household paper (basepaper, paper products),
disposable diapers

Kanzan Spezialpapiere GmbH

Pulp

Heavy-duty packaging
Cheng Yuan Paper Business Co., Ltd.
materials
Heavy-duty packaging Oji Packaging Technology
materials(Chongqing) Co., Ltd.

Coated paper,
wood-free paper

Paper bags

Oji Packaging (Shanghai) Co., Ltd.
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.

Containerboard,
boxboard, packaging
paper

Specialty paper, films

Oji F-Tex Co., Ltd.

Woodchips, lumber
business etc.

Oji Forest & Products Co., Ltd.

Oji Materia Co., Ltd.

COMPANY management Oji Green Resources 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.

Morishigyo Co., Ltd.

Adhesive products,
medical

New Tac Kasei Co., Ltd.

EnergyOji Green Energy Nichinan Co., Ltd.

Oji Packaging Co., Ltd.

Non-woven fabricOji Kinocloth Co., Ltd.

EnergyOji Green Energy Tokushima Co., Ltd.

Paper bags

Oji Seitai Co., Ltd.

Printing, processing,packaging materials

Chuetsu Co., Ltd.

EnergyMPM Oji Eco-Energy Co., Ltd.

Household paper,
disposable diapers

Oji Nepia Co., Ltd.

Corrugated containers

Folding cartons

Newsprint, printing andpublication paper,
Oji Paper Co., Ltd.
communications paper— Sustainability —Initiatives forEnvironmental Issues

Filters

Jiangsu Oji Paper Co., Ltd.

COMPANY management Oji Industrial Materials Management Co., Ltd.

What the Oji Group
Aims For

Corrugated containers Dalian Mori Mitsui Packaging Co., Ltd.

Manufacturing sites in Japan (Number of manufacturing sites: 108)

History of the Oji Group’s
Value Creation

Europe (Number of manufacturing sites: 1)— Green Innovation —Initiatives for ProductDevelopment— Profitability —Initiatives for Profitability
Improvement

Cambodia (Number of manufacturing sites: 3)

Vietnam (Number of manufacturing sites: 10)

Australia (Number of manufacturing sites: 5)

Regional headquarters Oji Asia Packaging Sdn. Bhd.

Corrugated containers,
Harta Packaging Groupplastic bags

Ojitex (Vietnam) Co., Ltd.

Corrugated containers,
Oji Fibre Solutions
paper cups

Regional headquarters Oji Asia Management Sdn. Bhd.

Myanmar (Number of manufacturing sites: 2)

Corrugatedcontainers
Corrugatedcontainers

Ojitex Haiphong Co., Ltd.

Forest plantation

Containerboard,
corrugated containers

Corrugated containers Oji GS Packaging (Yangon) Co., Ltd.

Paper bags

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

Forest plantation

Flexible packaging
materials

Paper bags

Japan Paper Technology (VN) Co., Ltd.

GSPP Group

Disposable diapers

Oji Asia Household Product Sdn. Bhd.

SingaporeSales

Oji Interpack Singapore Pte. Ltd.

India (Number of manufacturing sites: 4)

Folding cartons

United Packaging Co., Ltd.

Heavy-duty packaging
materials, corrugated Oji Interpack India Pvt. Ltd.
containers

Forest plantation

Quy Nhon Plantation Forest Co. of Vietnam Ltd.

Woodchips

BINH DINH CHIP CORPORATION

Corrugated containers Oji India Packaging Pvt. Ltd.

Sales

Oji Forest Products Vietnam Co., Ltd.

Corrugated containers Empire Packages Pvt. Ltd.

Indonesia (Number of manufacturing sites: 3)

Thailand (Number of manufacturing sites: 5)

Corrugatedcontainers

Corrugated containers,
folding cartons
Heavy-duty packaging
materials
Carbonless paper,
thermal paper
Adhesive paper,
release paper

The Oji Group Integrated Report 2022

PT Oji Sinar Mas Packaging

Woodchips

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.

New Zealand (Number of manufacturing sites: 10)
Containerboard,
corrugated containers,
paper bags

Oji Fibre Solutions

Pulp
Forest plantation, pulp,
Pan Pac Forest Products Ltd.
lumber business

S.Pack & Print Public Co., Ltd.

Disposable diapers PT Oji Indo Makmur Perkasa

Lumber business

Pan Pac Forest Products (Otago) Ltd.

Union and Oji Interpack Co., Ltd.

SalesPT Indo Oji Sukses Pratama

Forest plantation

Southland Plantation Forest Co. of
New Zealand Ltd.

Oji Paper (Thailand) Ltd.

Forest plantation,
woodchips, woodpellets

PT Korintiga Hutani

Oji Label (Thailand) Ltd.

North America (Number of manufacturing sites: 1)

Industrial Materials BusinessHousehold 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)

Financial andNon-financial Data

Label printing &Hyper-Region Labels Sdn. Bhd.
converting
Thermal paper & carbonlessTele-Paper (M) Sdn. Bhd.
paper printing & converting

Oji Myanmar Packaging Co., Ltd.

Green Triangle Plantation Forest Co.
of Australia Pty. Ltd.
Albany Plantation Forest Co. ofAustralia Pty. Ltd.

South America (Number of manufacturing sites: 2)

Sustainability Strategy

Malaysia (Number of manufacturing sites: 15)

Containerboard,
corrugated containers, Harta Packaging Groupplastic bags

07

Group companies in Oceania (Number of manufacturing sites: 15)

Governance Strategy

Group companies in Southeast Asia, India (Number of manufacturing sites: 42)

Listed only for major affiliated companies (As of March 31, 2022)
Production bases do not include sales companies and forest plantation sites.
List of Affiliated Companies (pp. 109-110)

The Oji Group Integrated Report 2022

08

What the Oji Group Aims For

Value Creation Process

lation 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
issues, and contribute to a sustainable society.

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

Provide value tosociety
To Achieve
Environmental Action
Program 2030

throughout the value chain
P81

Long-term Vision

Household and Industrial
Materials Businesses
Functional Materials Business
Forest Resources andEnvironment Marketing
Business
Printing and Communications
Media Business
Other businesses
P41

Enhance
corporate value
Net sales of

2.5 trillion yen
or more(FY2030 target)

Sustainability Strategy

Appropriate Utilization ofManagement Resources
Human capitalIntellectual
capitalNatural capital

Number of Employees:
35,608(Japan: 16,368
Overseas: 19,240)(pp. 94-96)

New Value Creation
through Green
Innovation

Abundant Forests
Creation andResource Recycling(pp. 35-40)(pp. 31-34)

Manufactured
capitalFinancial
capital186 AffiliatedCompanies

Financial Data
Highlights(pp. 109-110)(pp. 102-103)

Social &relationship capital
Responsible Raw
Materials
Procurement

Increase capitalSocialimpactFinancial andNon-financial Data

P84

Business Strategy

Harmony withnature andsociety

Governance Strategy

Mitigation and adaptation toclimate change
Sustainable forest management(forest recycling)
Responsible raw materials
procurement
Stable supply of safe and secure
products
Reduction of environmental
burdens
Effective resource utilization(paper and water recycling)
Respect for human rights
Ensuring workplace safety andhealthInclusion & diversity

P19

Net-zero carbon— Profitability —Material Issues

P01

Environmental
Vision 2050

Initiatives for Profitability
Improvement

P83

PurposeP21— Green Innovation —Global expansion of manufacturingthat 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

Management
Philosophy

Basic Policy of “Toward Further
Growth and Evolution”
1. Initiatives forEnvironmental Issues— Sustainability —2. Initiatives for Profitability
Improvement— Profitability —3. Initiatives for ProductDevelopment— Green Innovation —Initiatives for ProductDevelopment

Core Competencies
Centered on
Sustainable Forest
Resources

Numerical Management Targets
Consolidated operating profitof 150.0 billion yen or more
Overseas sales ratio of 40%(With a target of 50% in the
future)— Sustainability —FY2022–2024
Medium-termManagement Plan

Resource circulation

Action on climate change
Abundant forests
creation and resource
recycling
Consideration forecosystem
Development of trusting
relationships with our
stakeholders

Impact on
the OjiGroup

Initiatives forEnvironmental Issues

Sustainable
Business Model

Core Competencies

Solve social
issuesWhat the Oji Group
Aims Foron the risks and opportunities recognized in theseSocial Issues, Megatrends andGlobal Goals

History of the Oji Group’s
Value Creation

The sustainable business model (resource circu-(pp. 87-88)

09

The Oji Group Integrated Report 2022

The Oji Group Integrated Report 2022

10

What the Oji Group Aims For

Message from the President

Governance Strategy
Sustainability Strategy
Financial andNon-financial Data

The Oji Group Integrated Report 2022

— Profitability —The Oji Group Integrated Report 2022

Initiatives for Profitability
Improvement

11

Hiroyuki Isono— Green Innovation —Representative Director of the Board,
President and Group CEO,Oji Holdings Corporation

Initiatives for ProductDevelopment

In the decade since its transition to a holding company structure, the Oji Group has responded to
drastic changes in the market environment by transforming its business structure and has
achieved steady growth. In the next decade, under the theme of “Toward Further Growth and Evolution,” we will aim to make even greater leaps forward and pursue increased value in our businesses. In order to remain as an enterprise that is needed by the world, we will continue to take on
the challenge of realizing a brighter future for the world filled with hope.

Strengthen international competitiveness throughcost reduction
Establish an integrated business model from basepaper to paper processing
Achieve growth through the promotion of R&Dbased business
Push ahead with the Forest Resources andEnvironment Marketing business
Expand overseas business
Strengthen trading functions

In considering our “growth” and “evolution,” “growth”
means the expansion of business scale, like a child growing and gaining the same capabilities as its parents.
“Evolution” refers to a change in the capabilities themselves, such as advancing into new fields, like one species evolving into a new one through gradual changeover generations.
Let’s look at how these concepts will apply to the Oji
Group and its future. First, looking at “growth,” we willachieve the expansion of business scale in situations
where demand for a given business is growing, or in situations where demand is sluggish but we have an advantage over our competition that enables us to expand ourshare. Such situations apply to many of our businesses,
including our domestic and overseas corrugated container, household paper, imaging media, and pulp businesses. We will be taking consistent steps to grow thesebusinesses. It is impossible to avoid the fact, however,that some of our businesses face continuing decline indemand, or have difficulty implementing a differentiation
strategy due to increasing commoditization in the field.
This particularly applies to our printing and communication paper business and newsprint business. Even if acertain level of growth can be achieved amid a sure decline in demand for some products by compensating
through the expansion of more promising products, there
is a strong possibility of this growth primarily coming fromfighting for greater share of the existing market, and it islikely such growth will eventually come to a standstill. Accordingly, it is extremely important that we “evolve” into
new fields.

— Sustainability —Through the Utilization of
Sustainable Forest Resources,
Oji Will Bring this Worlda Brighter Future Filled with Hope

Before discussing our future operations and business development, I would like to take a look back on the changes the Oji Group has undergone over the past 10 years.
In October 2012, Oji Paper Co., Ltd. transitioned to apure holding company and renamed itself Oji Holdings
Corporation. At that time, paper industry in Japan was ina critical situation because of the progress in the digital
shift, the decline in the status of paper media, and the increase in imported paper. In order to surmount this difficult situation, the Oji Group took a policy of businessstructural transformation, strengthening and accelerating
initiatives based on the following six measures:“Growth” and “Evolution” Are Key

Initiatives forEnvironmental Issues

Review of the Past 10 Years

As a result, at the end of the FY2013–2015 Medium-term Management Plan, our first since transitioning
to a holding company structure, operating profit was 72.0
billion yen. This is in contrast to our consolidated operating results for FY2012, per which operating profit was
43.5 billion yen. At the end of the following FY2016–2018
Medium-term Management Plan, operating profit was
110.2 billion yen, and at the end of the most recent
FY2019–2021 Medium-term Management Plan, we had
secured no less than 120.0 billion yen in operating profit.
I see this as us having steadily transformed our businessstructure over the past 10 years and having achieved
growth as a group.
The question now is what we will do in the coming 10
years. How will the Oji Group achieve further growth andevolution, and enhance its corporate value? I view exploring our future direction toward this end, mapping out anew policy, and achieving results to be of the utmost
importance.

What the Oji Group
Aims ForIn FY2022, Oji Holdings and the Oji Group transitioned toa new management structure. The Oji Group was founded in 1873 through the efforts of Eiichi Shibusawa, described as the father of capitalism in Japan. Over thecourse of 150 years, the Oji Group, centering on its paper business, has continued to expand the value it provides and contribute extensively to society. When wewere founded, we established a domestic modern paper
supply system, contributing to the development of Japan’s society and economy through the dissemination ofnewspapers and books. Thereafter, we began producing
other products that met the needs of the times, such as
corrugated containers in the 1950s, and household paper, boxboard, and thermal paper in the 1970s. Further,
we didn’t just expand our product range; we also focused on global development and expansion, particularly
from the 2010s onward. With the support of our many
stakeholders, today we have become a company withover 35,000 employees across the entire Group, net
sales of over 1.5 trillion yen, and operating profit of over
100.0 billion yen. To take over management from those
who have come before me and lead the Oji Group toward further growth and evolution is a great responsibility.
However, together with our management team and all of
our employees, I intend to be unsparing in my efforts.

History of the Oji Group’s
Value Creation“Toward Further Growth and Evolution” – Striving Toward the
Further Development of the Oji Group12

What the Oji Group Aims For
Message from the President

Purpose:“Enhance”“Execute”

Environmental Initiatives
Execute measures to addressenvironmental issues andfurther enhance the value

Cope with Mid- to Long-Term Social Issues

Financial andNon-financial Data

Enhance existing businesses
and their value“Encourage Encourage and develop new
wood-derived products and”further enhance the value

Sustainability Strategy

Profitability
Improvement (1)“Expand”Governance Strategy

Expand businesses into existingand new markets and further
enhance the value

Product Development— Profitability —Profitability
Improvement (2)Initiatives for Profitability
Improvement

Net Sales of 2.5 Trillion Yen or More

— Green Innovation —The Oji Group Integrated Report 2022

In discussing the steps we are taking toward a newphase, I feel it is necessary to take a moment to review
how the Oji Group is involved with and how it can contribute to society. Our Management Philosophy of “Creation of Innovative Value,” “Contribution to the Future andthe World,” and “Harmony with Nature and Society” exemplifies the direction of our aspirations for manufacturing which meets the needs of the times and supports a
new future, and the development of a sustainable society.
We considered what our purpose was in light of this, andwhat we realized was that the core of our business is forests, the Oji Group’s cherished assets.
The appropriate cultivation and management of forests not only produces renewable forest resources; italso helps to enhance the many functions of forests
which are of public benefit, including absorbing and fixing
CO2, conserving biodiversity, cultivating water resources,
and preserving soil. In addition, our principal business isoffering a lineup of products utilizing forest resources withthe aim of supporting and enriching the lives of people

Vision for 2030

Initiatives for ProductDevelopment

13

Formulating our “Purpose”

Vision for 2030

Throughout our long history, we have never balked atchange and transformation when the time came. Leveraging to the utmost the technologies and know-how
gained by earnestly investing ourselves in forestation, paper manufacturing, and wooden resources, we will produce further innovation. With sights fixed on the future of

How will we achieve our Management Philosophy andPurpose as well as the “growth” and “evolution” I justTo Achieve Environmental
Action Program 2030

(1) They apply the forestation and paper manufacturing technologies we have cultivated(2) Like paper, they are derived from wood, a renewable material

the Oji Group, we are pushing forward with initiatives
aimed at the “growth” and “evolution” which will be
indispensable.

Promote Restructuring

To be more specific, our “evolution” is predicated on
developing new materials and products in order to advance into new fields—in other words, innovation which
creates something from nothing or which produces valuethat has not yet been seen. True, in contrast to the“growth,” something which is continuous and connected,
discontinuous “evolution” might be difficult to be accomplished. However, we do have the potential. The newmaterials and products we are developing are not justlimited to those tied to paper stemming from our conventional businesses. They span a diverse array of forms anduses, including cellulose nanofibers and wood-derived
pharmaceutical products. At first glance, these may appear to be disconnected, but they share the following
two traits:— Sustainability —Toward Realizing Our Long-term Goals
for the Next 10 Years

Initiatives forEnvironmental Issues

the world over. This same lineup can be used to replacefossil resource-derived materials and products. In response to such environmental challenges as dealing with
global warming and conserving biodiversity, I believe our
purpose is to fully leverage these exceedingly uniquecharacteristics and strengths in our business activities.
“To create forests and create from forests.” For manyof our officers and employees, it may seem only naturalthat we would deeply involve ourselves with these twoideas. Going forward, however, I believe that continuing
to do what to us is only natural will produce exceedingly
important value, both for the environment and for society.
I hope that explicitly stating our purpose here will inspire
all of our officers and employees, encourage them to looktoward the same goal, and turn words into action. With
this wish in mind, we formulated our “Purpose.”

What the Oji Group
Aims For“Grow and manage the sustainable forest,
Develop and deliver the products fromrenewable forestAnd
Oji will bring this world a brighter future filledwith hope.”

History of the Oji Group’s
Value Creation

discussed? We formulated our Long-term Vision for 2030
and our FY2022–2024 Medium-term Management Plan
to serve as our overarching policies for this.
Our Long-term Vision establishes our long-term goals
for the Oji Group and the path to them, bearing in mind
the management challenges we have encountered todate as well as the challenges society will face in the medium to long term. The Oji Group as it exists today is a
product of a history of repeatedly looking forward andovercoming upheavals. Similarly, it is necessary to establish clear long-term goals and engage in conscious effort
toward them in order to accomplish something in the future. We are a manufacturer involved in the equipment industry. This business model involves the planning ofstrategic investments and the restructuring of production
systems which, if implemented, take two to three years
from the planning of the relevant construction work to
actual production going into operation. In this sense, as
well, we determined that planning for the future was of
the utmost importance, and this led to the formulation of
our Long-term Vision.
More specifically, in FY2030, we are aiming to achieve
our Environmental Action Program 2030 and consolidated net sales of at least 2.5 trillion yen by promoting thethree basic policies of “Initiatives for Profitability Improvement,” “Initiatives for Environmental Issues,” and “Initiatives for Product Development” under a focus on “Toward
Further Growth and Evolution.” In order to explain how
the Oji Group will achieve “growth” and “evolution,” I will
discuss these three basic policies using four keywords:“Enhance,” “Expand,” “Execute,” and “Encourage.”

Profitability Improvement (“Enhance,” “Expand”) Environmental Initiatives (“Execute”) Product Development (“Encourage”)

The Oji Group Integrated Report 2022

14

What the Oji Group Aims For
Message from the President

Initiatives for Profitability Improvement –Profitability–
The first basic policy aims to improve profitability by “enhancing” and at the same time “expanding” businesses.

Financial andNon-financial Data

The Oji Group Integrated Report 2022

Sustainability Strategy

The Oji Group Integrated Report 2022

Governance Strategy

15— Profitability —The second basic policy, as expressed by the third keyword of “execute,” involves executing measures to address environmental issues such as carbon neutrality andgreen innovation, contributing to sustainability and in turnincreasing the business value of the Oji Group.
In September 2020, the Oji Group set out a goal of
net-zero carbon. In order to achieve this in the year 2050,
we formulated our Environmental Vision 2050, as well as
our Environmental Action Program 2030, which functions
as a milestone on the way to achieving this vision. We
then put these plans into action in FY2021.
Our Environmental Action Program 2030 establishes atarget of reducing our greenhouse gas emissions by atleast 70% in FY2030 compared to FY2018 levels. To
achieve this goal, we will strive to achieve a 20% reduction in emissions from coal boilers and other sources ofemissions, and the remaining 50% reduction will beachieved by enlarging forest plantations and otherwise
increasing the net increment in carbon stocks by forests.
In order to reduce our emissions, we plan to takemeasures including works to convert fuel from coal togas and the discontinuation of coal-fired boilers by revising our energy mix. To this end, we will be investingaround 100.0 billion yen by 2030.
We are also planning to enlarge overseas forest plantations from 260,000 ha to 400,000 ha. This figure

excludes forest reserves and equivalents. The Oji Group
has long been engaged in the business of using renewable forest resources as raw materials. We have beenrunning forestation business since the 1930s in Japanand since the 1970s overseas. We can say that we haveinherited forestation as part of our DNA for business promotion. We expect to spend 100.0 billion yen by 2030 on
the enlargement of overseas forest plantations.
In addition, we own approximately 190,000 ha ofcompany-owned forest in Japan, making us one of thelargest corporate owners of forest in the Japanese private sector. In demonstrating our corporate stance toward environmental issues, we intend to make effective
use of this lush and abundant company-owned forest.
Our measures to address environmental issues
through our business activities are not just limited to ourcarbon neutrality initiative. Our paper business is a pillarof the Oji Group and, as a corporation in harmony withnature, we recycle three resources of forest, paper, andwater, embodying circular economic activities. In addition, we are leveraging our forest resources to the fullest
by focusing on the proactive use of unused trees such as
forest residues, nationwide development of biomass
power generation projects, and the green innovations forthe future such as the development of biomass plastics
and cellulose nanofibers.
Business activities which are inseparably tied to measures addressing environmental issues are what will help
us realize a sustainable society.

Initiatives for Profitability
Improvement

Execute Measures to Address
Environmental Issues and Increase
Business Value

P25-34, 81-92— Green Innovation —Initiatives for Environmental Issues –Sustainability–

Initiatives for ProductDevelopment

Our second keyword, “expand,” means expanding businesses in markets and also expanding their business value. In order for the Oji Group to increase its current net
sales from 1.5 trillion yen to 2 or 3 trillion yen, and increase operating profit from 120.0 billion yen to 200.0 or
300.0 billion yen, moving forward, we will require initiatives not only to “enhance” our businesses but also to“expand” them.
As a specific initiative in existing markets with a limitedpie, we will leverage the existing superiority of our products and services to further increase the ratio of our
products and services which our customers use. At thesame time, it will be important to expand our share byencouraging customers to replace the products and services of other companies with new ones of our own.
Conversely, in expanding into new markets, including— Sustainability —inflation caused by a supply-side crunch and soaring raw
material costs spurred by Russia’s invasion of Ukraine.
There is a growing risk of stagflation, in which generalprice levels continue to rise in spite of a stagnant economy. Looking at data for June 2022, in the United States,
the corporate goods price index increased 11.3% year
on year, and the consumer price index also rose 9.1%.
Meanwhile, in Japan, while the corporate goods price index increased 9.2%, the consumer price index increased
by a mere 2.4%. In addition, in response to rising prices,
the United States raised interest rates. This produced aninterest rate difference, causing rapid deprecation in the
yen and further increasing the costs of imported materials. Failure to rapidly pass these increased costs on to
product prices will weigh on corporate profits. The outlook moving forward is extremely uncertain and, further,
numerous risks are materializing. It is necessary to reflect
the increased costs in product prices to a certain extent.

Expand Businesses and Increase
Business Value

Initiatives forEnvironmental Issues

The first keyword, “enhance,” applies to existing businesses. It means to enhance such businesses—that is,
to work to create an optimum production system, reduce
costs, and increase productivity. Through this and measures such as stabilizing operation, investing to improve
profits, and promoting DX, the aim is to further increasebusiness value.
In the current business environment, we are seeing
historic price increases resulting from the inflation causedby the partial recovery in demand amid the continuing effects of the COVID-19 pandemic, as well as from theP41-60those overseas, we will leverage our existing superiority
to develop new customers. Further, reforming and improving our products and services to increase customers
will help our businesses to “expand” and in turn expand
business value. For example, there is a market need for
eco-friendly products, and moving forward, I believe thisfield will allow us to expand our sales significantly.
In these ways, combining new products and services
with our conventional superiority in existing and new markets will enable us to grow our businesses.
In order to succeed in a competitive environment, wemust precisely analyze the market and expand sales
through active and intentional initiatives. Along with ourexisting products and services, we will develop newones, promoting improvement and expanding sales. We
will also make capital investments to augment our capabilities and expand our scale and domains throughM&As, thereby expanding business value.

What the Oji Group
Aims For

Enhance Businesses and Increase
Business ValueAt the same time, we will also be promoting ongoing initiatives to thoroughly cut costs and strengthen our earnings base.

History of the Oji Group’s
Value Creation

Three Basic Policies for Long-term Vision

16

What the Oji Group Aims For
Message from the President

Encourage New Product Development
and Increase Business Valuealso boost the expansion of businesses which contributeto profits and appropriately address urgent environmental
issues. With regard to returns to our shareholders, ourbasic policy will be to continue to pay stable dividends
over the long term. We will also consider gradually increasing dividends in light of the status of our profits andfinancial position.
The first three years of our Long-term Vision are an extremely important period which will influence what comes
after. We will be focusing heavily not only on achieving ourtargets but also the processes which lead to their achievement. How do we execute our plan and, once it is in motion, how do we look back; identify issues; and, whennecessary, correct our course to put ourselves back on
track to achieve it? Further, amid the drastic changes thebusiness environment continues to undergo, what things
can we do that will be effective in bringing the Oji Group
closer to our long-term goals? We will be encouraging allof our officers and employees to seriously think about
these questions and to work together in answering themas we steadily move forward one step at a time.

Toward Realizing a Brighter Future Filled with HopeThe Next 10 Years Will Test Our
True ValueThe Oji Group Integrated Report 2022

Financial andNon-financial Data

As I stated above, in the 10 years since we transitioned to a holding company structure, the Oji Group has
achieved significant growth. However, in terms of whether we have fully shifted our mindset from business management premised on an ever-growing economy tobusiness management adapted to the environmental
changes which have occurred thereafter, I feel that wehave not 100% achieved this change in awareness. Moving forward, we must fully initiate a complete mindset
shift in the Group and, at the same time, complete thetransformation of our business structure before developing our businesses even further.
As a means of addressing environmental issues, wewill build a carbon neutral business management systemand “execute” initiatives to preserve a healthy global environment. At the same time, we will “enhance” and “expand” our businesses and “encourage” the creation of

new value. Reflecting on these four keywords from another angle, they are none other than a continuation of
our Management Philosophy of “Creation of Innovative
Value,” “Contribution to the Future and the World,” and“Harmony with Nature and Society;” and are our Purpose—to contribute to society through management
rooted in forest resources—to be put into action. Will the
Oji Group be able to further grow and evolve over the
next 10 years? It will truly be a period which will test, as
well as a time for us to demonstrate, our true value.
As a corporation which develops and shares its prosperity together with our stakeholders, the Oji Group aims
to continue to boldly take on new challenges and makeeven greater leaps forward. We hope that all of our stakeholders will pay attention to our future business development based on our new management strategy, and welook forward to your further support and patronage.

Sustainability Strategy

The Oji Group Integrated Report 2022

0.7 times maintained(End of March 2022: 0.7 times)

Governance Strategy

17

more, an overseas sales ratio of 40%, and a net D/E ratio
maintained at 0.7 times.
Some targets which were not achieved in the preceding FY2019–2021 Medium-term Management Plan, suchas our target for consolidated operating profit, were carried over unchanged in our current plan. However, theabove targets are of a level we intend to achieve as abare minimum. During the previous Medium-term Management Plan, the COVID-19 pandemic resulted in a dramatic environmental change that was impossible topredict when the plan was released in May 2019. Thischange had a profound impact on product sales as wellas on the progress of strategic investments. From theformulation stage of the FY2022–2024 Medium-termManagement Plan, we had already accounted for a much
more severe business environment, such as dramatic exchange rate fluctuations and soaring raw material andfuel prices due to Russia’s invasion of Ukraine among
other events. These are targets which we will aim toachieve in a time of opacity and uncertainty, no matterthe business environment, and we will be selecting thebest course of action going forward.
To get into specifics, we will be making the investments needed in order to timely and steadily execute ourthree basic policies of “Initiatives for Profitability Improvement,” “Initiatives for Environmental Issues,” and “Initiatives for Product Development.” In accordance with ourintention to maintain a net D/E ratio of 0.7 times, we are
anticipating three-year cash flows of 600.0 billion yen.
We will be utilizing 550.0 billion yen of this for strategic
and upkeep CAPEX; and 50.0 billion yen for dividends.
While being selective about the areas we invest in, we will

Net D/E ratio— Profitability —We established our newest FY2022–2024 Medium-Term
Management Plan in order to serve as a milestone on theway to achieving our Long-term Vision for 2030 describedabove. The purpose of our three basic policies is to materialize the four keywords. In order to discuss the degree towhich we envision we will make progress toward their realization over the coming three years, let’s look at specificnumerical management targets.
Our numerical management targets consist of consolidated operating profit of 150.0 billion yen or more, profit
attributable to owners of parent of 100.0 billion yen or(Continue stable profit of100.0 billion yen or more)

Initiatives for Profitability
Improvement

A Growth Strategy Based on Our New Medium-termManagement Plan

100.0 billion yen or more

40%
(With a target of 50% in the future)— Green Innovation —sense,” “sensitivity to immorality” and “courage to takeaction.” Further, we will adhere to laws and regulations aswell as social norms, and strive to conduct our work
each day with a sincere attitude.
Safety is a fundamental principle in the Oji Group’sbusiness activities, and something which must always
and absolutely be a top priority. We aim for thorough andconsistent adherence to designated safety rules, and forzero accidents and zero disasters.
As I have repeatedly conveyed, Environment is an inextricable theme in our value creation, rooted as it is inforest and wooden resources. It is no exaggeration to saythat the future of the Oji Group rests on the degree towhich we are able to achieve harmony with the environment and realize sustainable business activities. We will
not stop at only preventing environmental incidents andproduct liability incidents; moving forward, we will continue to engage in sustainability initiatives.

Overseas sales
ratio

Initiatives for ProductDevelopment

In order to implement our Long-term Vision, and in orderto survive as an enterprise that is needed by and essential to the world, there are several necessary elements.
The key, I ultimately believe, is “people.” Focusing on cultivating the human resources that are the wellspring forvalue creation, leveraging the diversity and uniqueness ofeach individual employee while at the same time maintaining a work environment which enables them to enhance their capabilities and play an active role will lead toour growth as a corporation. An additional condition forour survival which we must preserve as the core of ourcorporate activities is the rigid pursuit of Compliance,
Safety, and Environment.
Compliance is a prerequisite for corporate social responsibility, and without it, it is impossible to build relationships of trust with our stakeholders. Through goodcommunication in the workplace, a good work environment, and improved work motivation, we will nurture allof our officers and employees to have “sound common

Profit attributable toowners of parent

150.0 billion yen or more

— Sustainability —A Foundation for Supporting Our Long-term Vision

Consolidated
operating profit

Initiatives forEnvironmental Issues

be working to make sure that we do not let this opportunity go to waste, from tackling innovation to securing sufficient sales for the products we develop.
The origin of our innovation lies in our 150-year historyof manufacturing. Its foundation is our forest and wooden
resources, as well as the technology and know-how wehave cultivated to create evenly thin products and for
placing coatings on them. Our paper business has
shrunk in accordance with the decline in demand fornewsprint and printing and communication paper. However, in looking at this business as the origin of our innovation, we can see that new innovation is an extension ofthis existing business.

What the Oji Group
Aims For

The third basic policy, as expressed by “encourage,” ourfinal keyword, involves further increasing the value of ourbusinesses by developing new products and materials
and introducing them to the world. In recent years, theshift to non-plastic materials to tackle the marine plastic
problem and the shift from fossil resources to renewable
resources have been accelerating. For the Oji Group,
which pursues innovation utilizing renewable wooden resources, this can be considered a huge opportunity for
growth lying right in front of us. In the near future, we will

Numerical Management Targets for FY2024

P35-40

History of the Oji Group’s
Value Creation

Initiatives for Product Development –Green Innovation–18

What the Oji Group Aims For

Long-term Vision & Medium-term Management Plan

Long-term Vision

Basic Policy of “Toward Further Growth and Evolution” to Achieve FY2030 Targets
P25-34, 81-92

Initiatives for Environmental Issues –Sustainability–

Long-term Vision

FY2022–2024
Medium-termManagement Plan

Long-term Goals:
Industrial materials business
Further expand & enhance packaging business in Southeast Asia, India & Oceania
Expand & enhance corrugated container business in Greater Tokyo area, Japan
Household and consumer products business
Enhance branding & expand sales of household paper products in Japan
Expand & enhance overseas disposable diaper business

Consolidated net
sales of 2.5 trillion
yen or more
FY2030 Targets

Based on our FY2021 results, we have increased our consolidated net sales target for FY2030 by over 1 trillion yen to 2.5
trillion yen or more.
Amid an anticipated contraction in demand for a portion of
our products, we will improve our profit ratio through means
such as cost reductions and improving operations. However,our goals go beyond that. In order to achieve further growthand evolution as the Group, we will expand promising businesses through strategic investment and M&As, including ourcorrugated container, household paper, disposable diaper, imaging media, and pulp businesses. At the same time, we will
focus our efforts on developing, commercializing, and expanding the sale of new and eco-friendly products, including in ourhigh performance film and renewable energy businesses. Further, through this process, we will aim to transform our portfolio
into one which meets the demands of the times.

Environmental Action Program 2030

Changes in Consolidated Net Sales

Sales target for FY2030¥600.0 billion

Long-term Goals:
Expand & enhance pulp business as a “comprehensive pulp manufacturer”
Expand renewable energy and other energy businesses
Expand lumber processing business

CENIBRA/Pulp Mill in Brazil

Development of new &eco-friendly products

Printing and Communications
Media Business+ ¥300 bil.

Long-term Goals:
Restructure production system and enhance competitiveness through collaboration with other group segments by maximizing the use of assets owned+ ¥400 bil.

We will strive for the optimum production system restructuring for the Group as a whole byassessing demand trends and continuing to implement thorough cost-cutting measures and,at the same time, by effectively utilizing owned assets such as pulp manufacturing facilities.

M&As

Responsible raw materials
procurement andmanufacturing

Strategic investments¥1.8 tril.

Sales forecast for FY2030+ ¥300 bil.

¥1.7 tril.

¥150.0 billion

Financial andNon-financial Data

The Oji Group Integrated Report 2022

Forest Resources andEnvironment Marketing Business

Two film machines are currently being installed at the Oji F-Tex Shiga Mill(scheduled to commence operation in March 2023 and November 2024)

Sustainability Strategy

19

We will aim to expand profitability by expanding sales of thin capacitor films for next-generation vehicles and other high-function and eco-friendly products; and by expanding ourimaging media business, which is experiencing strong demand, through means such as
construction to expand production.

Increase from FY2021

Development of Trusting
Relationships with Our
Stakeholders

Environmental Action Program 2030
https://ojiholdings.disclosure.site/en/themes/150/

Long-term Goals:
Actively develop high-function and eco-friendly products
Expand global sales of imaging media business and enhance competitivenessincluding printing and converting— Profitability —¥2.5 tril.

Sustainable forest management(forest recycling)

Expansion of products that
contribute to a decarbonizedsociety
Zero environmental incidents
and zero product liability
incidents¥400.0 billion

Initiatives for Profitability
Improvement

Challenge for zeroenvironmental impact
Biodiversity conservation

Sales target for FY2030

In addition to expanding and strengthening our global pulp business, we will focus ourefforts on expanding other businesses which leverage forest resources such as our lumber processing and biomass power generation businesses.

Resource recycling (paper
and water recycling)
Consideration for Ecosystem

Functional Materials BusinessGovernance Strategy

In our Environmental Action Program 2030, we set a target of
reducing our greenhouse gas (GHG) emissions by at least 70%
in FY2030 compared to FY2018 levels, as a milestone for ourtarget of net-zero carbon in 2050 per our Environmental Vision
2050. The breakdown of this 70% reduction consists of a 20%
GHG emission reduction from increasing our usage rate of renewable energy such as reducing coal consumption and installation of private solar power panels; and the remaining 50%
reduction will be achieved through increasing the net incrementin carbon stocks by forests by expanding our forest plantations. By FY2030, we plan to invest 100.0 billion yen into eachof these areas for a total investment of 200.0 billion yen.
In addition to our initiative to realize carbon neutrality, we
will also be fully engaging in a wide range of initiatives indivisible from our business activities as outlined in our Environmental Action Program 2030.

Sales of “nepi eco” brand, eco-friendly products to be expanded— Green Innovation —Consolidated Net Sales of 2.5 Trillion Yen or More

Initiatives for ProductDevelopment

To Achieve Environmental Action Program 2030

Abundant Forests Creation
and Resource Recycling

United Kotak’s new plant in Malaysia (commenced operation in July 2022)

Within our industrial materials business, demand for our corrugated container businessremains robust. We aim to further expand and strengthen this business through M&As
and new plant construction and, at the same time, by promoting restructuring of production systems and the integration of base paper processing. We will also be focusing ourefforts on expanding our liquid packaging carton and filter businesses. In our household
and consumer products business, we will expand our Japanese market share by increasing the value of our domestic household paper business, and expand and strengthen our disposable diaper business overseas.

Targets We Aim to Achieve in FY2030

Action on Climate Change
Reduce greenhouse gas(GHG) emissions by at least
70% compared to FY2018¥1,250.0 billion— Sustainability —PurposeSales target for FY2030

Initiatives forEnvironmental Issues

Management
Philosophy

The course we should take to realize our long-term goals
Basic Policy of “Toward Further Growth and Evolution”
1. Initiatives for Environmental Issues –Sustainability–
2. Initiatives for Profitability Improvement –Profitability–
3. Initiatives for Product Development –Green Innovation–

Household and Industrial
Materials Businesses

To achieve
Environmental
Action Program
2030

What the Oji Group
Aims For

P41-60Initiatives for Profitability Improvement –Profitability–

History of the Oji Group’s
Value Creation

In order to continuously increase corporate value in an ever-changing society, the Oji Group has formulated and is
implementing its FY2022–2024 Medium-term Management Plan as well as its Long-term Vision for FY2030 that
promote the Group reaching its long-term goals based on its Management Philosophy and Purpose.

The #L-1 machine (for containerboard) at the Oji Paper Tomakomai Mill¥1.5 tril.
FY2021 FY2022

FY2024FY2030Initiatives for Product Development –Green Innovation–

P35-40The Oji Group Integrated Report 2022

20

What the Oji Group Aims For
Long-term Vision & Medium-term Management Plan
■ Net sales (left axis) ■ Operating profit (right axis)

Medium-term Management Plan

Sales composition by business segment (pie chart)*

Based on the initiatives it has implemented to date, the Oji Group formulated its FY2022–2024 Medium-termManagement Plan to serve as a milestone for its Long-term Vision for FY2030.

36.4%
12.7%
16.1%
18.7%
16.1%

2,000

1,600

1,485.9

1,439.9

1,551.0

70.2

400

120.1

28.2%

29.9%

120

105.0
84.8

32.0%

40.0%

38.7%

106.1

33.5%

80

29.3%

22.8%

20.3%
FY2013

FY2014160

40

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2024(Target)0*Sales composition by business segment is calculated excluding adjustments (adjustments for internal transactions, etc.)

Review of Medium-term Management Plans and their Policies
FY2013–2015

Consolidated operating
profitOverseas sales ratio
ROE
Interest-bearing debts

Targets

Results¥90.0 billion¥72.0 billion

26.0%
7.0%
¥700.0 billion

27.8%
2.1%
¥777.7 billion

Consolidated operating
profitOverseas sales ratio
ROE
Interest-bearing debts

Targets

Results¥100.0 billion¥110.2 billion

35.0%
8.0%
¥700.0 billion

32.0%
7.7%
¥620.6 billion

Numerical Management
Targets

Targets

FY2022–2024
Results

Numerical Management
Targets

Targets

FY2022 Plan

Consolidated¥150.0 billion or more ¥120.1 billion
operating profit
Overseas sales ratio
40.0%
33.5%
ROE
10.0%
10.9%
Net D/E ratio
0.7 times maintained
0.7 times

Consolidated¥150.0 billion or more ¥105.0 billion
operating profit
Overseas sales ratio
40.0%
38.7%
Profit attributable to ¥100.0 billion or more ¥70.0 billion
owners of parent
Net D/E ratio
0.7 times maintained
0.7 times

Basic Policies
Expansion of overseas businesses
Concentration / advancement of domestic
businesses
Enhancement of financial foundation

Basic Policies
Profitability improvement of domestic business
Expansion of overseas business
Promotion of innovation
Contribution to a sustainable society

Basic Policies (Long-term Vision & Mediumterm Management Plan)

Review

Review

Review

Key Initiatives

Due to the effects of the COVID-19 pandemic (delay of capital
investments and subsequent effects, etc.) as well as soaring
raw material prices, we failed to reach our target for
operating profit in FY2021, yet achieved record-high profits.
We strengthened and expanded our growth businesses inJapan (corrugated container, household paper, and renewableenergy businesses) and overseas businesses.
We proactively developed our themes for innovation:“Eco-friendly materials and products,” “entry into medical
field,” and “total solution.”
We formulated our Environmental Vision 2050 and Environmental Action Program 2030.

In response to the increasing importance of addressing
environmental issues, implement our Environmental Vision
2050 and Environmental Action Program 2030 action plans.
Make effective use of own facilities, promote further
production system restructuring.
Implement strategic investments and M&As, etc. in order tofurther expand promising businesses in Japan and overseas
businesses.
In addition to developing new materials and products,
accelerate rapid commercialization initiatives with regard to
our green innovation themes: “Development of new materials
derived from wood fiber,” “challenge to the medical andhealthcare field,” and “development of eco-friendly papermaterials.”
The Oji Group Integrated Report 2022

Financial andNon-financial Data

The Oji Group Integrated Report 2022

We reached our target of 100.0 billion yen for operating profit
in FY2018. We also achieved our target of reducing interest-bearing debts to 700.0 billion yen.
We aimed to optimize and enhance production capacity andto expand overseas manufacturing sites with a focus on our
packaging business, increasing our overseas sales ratio by
4.2 percentage points, from 27.8% in FY2015 to 32.0% in
FY2018.
In Japan, we continued to focus on increasing profitability
through cost reductions and production system restructuring,and on developing new added-value materials and new
businesses, such as cellulose nanofibers (CNF) and our water
treatment business.

Initiatives for environmental issues –Sustainability–
Initiatives for profitability improvement –Profitability–
Initiatives for product development –Green Innovation–

Sustainability Strategy

Basic Policies
Deepening of the core businesses
Development of new businesses andproducts
Further expansion of overseas businesses

FY2015 operating profit increased significantly from FY2012
by 28.5 billion yen; however, in part due to increased raw
material prices and impairment losses recorded in someoverseas businesses, we did not achieve our targets for
operating profit or ROE.
After transitioning to a holding company structure in October
2012, we promoted business structure transformation. We
particularly proactively developed overseas businesses, andour overseas sales ratio increased by 11.1 percentage points,from 16.7% in FY2012 to 27.8% in FY2015.
In Japan, we focused on increasing profitability through cost
reductions and production system restructuring, and on
developing new added-value materials and new businesses,
such as dissolving pulp (DP) and our energy business.

21

Numerical Management
Targets

FY2019–2021

Governance Strategy

Numerical Management
Targets

FY2016–2018— Profitability —FY2022(Plan)

Initiatives for Profitability
Improvement

0

70.8

27.8%

150.0

1,470.2— Green Innovation —

57.3

31.0%

1,800.0

1,700.0

Initiatives for ProductDevelopment

43.9

110.2

(¥billion)— Sustainability —800

1,507.6

Operating profit

200

1,359.0

1,200

72.0

40.3%
10.6%
18.1%
14.0%
17.0%

Initiatives forEnvironmental Issues

1,347.3

1,332.5

1,433.6

41.9%
11.0%
20.0%
11.9%
15.2%

What the Oji Group
Aims For

37.2%
12.3%
17.9%
16.6%
16.0%

Net sales(¥billion)

Overseas sales ratio

History of the Oji Group’s
Value Creation● Household and Industrial Materials ● Functional Materials● Forest Resources and Environment Marketing Business● Printing and Communications Media ● Others

22What the Oji Group Aims For
Long-term Vision & Medium-term Management Plan

15.2%
15.7%

FY2022–2024 Medium-term Management Planfrom a Financial Perspective

Director of the Board, Executive Officer,
Oji Holdings Corporation

15.3¥105.0 billion
8.0

71.0

26.1

10.0
18.0

FY2021 Results

FY2022 Plan

75.5

17.5
42.0

(2.0)

¥1,470.2 billion

Strategic CAPEX(End of March 2022: 0.7 times)¥600
billionUpkeep CAPEX¥150 billion
Dividends

Financial andNon-financial Data

Capital Allocation
Intending to maintain our current net D/E ratio of 0.7 times,
we will proactively allocate cash flows generated frombusiness operations, etc. to environmental measures andinvestments in businesses with promising futures. Morespecifically, we are anticipating cash flows from the threeyear period up to FY2024 of approximately 600.0 billion
yen, of which approximately 400.0 billion yen, excluding
dividends and upkeep CAPEX, will be used for strategic
investments.
Of our 400.0 billion yen in strategic investments, weplan to invest 50.0 billion yen in environmental measures.

¥400 billion

Examples of Expanded
CAPEX to Growing
Segments
Build corrugated container
plants in Japan/overseas
Install adult disposable diaper
machineInstall film facilities for next
generation vehicles
Install biomass power plants
Construction to improve pulp
business profitability

Sustainability Strategy

0.7 times maintained

Out

Corporate Communication as Financial Strategy
The Oji Group proactively shares and discloses information
to investors, analysists, and its shareholders, including financial results and other financial information, and non-financial information such as ESG data through means
which include its IR page, Integrated Reports, and Sustainability Reports (online). The Group also strives to build
relationships of trust and achieve mutual understanding
through engagement with institutional investors as well asinterviews with analysts. Through these activities, the Oji
Group promotes its activities.
With regard to returns to the shareholders who support
the Oji Group, it is our fundamental policy to maintain stable dividends while at the same time giving consideration
to internal reserves in order to prepare for future management measures. Based on this policy, we have decided to
pay an ordinary dividend of 16 yen per share for FY2022,
an increase of 2 yen over the previous fiscal year. We will
also continue the shareholder benefits program we introduced in the previous fiscal year.

Governance Strategy

In

under current Medium-term Management Plan are expected to be effective from the next Medium-term Management Plan onward. In order to achieve our long-termgoals, what we do now is extremely important, and we will
be implementing various measures based on our basic
policies without delay.
For business investments, we confirm the profitability of
an investment in consideration of our cost of capital andother factors, and make investment decisions through appropriate risk-taking. We will also focus on innovations thatwill open up the future of the Group, based on their future
potential, although the effects of such investments cannot
be expected to be realized overnight.
Note that the Group’s capital condition is being centrally
managed by Oji Holdings. In accordance with the acceleration in our global expansion, the amount of funds generated from our overseas businesses and companies isincreasing year by year. At the same time, the number ofoverseas business opportunities to invest in has also increased. We will be engaging in efficient, global fund management, allocating surplus funds from our overseas
businesses and companies to investment in opportunities
in their regions.

— Profitability —FY2022-2024 Financial and Investment Plan

Others

Initiatives for Profitability
Improvement

Consolidated
150.0 billion yen or more
operating profit
Profit attributable
100.0 billion yen or more
to owners of(Continue stable profit of 100.0 billion yen or more)parentOverseas sales
40%
ratio
(With a target of 50% in the future)

In order to achieve our greenhouse gas reduction target (areduction of at least 70% in FY2030 compared to FY2018
levels) in our Environmental Action Program 2030, we haveannounced that by FY2030, we will invest 100.0 billion yen
each, for a total of 200.0 billion yen, in expanding our forest plantations, and in reducing emissions by converting
coal-fired boilers to gas-fired ones and by installing private
solar power systems. We plan on investing one fourth of
this in the three-year period up until FY2024.
We will allocate the remaining 350.0 billion yen in promising businesses—such as our domestic and overseas
corrugated container, high performance film, biomass
power generation, and pulp businesses—to expand andstrengthen them through M&As as well as construction of
new facilities and plants. We will also allocate part of thisamount to create new core businesses through the development of new materials and products.
The projects we have announced so far are only a partof the list, and we have also secured investment funds forother projects currently being considered or will be investigated moving forward.
Our Numerical Management Targets for FY2024 are already achievable solely through the measures in progress,
and the measures to be implemented by the investment

FY2024 Plan

Household and Industrial Materials Functional Materials
Forest Resources and Environment Marketing Business Printing and Communications Media— Green Innovation —Numerical Management Targets
The environment surrounding us is undergoing bewilderingchange. The changes occurring in the demand structure,
ongoing since before the previous Medium-term Management Plan was formulated and implemented, became visibly more striking through the spread of COVID-19. This
has required us to further transform our portfolio based on
an assessment of promising businesses where demand is
expected to increase and businesses where demand isforced to shrink. Additionally, increasing attention being
paid to climate change and other environmental issues iscreating even greater need for business activities whichgive thought to the global environment.
Against this backdrop, we formulated our new Longterm Vision for FY2030, as well as a new Medium-termManagement Plan for the first three years of this vision
spanning from FY2022 to FY2024. For FY2024, the final
year of this new Medium-term Management Plan, we have
set the following numerical management targets.

¥1,800.0 billion

Initiatives for ProductDevelopment

Financial Strategy under FY2022–2024 Mediumterm Management Plan

¥1,700.0 billion

FY2024 Plan

— Sustainability —The Oji Group Integrated Report 2022

5.4
17.8

55.5

FY2022 Plan

FY2021 Resultsmaterials and products and other initiatives in order tocontribute to the resolution of global issues such as climate change and marine plastic pollution.

Net D/E ratio¥120.1 billion

8.0
7.0

Initiatives forEnvironmental Issues

During the previous Medium-term Management Plan
spanning from FY2019 to FY2021, the Oji Group positioned “profitability improvement of domestic business,”“expansion of overseas business,” and “promotion of innovation” as the basic policies of its management strategy
and, through the policy of “contribution to a sustainable
society,” the Group aimed to become a global corporategroup that maintains stable consolidated operating profitof 100.0 billion yen or more. Under these basic policies,
the Group has operated business with the performancetargets for FY2021 of “consolidated operating profit of150.0 billion yen or more”, “overseas sales ratio of 40%”,“ROE of 10.0%”, and “net D/E ratio of 0.7 times”.
Per our results for FY2021, our consolidated operating
profit was 120.1 billion yen, our overseas sales ratio was
33.5%, our ROE was 10.9%, and our net D/E ratio was
0.7 times. In spite of stagnant economic activity and delayed recovery resulting from the spread of COVID-19, weenhanced our profitability through such means as continued cost reductions, production system restructuring inJapan, and effective utilization of facilities in our possession. As a result, we achieved our ROE target.
Cash flows from operating activities, generated throughbusiness management based on our basic policies, were
proactively invested in promising businesses and researchand development activities. While maintaining a net D/E
ratio of 0.7 times, during the previous Medium-term Management Plan, capital investments and loans were 452.5
billion yen, and research and development costs were28.0 billion yen.
Capital investments and loans were utilized in Japan tostrengthen containerboard and its processing, household
paper, and biomass power generation businesses, as wellas in a business partnership with Mitsubishi Paper Mills
Limited. Overseas, they were utilized to expand our packaging, disposable diaper, and thermal paper businesses,
and for construction to increase the profitability of our pulp
business. Further, through the acquisition of additional
shares, we increased our voting rights ratio to 100% for
CENIBRA in Brazil (engaged in pulp manufacturing andsales) and Oji FS in New Zealand (engaged in pulp andcontainerboard manufacturing, processing, and sales) in
FY2021.
In our research and development activities, we proactively involved ourselves in the development of eco-friendly

14.0%

18.1% 10.6%
20.2%
10.8%
20.0%
11.0%

Akio Hasebe

A Review of the Previous Three-year Mediumterm Management Plan

23

11.9%12.8%

40.3%¥150.0 billion

What the Oji Group
Aims ForWe will aim to achieve the new
Medium-term Management Plan by
optimizing the Group’s businessportfolio through its financial strategy

17.0%

41.9%
40.4%

Operating Profit by Business Segment
History of the Oji Group’s
Value Creation

Consolidated Net Sales and Sales Composition by
Business Segment

Message from the Director in Chargeof Finance¥50 billion
The Oji Group Integrated Report 2022

24

Initiatives for Environmental Issues –Sustainability–

Action on Climate Change

FY2013

7,773 kt

Greenhouse gas (GHG)
emissions

7,836 kt
Environmental Action Program 2030

April 2016 to March 2021 (Action period)

Established in September 2020

FY2020 Major Results

2. Abundant forests creation and resource recycling

Promoting effective use of waste (domestic)
FY2013 96.6%

FY2020 98.8%(see pages 31 to 32)

We will promote sustainable forest management and resource recycling
and seek to maintain and conserve the multi-functionality of forests andsustainably use resources.

FY2020 68.5%

2,351 kt

Reduce greenhouse gas (GHG) emissions to virtuallyzero
Aim for a recycling-oriented society

Harmony with nature and society

Aim for a society in harmony with nature by seeking
to conserve biodiversity and reduce our impact on
the environment

Environmental Vision 2050
https://ojiholdings.disclosure.site/en/themes/191/themes/191/

Net Zero

4. Development of trusting relationships with our
stakeholders

We will expand procurement that considers the environment andsociety, manufacture products that contribute to a decarbonized society,and conduct business activities in compliance with environmental laws
and regulations.

2015

2018

2050

Sub-category

Improve energy Maintain energy
efficiency
conservation
Reduce coal consumption
Install private solar powersystems, etc.

Subtotal(kt-CO2e)

GHG reduction

200

2.6%

1,007

12.9%

360

4.5%

1,567

20.0%

2022

2023

2024

2025

2026

2027

2028

2029

Technologicalresearch

Development

Investment
decisions

50.0%

8,000

11.3%
7,606 reduction

7,836

6,953

Installations
6,000

4,000

400,000 ha

Search for sites,
land surveys

Assessment ofbusiness feasibility

Consideration of
acquisition, decision

2,000

0

-653
Continue forest tree breeding (breed improvement) and elite trees’ plantation

Plant fast-growing trees

In FY2021, the net GHG emissions werereduced by 11.3% compared to the GHG
emissions in the base year (FY2018).
(kt-CO2e/year)

Installations

Consider fuel conversion for 12 coal boilers in Japan
Installation
Investment
planning
decisions
Consider installation of private solar panels

FY2021 Net GHG Emissions Results-2,000FY2018(base year)

FY2021

GHG emissions (Scope 1 + 2)
The net increment in carbon stocks by forests

Total

5,485

70.0%

Financial andNon-financial Data

3,918

2030

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

Overseas
production
forests
256,000 ha

Expand forest plantations
Invest in forest
conservationand plantation

2021

Sustainability Strategy

Increase thepercentage of
renewableenergy use

GHG reduction

Governance Strategy

The Oji Group Integrated Report 2022

Category

Expansion of net increment incarbon stocks by forests

25

2030

Roadmap toward Achieving Reduction Targets for FY2030

GHG emissions reduction

The Oji Group established Environmental Charter in 1997 with the philosophy of maintaining and developing our corporate activities in harmony with the environment from a wide global perspective andcontributing to the realization of a truly affluent society. Toward realizing
this philosophy, we formulated Environmental Action Program for theperiod of five years being the target achievement period. We haveworked to ensure compliance with environmental regulations, address
climate change issues, implement sustainable forest management, effectively utilize resources (improve recovered paper utilization ratio), reduce substances of environmental concern and wastes, and build
trusting relationships with stakeholders. In 2019, we formulated andimplemented the Medium-term Management Plan for FY2020 being thetarget achievement year by expressly positioning “contribution to a sustainable society” as the foundation supporting business continuity andgrowth.
Furthermore, in September 2020, to further strengthen our initiatives
for “harmony with the environment,” and “contribution to a sustainable
society,” we formulated our Environmental Vision 2050, which centersaround our goals of “net-zero carbon” and “harmony with nature andsociety,” and also Environmental Action Program 2030, which functions
as a milestone on the way to the Vision. As for climate change issues,
we continue to work to reduce GHG emissions through coal consumption reduction, preserve forests including conservation of biodiversity,and increase the net increment in carbon stocks by forests based on theroadmap to 2030.

2020— Profitability —2013

Initiatives for Profitability
Improvement

Environmental Action Program 2030
https://ojiholdings.disclosure.site/en/themes/150/— Green Innovation —We will endlessly challenge ourselves to achieve zero environmental
impact and will seek to conserve and protect biodiversity.

FY2030Net-zero carbon

Initiatives for ProductDevelopment

3. Consideration for ecosystem (see pages 33 to 34)

Recovered paper utilization ratio
FY2013 62.7%

We aim for net-zero carbon emissions by FY2050, approaching the CO2
absorption and fixation by forests through forest conservation andplantation, a business transformation, a thoroughgoing reduction ofenergy consumption in manufacturing and transportation operations,and increasing usage of renewable energy.

Breakdown-50% from CO2 absorption andfixation by forests-20% from greenhouse gas (GHG)
emissions reduction— Sustainability —1. Action on climate change (see pages 25 to 30)(5,485 kt) reduction

Initiatives forEnvironmental Issues

1. Ceaseless effort to achieve a zeroenvironmental impact
2. Responsible raw materials procurement
3. Sustainable forest management

Environmental
Vision 2050

What the Oji Group
Aims For

Environmental Action Program 2020

70%

History of the Oji Group’s
Value Creation

FY2018(FY2018 to FY2021 average)

Net GHG emissions

The Oji Group Integrated Report 2022

26

Initiatives for Environmental Issues –Sustainability–
Action on Climate Change

GHG Emissions Reduction

Expansion of Net Increment in Carbon Stocks by Forests

In Environmental Action Program 2030, we have set a target of reducing GHG emissions by 20% (1,567 kt-CO2e)
compared to the base year (FY2018). In order to achieve the target, we take continuous measures to improve energy
efficiency (reducing energy consumption intensity by thorough energy conservation) and increase the renewable energy usage rate (such as reducing coal fuel consumption and installing private solar power systems).

In Environmental Action Program 2030, we have set a target of absorbing and fixing the equivalent of 50% (3,918 ktCO2e) of GHG emissions in the base year (FY2018). Accordingly, we are aiming to expand our overseas forest plantations to 400,000 ha by FY2030.

Consumption (crude oil conversion)(1,000 kL oile)

Intensity per unit of net sales(kL oile / ¥ mil.)
7.00

7,000
6,000

5,874

5,822

5,660

5,219

6.00

5,400

5.00

5,000

4.00

4,000

3.95

3,000

3.75

3.84

3.75

3.67

3.00

2,000

2.00

1,000

1.00

0

0.00

Fossil fuels

Fuels made from waste

FY1990FY2005
FY202153.0%
32.4%*3

0.0%

9.0%
12.9%

20.0%

We own 15 coal-fired boilers in Japan (actual number at the end of
FY2021) and are examining the possibility of fuel conversion for 12 ofthese, not including backup boilers, etc. We implemented equipment
and technological research in connection with fuel conversion on 3
coal-only-fired boilers, and expect the fuel conversion will help
achieve approximately 1,000 kt-CO2 reduction.

100% of the electricity used at the plant during thedaytime will be supplied by solar power.

27(630 t-CO2/year)

The Oji Group Integrated Report 2022

Investment inconnection withcoal reduction
Approx.

100 billion yen(by 2030)0

141,000 ha

Target area of overseas production
forests

400,000 ha

400,000 ha by FY2030

176,000 ha

176,000 ha

FY2021 results

FY2030 targets

Investment in connection
with acquisition

Conservation
forests

141,000 ha

Production
forests overseas

256,000 ha

Production
forests in Japan
Annual net
increment incarbon stocks
by Oji Forests

141,000 ha

653(kt-CO2e/year)

4,000(kt-CO2e/year)

Plant fast-growing trees
The Oji Group’s overseas forest plantation business is planting
fast-growing trees, including hardwoods such as eucalyptus
and acacia as well as softwoods such as radiata pine. We
harvest and replant trees in a shorter cycle than general forestry practices, for example, in a 6-to-10-year cycle for eucalyptus and acacia and in an approximately 30-year cycle forradiata pine.
In addition, CENIBRA, Brazil, has long been breeding forest trees. Approximately 15 types of high-quality varieties withhigh growth rate and pulp productivity were selected fromamong more than 20 thousand trees obtained through artificial pollination efforts. KTH, Indonesia and other companies
also continue to breed forest trees. We are aiming to improve

Approx.

100 billion yen

Artificial pollination of eucalyptus

Tree nursery, CENIBRA

Financial andNon-financial Data

1,850 kW573,000 ha

100.0%(Installation at Oji Container / Tochigi Plant, Oji Materia / Kushiro, Sofue and Saga Mills are under consideration.)

Scheduled commencement
March 2023of operation

GHG reduction

80.0%

Installation of private solar power systems

Overview of Solar Power at Tochigi Plant,
Oji Container
Panel capacity

60.0%

Expand forest plantations
As of March 2021, preliminary calculations suggest that the expenses associated with expanding our overseas forest plantations to
400,000 ha by FY2030 will amount to approximately 100.0 billion yen. As a result of this expansion, the total area of Oji Forests (production forests and conservation forests) will be 717,000 ha in FY2030.

Sustainability Strategy

New installation ofsolar power

40.0%

28.0%
35.0%
38.0%
54.7%

Annual CO2 emissions
with felling

Future initiatives
In order to expand the net CO2 absorption, we will move forward to further acquire forest plantations in South America, Oceania,
Southeast Asia, etc. where we are already operating, and facilitate CO2 absorption by developing better fast-growing trees whileplanting and cultivating fast-growing trees suitable for the regions where we operate the forest plantation business.

*3 Breakdown: Coal 13.0%, gas 7.6%, oil 5.9%, and purchased energy 5.9%

Future initiatives

Status of examining
ways to reduce coalconsumption

Renewable fuels

1.0%
1.0%

71.0%
64.0%

FY1980*1 The CO2 stocks in Oji Forests*2 The annual average net increment in carbon stocks by forests between FY2018 and FY2021.
We have applied the gain-loss method as a method of calculating net increment in carbon stocks by forests (and the stock difference method for CENIBRA, Brazil, startingfrom FY2021).
CENIBRA has obtained assurance of the net increment in carbon stocks by forests in
FY2021 from a third party organization.

Governance Strategy*1 Renewable fuels: Organic energy and resources derived from renewablebiological sources (such as wood) except for fossil resources.
*2 Black liquor (black vegetative waste fluid): Black vegetative waste fluidthat remains after removing wood fibers in woodchips in the process ofmaking pulp from woodchips (kraft pulping process). Its components include lignin and hemicellulose.

Changes in Fuel Composition Ratio

Net increment incarbon stocks byforests:
653 (kt-CO2/year)*2— Profitability —Results
The Oji Group has been encouraging to reduce fossil fuel ratioby using renewable fuels*1 such as black liquor*2, wood residue and bark. Renewable fuels accounted for 54.7% in
FY2021.

The actual carbon
stocks by forest*1:
109,000 kt-CO2

Initiatives for Profitability
Improvement

Increase the Percentage of Renewable Energy Use

The amount ofcarbon fixed byannual tree growthis converted to CO2(tons).

— Green Innovation —increase of energy consumption intensity, we will take continuous measures to address energy conservation by suspending surplus equipment and ensuring consistent power andsteam saving.

Annual CO2 absorption
with growth

Initiatives for ProductDevelopment

2017
2018
2019
2020
2021 (FY)A star mark indicates that FY2021 figure for energy consumption
has been assured by KPMG AZSA Sustainability Co., Ltd. For the
calculation method, see page 107.

Results
The Oji Group owns a total of 573,000 ha of forests, comprising production forests totaling 432,000 ha in Japan andoverseas and conservation forests of 141,000 ha, andpractices sustainable forest management taking into consideration the environment, society and economy. The annual average net increment in carbon stocks by forests (ourproduction forests and conservation forests) between
FY2018 and FY2021 was 653 kt-CO2, while the actual carbon stocks in living biomass reached 109,000 kt-CO2 at theend of FY2021.

— Sustainability —Future initiatives
The Oji Group has positioned energy conservation as a crucial
topic and takes continuous measures to address it. For example, our mills/plants regularly hold energy conservation meetings, attended by personnel from energy management andmanufacturing divisions. Various ideas including equipment
update and change in equipment operation method are discussed. Although a lower production volume leads to theEnergy Consumption and Intensity

Initiatives forEnvironmental Issues

Results
We set a target of reducing energy consumption intensity by 1
% per year for the 5-year average, and the average energy
consumption intensity for FY2017 to FY2021 reduced by 1.8%.
In FY2021, domestic business companies whose energy
consumption accounts for approximately 50% of the total energy consumption across the Oji Group made energy conservation investments of 1.3 billion yen, thereby reducing energy
consumption corresponding to approximately 1% of the totalenergy consumption across the Group (crude oil conversion
47 thousand kL).

What the Oji Group
Aims For

Invest in Forest Conservation and Plantation

Improve Energy Efficiency

History of the Oji Group’s
Value Creation

Initiatives toward Achieving Targets for FY2030

growth rate of forest trees and facilitate CO2 absorption byplaning high-quality tree species developed by each business.

The Oji Group Integrated Report 2022

28

Initiatives for Environmental Issues –Sustainability–
Action on Climate Change

The Oji Group announced its support for the Task Force on Climate-related Financial Disclosures (TCFD*) in December 2020, and is working on climate-related information disclosure recommended by the TCFD.

Governance

Sustainability Promotion Structure
Board of Directors
Development
andsupervision

Sustainability Committee

Key issues Discussion
discussion andand reporting reporting

Group Management Meeting
Discussion
and reporting

Chairman: Representative Director of the Board, President(Group CEO)
Committee: General Manager, Corporate Sustainability Div.
General Manager, Corporate Governance Div.
President of each COMPANY
Director of the Board, Oji Holdings Corporation appointed
by Group CEO
Secretariat: Corporate Sustainability Dept.

Corporate Governance Div.

Corporate Sustainability Div.

Risk Management
With assistance from external experts, the Secretariat of the
Sustainability Committee examines the importance, priority
and impact of climate-related risks on our business on agroup wide basis, and the Sustainability Committee held on asemi-annual basis manages progress and deliberates on

Indicators and Targets

Innovation Promotion Div.
Oji Management Office Human Resources Div., Financial Div., Corporate Planning Div., Oji
Business Center, Oji Engineering Sales and Engineering Div., Oji Green Resources Forest
Resources and Environment Marketing Div.

Tightened CO2 emissions regulations

Transition risks

Increasing stakeholders’ interest in
low-carbon products and services

Reputation

Negative feedback from stakeholders

Acute

Increasing severity of extreme weather
eventsOpportunities

Energy sources
Products andservices

Use of low emission sources of energy• Changes in consumer preferences• Development of new products andservice through R&D and innovation

Strategies and countermeasures

Small

•

Medium* Small* Medium* Small*

•

Small

Small

Small

Decline in demand for paper products because of the impression that
unnecessary tree felling facilitates global warming
Lower evaluation and difficulty in obtaining financing due to a failure to respondto investors’ request

Medium Medium

Small

Small

Business stagnation such as facilities affected by and supply chain disruptions
caused by, a large scale natural disaster

Small

Small

Small

Small

Increase in procurement costs primarily as a result of deterioration of growth
conditions for trees, key raw materials for our products

Small

Small

Large

Large

Increase in demand for advanced water treatment technology and water
management due to flooding, drought, precipitation fluctuations and higher
demand for clean water in water stress areas

Small

Small

Medium Medium

Increase in demand for renewable energy toward realization of a low-carbon society

Small

Medium

Small

Small

Increase in demand for low-carbon and environmentally-friendly products due toincreased awareness of decarbonization and environment

Large*

Large*

Large*•

Expansion of support for forest preservation activities under the forest usage andforestry promotion policy• Possibility that carbon credit trading associated with forest absorption after 2050
will increase the value of company-owned forests, and that requests for forest
management/assistance in management (providing know how) may increase

Small

Small

Small

Small

Optimize fossil fuel consumption and purchased electricity to reduce overall energy costs by working on energy conservation andoptimal operation of in-house power generation facilities
Enhance the operation of renewable energy sources such as hydro and biomass energy toward net zero carbon emissions in FY2050

Convert to renewable energy and other fuels that emit less CO2, and enhance energy conservation measures
Further promote resource-circulation, environmentally friendly business initiatives such as forest recycling and recovered paper recycling• Continuously disseminate information on the status of sustainable forest management initiatives to stakeholders• Promote the acquisition of forest certification such as FSC, etc., announcement of procurement policies, such as no illegal logging,and ensuring traceability of suppliers• Implement environmental education to communicate environmental friendly business activities in collaboration with environmental NPOs, etc.
• Be registered as Type I or Type II Registered Wood-related Business Entity as defined in the Clean Wood Act• (Plan to) conduct due diligence to prove the legality and verify the legality in connection with the procurement of wood raw materials
and biomass fuels• Formulate and regularly review a BCP, and enhance BCM• Keep abreast of and monitor the status of key raw materials• Enhance our relationship with suppliers, and stabilize procurement by diversifying suppliers••

Use of incentives

Small

MediumSmall

Investment in connection withcoal reduction

Approx. 100 billion yen
Investment in connection withacquisition of forest plantations

Approx. 100 billion yen
Financial Impact of Climate-related
Risks and Opportunities (2030)
Example of opportunities

Enhance stable procurement through procurement from multiple sources in North America, South America, Oceania, etc.
Expand and promote effective utilization of, company-owned forests• Conduct survey and research on impacts of temperature and precipitation on growth of trees, and select tree species suitable to the area

Green innovation
Increase in sales from theenvironmentally friendly business•

Further expand the water treatment business primarily by promoting the expanded service for the production of water for daily use
Propose innovative technology leading to the effective utilization of water resources

300 billion yen•

Promote the power generation business such as wind power generation and micro hydroelectric power generation

Large*•

Enhance the alternate use of biomass plastics made from biomass and the development of paper materials as an alternative to plastic
packaging, and expand sales opportunities

Small

•

•
•

•

•

Markets

Investment toward
Decarbonization

Plan and implement the management of company-owned forests in line with national and local governments policies• Maintain and improve productivity of planted trees by conducting research and technology development tailored to the relevant areas

Example of risks
Burden of carbon tax

39.7 billion yen*

Financial andNon-financial Data

Changes in precipitation and weather
patterns, and rising averagetemperatures
Effective resource utilization
Resource efficiency Reduction in water use andconsumption

Chronic

Impact on our business
1.5°C (2°C)
4°C scenario
scenario
2030
2050
2030
2050

Increase in costs related to procurement using fossil fuel-derived energy andelectricity due to changing energy mix
Increase in energy consumption and credit operating costs due to the introduction ofcarbon tax and tightening of regulations on emissions trading
Increase in boycott activities toward products and services that use fossil fuels
due to increased awareness of decarbonization among consumers•

We shut down the 3B boiler at the Nayoro Mill due to therestructuring of production systems

Sustainability Strategy

Physical risksMarkets

FY2050
Zero coal consumption

We conducted a fact-finding survey of GHG emissions in a
supplier sustainability survey

Governance Strategy

Fluctuation of fossil fuel-derived energy
pricesAwareness of business environment

Coal
consumption

FY2021
results— Profitability —Policies, laws andregulations

Driver (Factor causing an impact
on our business)

Reduction of GHG emissions throughcollaboration with suppliers

GHG emissions reduction
3.0%
Net increment in carbon stocks by forests 8.3%

* Including the net increment in carbon stocks by forests (see page 26)

TCFD-related Risks, Opportunities, Strategies and Responses
Type

SCOPE 3

11.3% down(compared to FY2018)

Initiatives for Profitability
Improvement

term (2050), and the Sustainability Committee deliberates on
the priority and importance of them.
Impacts of climate-related issues on our business, strategy
and finances are assessed quantitatively and qualitatively,

A 70% reduction by FY2030 andnet zero by FY2050*— Green Innovation —Strategy

SCOPE 1 + 2

scenario by the International Energy Agency (IEA). To increase
the probability of achiving them, we have organized a project
team and are working to reduce GHG emissions by reducing
coal consumption, etc. and expand actual carbon stocks byforest.

Initiatives for ProductDevelopment

COMPANY

Based on the 1.5°C target in the Paris Agreement, Environmental Vision 2050 and Environmental Action Program 2030,
we have set the following targets and are committed toachieving them. We have also established internal carbon
pricing (ICP) with reference to the Net Zero Emission (NZE)Group Companies

With assistance from external experts, the Secretariat of the
Sustainability Committee examines what impacts of climate-related risks and opportunities have on our business ona group wide basis in the medium term (2030) and in the longthem. Furthermore, climate-related risks are referred and reported to the Group Management Meeting and the Board of
Directors meetings, depending on the importance, thereby integrating them into a company-wide risk management.

— Sustainability —Development
andsupervision(held semi-annually)

Initiatives forEnvironmental Issues

The Oji Group recognizes initiatives for sustainability including
climate change issues as one of the important management
challenges. In FY2021, the following were deliberated on andapproved by the Board of Directors.
Establish the “Sustainability Committee,” which is chairedby the Representative Director of the Board, President andconsists of Directors of Oji Holdings Corporation and Presidents of all Companies, and the “Corporate Sustainability
Division,” which implements decisions made by the Committee in order to enhance initiatives for sustainability ingeneral including climate change
Strengthen initiatives for environment and society including
climate change issues and make necessary investments toensure sustainable growth and enhance corporate
resilience

consumption by using alternate fuels and develop wood-derived products as a plastic alternative.
From the results of risk analysis in FY2021, we recognizethat the impact of risks associated with the shift toward a decarbonized society on our business will be limited if we continue to implement thorough energy conservation, promote
the introduction of non-fossil fuels, and expand CO2 absorption and fixation by forests owned by the Group. We will continue to conduct risk analysis, and work to expand our forest
area and strengthen resilience.

What the Oji Group
Aims For* TCFD: Task Force on Climate-related Financial Disclosures
The TCFD is a task force established by the Financial Stability Board (FSB) at the request of G20
Finance Ministers and Central Bank Governors Meeting. In June 2017, the TCFD released its
recommendations that encourage companies to disclose the financial implications of climate-related risks and opportunities to help investors make appropriate investment decisions.

using several scenarios for 1.5°C (2°C) and 4°C. We recognize transition risks based on the 1.5°C (2°C) scenario (policy
ad regulatory risks including carbon tax) and physical risks
based on the 4°C scenario (changes in precipitation andweather patterns, etc.) as important.
In order to address a shift toward a decarbonized society,the Oji Group formulated our Environmental Vision 2050 with
our goal of “net-zero carbon,” and our Environmental Action
Program 2030, which function as a milestone to reduce GHG
emissions by 70% in FY2030 compared to FY2018. Towardachieving the goal, we are working to reduce coal

History of the Oji Group’s
Value Creation

TCFD* Established with reference to the Net Zero
Emission (NZE) scenario by the International
Energy Agency (IEA)* Impact amount Small: less than 10.0 billion yen Medium: not less than 10.0 billion yen but less than 50.0 billion yen Large: not less than 50.0 billion yen
Impact levels without asterisk mark (*) represent qualitative assessment.

29

The Oji Group Integrated Report 2022

The Oji Group Integrated Report 2022

30

Initiatives for Environmental Issues –Sustainability–

Abundant Forests Creation and Resource Recycling
Oji Forests

Production
forests

15

256

129

385

176

12

188

432

141

573

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.

(In the case of larch: 40
to 60 year until fullgrowth)Sawmill residue is madeinto woodchips, etc.

GrowthLumber, laminatedlumber, plywood, etc.

Cascading use of forest resources
The lumber, laminated lumber, and the raw materials for plywood
come from the thick trunk part of forest plantation trees. The
sawmill residue from the production of lumber, and the tips of
those trunks which cannot be used for lumber, are thoroughly
utilized as woodchips for paper manufacturing or biomass fuel.

Thinning

Sustainable forest management requires a mutual understanding between forest plantation companies and the local communities.
Also indispensable is their sharing of environmental, social, and economic benefits. To give an example of economic benefits, ouroverseas forest plantation companies have created approximately 15,000 jobs locally. Another such example is our technical training
primarily 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 and educational support in local communities, andassistance in areas that have poor access to medical services.

Sustainability Strategy—

2

Weeding

Sustainable Forest
Management

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

Supporting beekeeping in conservation forests at
CENIBRA

Supporting health education on how to care forteeth and mouth at CENIBRA

Active Utilization of Forest Certification Programs

31

The Oji Group Integrated Report 2022

Pan Pac, New Zealand

In Oji Forests of 573,000 ha, we actively utilize forest certification programs* to implement appropriate forest management that considers the environment, society, and the economy, including conservation forests. The forest certification acquisition rates in FY2021
were 92% for overseas forest plantations and 100% for company-owned forests in Japan. The Oji Group aims to achieve 100% forest certification acquisition rate by 2030.

Financial andNon-financial Data

Local staff in an eucalyptus nursery at CENIBRA

Rubeshibe company-owned forest in Hokkaido, Japan

Governance Strategy—

13

Biomass fuels

Social Contributions that are Environmentally and Economically Friendly to Local Communities

Production Conservation
Total
forests
forests(1,000 ha)(1,000 ha) (1,000 ha)
144
106
250
35
5
40
10
3
13
6
0
6
39
12
51
9
1
10

—

Woodchips

Pulp, paper,
particleboard,etc.

— Profitability —Indonesia
Vietnam
Other (4 companies inVietnam, Australia and China)
Overseas subtotal
Company-owned forests in
Japan
Group total

1973
1971
1992
2014
1998
1995

Planting

Initiatives for Profitability
Improvement

New Zealand

CENIBRAPan PacSPFL
Oji FS
KTH
QPFL

Forests are a renewable resource that can be planted, grown, harvested, and re-planted. To make thorough use of the trees, the Oji
Group utilizes the harvested wood for lumber, plywood, woodchips for paper manufacture, wood biomass fuel, etc.
The Oji Group promotes the effective utilization of wood as a comprehensive forestry business group.

— Green Innovation —BrazilCompany Established

Renewable Forest Resources

Initiatives for ProductDevelopment

Country129,000 ha overseas
12,000 ha in Japan— Sustainability —Overview of the Oji Group’s Forests (Oji Forests)
The Oji Group owns and manages extensive forests in Japan and overseas, amounting to 573,000 ha. The portfolio comprises
432,000 ha of production forests primarily for producing forest products in consideration of environment, and about 141,000 ha ofconservation forests principally for preserving biodiversity and basins.
Wood from production forests is expected to be used as raw materials for paper manufacturing and fuels for biomass power
generation, and for new materials derived from wood components under development. In order to maintain stable supply of thesematerials, the Oji Group spends approximately 11.2 billion yen annually for ongoing sustainable forest management. In addition, ourEnvironmental Action Program 2030 states a goal of “expanding overseas production forest area from 250,000 ha to 400,000 ha.”256,000 ha overseas
176,000 ha in Japan

141,000 ha

Initiatives forEnvironmental Issues

The Oji Group owns and manages vast forests and practices sustainable forest management in harmony with the environment
and local communities based on our Management Philosophy, Harmony with Nature and Society.
Our business activities and local communities rely on ecosystem services such as water, climate control and forest products,
while our forestry activities impact ecosystems, natural landscapes, and biodiversity. Therefore, we understand our responsibilityof managing the forests we own and manage in an environmentally, socially, and economically sustainable way.
Complying with the relevant local, national and regional laws and all relevant international conventions and agreements regarding
forest management and based on the applicable internationally recognized principles, we will:
1. be complicit in neither deforestation nor illegal logging.
2. safeguard ecological health and functionality and promote sustainable forest and land management practices that aid theconservation of biodiversity, soil, and water resources.
3. respect the human rights of all people, not discriminate or act with prejudice, and never engage in the utilization of childlabor or forced labor.
4. respect the unique economic and cultural rights and the legitimate rights of indigenous peoples, including traditionallands and land use.
5. contribute to maintaining or enhancing local communities’ social and economic well-being.
6. monitor the condition of forests and the results of management activities, and verify sustainable forest management using
tools such as forest certifications.

432,000 ha

Conservation
forestsha

What the Oji Group
Aims For

Sustainable Forest Management Policy (established on April 1, 2022; full text)

573,000

History of the Oji Group’s
Value Creation

Forests produce wood, store abundant water, prevent landslide and other natural disasters, and nurture wild animals.
They also absorb carbon dioxide and their various functions to prevent global warming are being reevaluated.
While the world is rapidly moving toward the realization of a carbon neutral society by 2050, we have more roles
and responsibilities to fulfill. Practicing sustainable forest management with a direct connection to our business, wewill continue to take steps toward realizing a decarbonized society, increasing the value of forest resources, and aiming to expand Oji Forests further.

* 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™, PEFC, etc.

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32

Initiatives for Environmental Issues –Sustainability–

Consideration for Ecosystem

Forests’ Multi-functionality and Ecological Services
While leveraging forests’ various functions, the Oji Group has been conducting various activities to protect and nurture forests andwater in the 573,000 ha Oji Forests we own and manage in Japan and overseas.

Biodiversity conservation
function

CENIBRA’s
Pulp Mill

Global environment
conservation function
Culturalfunction

Initiatives for ProductDevelopment— Green Innovation —Material production
function

Water source
cultivation function

CENIBRA’s Lagoa do Piau Forest

Monitoring ofeach process— Profitability —List of Conservation Forests in Japan by Function
Conservation forest category
Land conservation forests
Water conservation forests
Biodiversity conservation forests
Academic conservation forests
Conservation forests for forest
utilization
Total

Number offorests
16
4
13
1

Conservation
area (ha)
817
274
9,742
8

10

710

44

11,551* OECM: Other Effective area-based Conservation Measures

We will work on biodiversity preservation activities, under thecollaboration with the Ecosystem Trust Society since 2016,
aiming to acquire OECM certification for the Koyagauchi company-owned forest (in Kochi Prefecture) where measures toprotect fairy pitta’s growing environment are being taken.

33

The Oji Group Integrated Report 2022

Fairy pitta seen in the Koyagauchi company-owned forest.
Listed as an Endangered IB on the Red List of the Ministry of theEnvironment Red List.
Photo provided by the Ecosystem Trust Society

Pulp
manufacturing

Monitoring ofwater quality

Financial andNon-financial Data

We have joined the 30by30 Alliance for Biodiversity, which
was voluntarily launched by companies, local governments
and organizations under the initiative of the Ministry of the Environment in Japan. This Alliance aims to “protect at least
30% of land and sea by 2030,” which was launched at the G7
Summit in June 2021. The Alliance members certify theirowned or controlled lands as international OECM*, and expand and support protected areas.

CENIBRA fosters a variety of lives by protecting the valuable ecosystem of the Atlantic Forest
known as reservoir of biodiversity. In collaboration with external research institutions, universities,
NGOs and other organizations, CENIBRA also monitors plants and animals and water resources,
and conducts various ecosystem
protection and conservation activities, thereby enhancing multi-functionality of forests.
Monitoring results up until 2021
confirm that endangered 31 species of birds and 17 species ofmammals are inhabited in CENIBRA’s conservation forest.
In addition, CENIBRA is enBuffy-headed
Puma (LC)marmoset (CR)gaged in activities for breeding mutum (crax blumembachii), an
endangered bird species, and several other species, and returningthem to nature, and is implementing
a Green Corridor Program to link
Conservation
separated habitat areas.
forests
Sustainability Report (online)
https://ojiholdings.disclosure.site/en/themes/182/

Sustainability Strategy

Conservation Biodiversity Program—Joining the 30by30 Alliance for Biodiversity

CENIBRA’s Monitoring of Biodiversity Indicators

Governance Strategy

When acquiring forest certification (SGEC) in 2008, we selected conservation forests to address biodiversity. Later we identified 44 forests of 11,551 ha as conservation forests byadding forests for land and water maintenance purposes, academically valuable forests and other aesthetic forests. We
believe it our corporate social responsibility to maintain conservation forests, and will ensure appropriate forest
management.

Initiatives for Profitability
Improvement

Leisure and recreation function— Sustainability —Biodiversity conservation
Landslide disaster prevention function / soil
conservation function
Cultural function (aesthetic scenery)
Global environment conservation function(carbon dioxide absorption and fossil fuelalternative energy)
Water source cultivation function
Material production function (such as woodand mushrooms)
Leisure and recreation function

Landslide disaster prevention function /soil conservation function

Initiatives forEnvironmental Issues

Forests, which have a significant number ofmultifaceted functions such as biodiversity conservation, landslide disaster prevention, water
source cultivation and provision of leisure andrecreation places, are deeply related to our life.

CENIBRA (founded in 1973) is located in Minas Gerais in southeast Brazil, and implements integrated production from planting, felling, chipping of raw material eucalyptus to pulp manufacturing. CENIBRA’s owned and managed 250,000 ha forests (144,000 ha
production forests and 106,000 ha conservation forests) and pulp mill (1,200 kt/year) use water resources in the Doce River Basin.
In recent years, the areas around the Doce River have been experiencing lower rainfalls, causing a region wide concern about
draught. CENIBRA conducted periodic survey on water volume and water quality at each water intake point, and identified the mostseriously affected tributary area. In cooperation with public authorities, CENIBRA is conducting various conservation activities to cultivate water sources in the Doce Basin (see page 89 for “River Basin Management by CENIBRA, Brazil”).
In addition, to ensure the effective use of water taken from the Doce River, CENIBRA collects
and recycles water and heat energy in production processes, thereby manufacturing pulp with minimum water consumption. All used water (excluding evaporated portion) is sent to a water treatment facility, processed to meet water quality standards required by applicable laws and regulations
while its quality being monitored in an appropriate manner, and returned to the Doce River.

What the Oji Group
Aims For

The capital (stock) formed by nature such as forests, soil, water, air and biological resources is called natural capital.
Furthermore, the flows generated by the natural capital can be considered as ecological services (benefits). Take forests as an example. Forests are natural capital, and our society benefits in many ways including wood they produce,
carbon dioxide absorption and fixation and landslide disaster prevention.

Example of Efforts of Water Resource and Basin Management by CENIBRA, Brazil

History of the Oji Group’s
Value Creation

Foster nurtures Water, and Water nurtures Forests. Forests and Water
nurture our Lives. The Oji Group protects and nurtures Forests and Water to pass them on to the Next Generation.

* IUCN Red List Categories: Least Concern (LC), Vulnerable (VU), Critically Endangered (CR)
Mutum (VU)

Lowland tapir(VU)

Pulp shipment

The Oji Group Integrated Report 2022

34

Initiatives for Product Development –Green Innovation–

New Value Creation through Green Innovation

Green Innovation which Effectively Leverages Forest Resources toward Solving Social Challenges

P.37

Our Role Is to Effectively Utilize

History of the Oji Group’s
Value Creation

Development of New
Materials Derived
from Wood Fiber
P.38

General Manager, Innovation Promotion Division,
Corporate Officer, Oji Holdings Corporation

Muraji Nishi

Biomass plastics

Bioethanol

Biomass plastic films

Cellulose composites

CNF (Cellulose nanofiber)

Cellulose mats

What the Oji Group
Aims For

Forest Resources to Solve Social
Challenges

Initiatives forEnvironmental Issues

Wood-derived pharmaceuticalproducts
Cell culture substrates forcontrolled cell orientation
Medicinal plants

Film forming technology

Non-woven fabricmanufacturing technology

Chemical synthesis
technology

Adhesive processing
technology

Corrugated container manufacturing
technology

Recycling-friendly paper
products
Plastic-free solutions

Paper

Initiatives for Profitability
Improvement

Coating technology— Profitability —Lamination technology
Paper manufacturing technology

Pulp

Challenge to theMedical and
Healthcare Field

Fibrillation and mixing technology
Water treatment technology
Precise pulp-molding technology
Enzyme reaction technology

P.39

Development of
Eco-Friendly Paper
Products

Governance Strategy

Nano-fibrillation technology— Green Innovation —P.40
Sustainability Strategy

pharmaceutical products using hemicellulose, a main
component of wood, as a raw material; and large-scalecultivation of medicinal plants utilizing our forest
tree-breeding technology. In addition, utilizing proprietary
technology, we are promoting the development of cell
culture substrates for controlled cell orientation, which
are expected to contribute to regenerative medicine.
The third theme is “development of eco-friendly paper
products.” Utilizing various paper products to achievethings such as CO2 emissions reductions and reduce
plastic usage is something that can only be accomplished by a company as knowledgeable about paper as
we are. In order to meet a broad array of needs for environmental friendliness, we are promoting a variety of innovations. Examples include the development ofplastic-free solutions utilizing paper materials, and laminated paper which can be recycled leveraging our paper
production technology.
People around the world are holding great expectations for sustainable forest resources. We believe there
are innovations which can only be achieved by a company like us which has long and dedicated experience indealing with forest resources. By going back to the basics once again and reexamining the “Purpose” of the Oji
Group, we will promote value creation to achieve our future goals.

Nano-dot array technology

Initiatives for ProductDevelopment

Under the Group basic policy of “Initiatives for ProductDevelopment –Green Innovation–”, the role of our Innovation Promotion Division is to solve social challenges
through “the creation of new value through the effective
use of forest resources.” On a foundation of diverse coretechnologies cultivated through paper manufacturing andforestation spanning the 150 years since our founding,we will be promoting innovation with a focus on the following three themes.
The first theme is “development of new materials derived from wood fiber.” We are developing a variety of
new materials to realize a recycling-oriented society byeffectively utilizing the abundant forest resources we own
in Japan and overseas. Specifically, wood-derived biomass plastics utilizing enzyme reaction and fermentation
technologies, and biomass plastic films utilizing film forming technology. We are promoting development utilizingcore Group technologies, such as cellulose nanofibers
using nano-fibrillation technology, cellulose mats applying
non-woven fabric manufacturing technology, and cellulose composites leveraging mixing technology.
The second theme is “challenge to the medical andhealthcare field.” With an eye on the medical care of the
future, we are taking on the challenge of entering a new
field that goes beyond the Oji Group’s traditional businesses through our efforts to utilize our forest resources
and proprietary technologies in the medical and healthcare field. Specifically, we are working on developing

Fermentation andpolymerization technology— Sustainability —Sheeting technology

Raw wood
Refining technologies
Forest tree breeding technology

Green Innovation Oji Is Aiming for
Financial andNon-financial Data

Effective Use of Forest Resources Challenge to a New Field in Light Using a Variety of Paper Products
to Contribute to a Recycling-oriof the Future of Medicine andto Solve Various Environmental
ented Society
Healthcare
IssuesDevelopment of New
Materials Derived
from Wood Fiber
35

The Oji Group Integrated Report 2022

Challenge to theMedical and
Healthcare Field

Development of
Eco-Friendly Paper
Products
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Initiatives for Product Development –Green Innovation–
New Value Creation through Green Innovation

Development of New Materials Derived from Wood Fiber

Wood-derived Cellulose Nanofiber to Reduce Material Weight and Environmental Burdens
History of the Oji Group’s
Value Creation

CNF (Cellulose nanofiber)

Effective Use of Forest Resources to Contribute to a Recycling-oriented Society
Toward solving climate change issues caused by increased greenhouse gas emissions, the Oji Group promotes thedevelopment of new materials derived from renewable wood and aim to realize a recycling-oriented society.

Wood-derived biomass plastics

Testing plant for enzymatic degradation and fermentation

Polyethylene

Aviation fuel(SAF)*The Oji Group Integrated Report 2022

Mats using wood-derived cellulose fiber (pulp) as reinforcing fiber (cellulose mats) help reduce the consumption of petroleum-derived plastic by up to 70%. We have found that amolded product using cellulose mats shows much higher rigidity (flexural modulus) and impact strength than conventional
plastics. We have now started providing cellulose mat
samples.
We will continue the product development toward practical
automotive applications.

Molded cellulose polymer
composite product
Example of processed product: door
mirror cover

Biodegradable Plastic-Cellulose Composites to Reduce Environmental Burdens
Cellulose composites, Resoil-GreenWe are developing resin materials that are composites of biodegradable plastics and wood-derived cellulose (pulp). Since
the product uses pulp, it can achieve high degree of biomass
as well as high biodegradation rate. In addition, the productimproves various properties of resin such as strength and stiffness. Since all raw materials of the products are biodegradable
in soil, the products can contribute to reducing environmental
burdens. Even if unaware discharges to the environment occur,
those will be decomposed in the natural environment.
Currently, the product is well accepted by many customers,
and we are working so that it will be adopted for a wide variety
of applications.

Financial andNon-financial Data

37

Light and Strong Less-Plastic Materials Using Cellulose as Reinforcing Fiber

Sustainability Strategy

Emission reductions of CO2 from fossil fuels by the development of biomass plastic films* Biomass mark certified by the Japan Organics Recycling Association

Hard yet ductile
Return to its original shape after
being deformed for a long time

Wood-derived cellulose mats

* Sustainable Aviation FuelWe have been developing plastic films containing a plantbased plastic, polylactic acid. In response to a greater need for
packaging films with low environmental impact to reduce CO2
emissions from fossil fuels, we aim to contribute to this social
need. Our new product Alphan G, a polypropylene film containing polylactic acid, was certified as a Biomass mark product* and has been commercialized and launched.
We will work on the development of heat-sealing biomass
plastic films going forward, aiming to utilize them as pillow-type
packaging films widely used for the food and pharmaceuticalindustries, and will continue to develop a wide variety of products that contribute to SDGs.

•

Governance Strategy

Dehydration &polymerization

Fermentation

Enzymatic
degradation

Digestion

Ethanol

Polylacticacid•— Profitability —Lactic acid

Solve issues of existing fillers

Initiatives for Profitability
Improvement* FY2019 to FY2021 Demonstration Project for a Plastic Resource Circulation
System toward a Decarbonized Society

Sugar solution

Biomass plastic film, Alphan G

CNF(Cellulose nanofiber)

Issues such as balance between hardness
and ductility and resilience— Green Innovation —Plant-derived
bio materials

Conventional fillers

Initiatives for ProductDevelopment

Naturalrubberloss of ductility and resilience (ability to return to their original
shape after being deformed for a long time). When using our
CNF as a new reinforcing filler for natural rubber, we found it
has the potential to solve these issues.
Going forward, we will explore the possibility of deploying
this new composite to the market, and establishing the mass
production technology.

— Sustainability —Pulp

Natural rubber is a bio material derived from extract of tresssuch as hevea brasiliensis. Due to recent efforts to realize adecarbonized society, it is expected to replace petroleum-based synthetic rubbers.
Normally, natural rubber is reinforced by adding fillers suchas carbon black. Although these existing fillers can increase
strength of rubber materials, there are some issues namely

Polymerization

Wood

Development of cellulose nanofiber and natural
rubber composites

Initiatives forEnvironmental Issues

While the global need for biomass plastics is growing to reduce
CO2 emissions from fossil fuels, the diversification of raw materials for biomass plastics is required. We are exploring the
manufacturing of biomass plastics by using inedible biomass
derived from wood less susceptible to price fluctuations andtight supply-demand conditions due to the food situation. Before
the end of FY2021, we succeeded in producing wood-derived
polylactic acid and polyethylene through the commissioned project of the Ministry of the Environment*.
Going forward, aiming to popularize these wood-derived
biomass plastics, we will work to establish a mass synthesis
method and develop applications.
Furthermore, since the knowledge of producing polyethylene from ethanol may be applicable to the production of Sustainable Aviation Fuel (SAF) from ethanol, we will examine thepossibility of providing wood-derived ethanol as raw materials
for SAFs. Although there is an established method of producing SAFs from waste edible oil, the method of producing SAFs
from ethanol is awaited with great expectations for their popularization and expansion.

What the Oji Group
Aims For

Producing Wood-derived Biomass Plastics to Move Away from Petroleum-derived Plastics

Cellulose nanofiber (CNF) is produced by nanofibrillation of
pulp to a nanometer order (1nm = 0.000001mm), and is expected to contribute to the reduction of environmental burdens
by replacing conventional functional materials derived from petroleum and mineral. We aim to apply CNF in a wide variety offields, leveraging its functions and characteristics such astransparency, lightweight, durability, high resistance to deformation, and high viscosity.
There are increasing applications of our CNF in sports products, cosmetics, and on construction sites. In order to accommodate a wider variety of needs, we will work on thedevelopment aiming to promote further practical applications.

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38

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

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

Using a Variety of Paper Products to Solve Various Environmental Issues

As the super-aging society progresses and interest in extending healthy life expectancy grows, there is a need for
new and different form of medicine and healthcare. The Oji Group is challenging a new field beyond our traditional
businesses through our efforts to utilize forest resources for medical and healthcare field.

Toward solving environmental issues, such as reduction of CO2 emission and plastic consumption, the Oji Group establishes new business models using various eco-friendly paper products to provide solutions to accommodate awide variety of needs.

Drug Discovery from Forest Resources

Recycling-friendly Paper Products

Wood-derived pharmaceutical products••

Anti-inflammatory effectAnti-coagulant effect

Under development for use
in pharmaceutical products

Arthritis drug for animaluse• Anti-coagulant drugs•

Chemicalmodification

Aqueous coated paper cup baseCellulose

Sustainable Solutions (Paper Products which Accommodate a Wide Variety of Eco-friendly Needs)(Culture of human iPS
cell-derived cardiomyocytes)

Stable Supply of High Quality, Domestically Grown Raw Materials for Chinese Herbal Medicines
Licorice, which is used in many Chinese herbal medicines, isimported from abroad (China), 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 a demonstration test
at our farm. In order to expand our business scale, we are now
exploring the possibility of mechanized large-scale cultivation.

39

The Oji Group Integrated Report 2022

– All paper-made blister pack –This is a paperboard-based tray with aresin film that covers the surface. MAP*
can extend food shelf life.

This is a package that is separable into
cardboard and film. The vacuum packaging of meat and fish can suppress drip,
and printing on the cardboard offers attractive presentation of foods.

This is composed of three pieces; paperboard-made top, tray and divider. Without the use of plastic films, it will secure
and protect products inside. Printing on
and window holes of this product offer effective presentation of daily goods inside.

* MAP (Modified Atmosphere Packaging): a packaging
system that involves replacing the atmosphere surrounding a food product inside a pack with a gas
suitable for the preservation of food.

Topics – Sustainability –Reduction of CO2 emissions by introduction of paper packaging
A comparison of the life cycle CO2 emissions of petroleum-based plastic
packaging and sustainable paper packaging shows that paper packaging
emits less CO2 than plastic packaging. Therefore, the introduction of paper
packaging can contribute to CO2 emission reduction. For more details,
please see our website.
*1 CO2 emissions are calculated by converting greenhouse gas (GHG) emissions such as carbon
dioxide (CO2), methane (CH4), and dinitrogen monoxide (N2O) into CO2. The calculation is madebased on LCA (Life Cycle Assessment) methodology.
*2 Calculation results of reduction rate change, depending on packaging material and layer structure.
(It is assumed that the paper packaging material is MG bleached kraft paper 70 g/m2 and thatthe type of printing is gravure printing.)

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

Plastic packaging

Paper packaging

Disposal(Combustion)60%
reduction

Converting
Disposal (Combustion)
Converting
Obtaining raw
materials &manufacturing
materials

Obtaining raw
materials &manufacturing
materials

Financial andNon-financial Data

Large-scale cultivation of medicinal plants– FlatSkin® –Sustainability Strategy

Picture of cultivating
cells in red culture (left),and stained cells*2 ingreen (right)– Tapered paper tray with MAP capabilities –Sustainable, heat-sealable package

Governance Strategy

ell
fc
o
n
tio ionec tatDir orien

Cardboard that enables prolonged
shelf life and attractive presentationof fresh foods— Profitability —Example of experiment using “cell culture substrates for controlled cell orientation”

Food trays that lead to both plastic
reduction and food loss reduction

Initiatives for Profitability
Improvement*1 Since cardiomyocytes generated from iPS cells are inferior to those in vivo in termsof motility and physiological activity, it is required to make them closer (maturate) tothose in vivo.
*2 -Actinin (protein)

ll

ce
of n
n
tio ioec tatDir orien

Cultivating cardiomyocytes on thisproduct enables reproduction of cellorientation similar to that in vivo.

The Oji Group is developing cell culture substrates with a finestructure, by applying one of the semiconductor manufacturing
process. While research on regenerative medicine and drug
discovery using “iPS cells,” which can develop into any cell, is
actively carried out, there is an issue that immature iPS cells
must be matured in order to be used for regenerative medical
purposes*1. Focusing on the fact that human cardiomyocytes
are “oriented” in vivo, we have developed culture substrates
that induce cell orientation. This product is a cell culture substrate fabricated by our original technology, that has nanodot
regions with a pitch of several hundred nm and planar regionsinterleaved in parallel stripes. It is confirmed that iPS cardiomyocytes cultured on this substrate enables reproduction of cellorientation similar to that in vivo, activating genes work likemature cells. We are currently conducting joint research withJuntendo University, etc.
We will continue to promote use of this product toward regenerative medicine and drug discovery applications.

Human cardiomyocyte tissue (conceptual drawing)— Green Innovation —Wood components

Traditional paper cups, made of plastic laminated paper, are not suitable for recycling
and are generally treated as combustible waste. We have leveraged the technology
cultivated in our paper manufacturing and successfully developed paper cup basewhich has water and oil resistance and heat sealability required for paper cups and isrecyclable under the existing paper recycling system, by applying special aqueous
resin to the cup base in a thin and even manner.

Initiatives for ProductDevelopment

Lignin, etc.

Nanostructure Technology for Regenerative Medicine and Drug Discovery
Cell culture substrates for controlled cell orientation

When disposing of ordinary laminated paper as combustible waste, combustion of
petroleum-derived plastic layers results in CO2 emissions from fossil fuels. Since plastic layers of the laminated paper we developed use plant-derived polylactic acid, combustion of the paper does not increase CO 2 in the atmosphere. In addition, thislaminated paper is biodegradable under compost conditions.

— Sustainability —Hemicellulose

Laminated paper using plant-derived polylactic acid

Initiatives forEnvironmental Issues

The Oji Group aims to contribute to human and animal healththrough the development of “sulfated hemicellulose.” Sulfatedhemicellulose is a compound obtained by chemically modifying“hemicellulose,” one of the major components of wood. Our
joint research with companies and universities in and outside
Japan confirms that it has anti-inflammatory and anti-coagulant effects. In addition, this compound is similar, in terms ofchemical structure and pharmacological effect, to heparin, ananimal-derived pharmaceutical product used all over the world.
By replacing this animal-derived pharmaceutical product withwood-derived one, it is expected to accommodate a wide
range of needs.
While we are currently filing a prior application for arthritis
drug for animal use, we will develop into a drug for human use
and work on the building of the pharmaceutical business, leveraging the property of being derived from wood.

Sulfated hemicellulose

What the Oji Group
Aims For

Development of Eco-Friendly Paper Products
History of the Oji Group’s
Value Creation

Challenge to the Medical and Healthcare Field

Packaging material
layer structure
OPP 20μ/Print/
Lamintion/Vapor
deposition/CPP 25μPrinting/MG bleachedkraft paper 70 g/m2/
Heat-sealing layer(simultaneous printing)

The Oji Group Integrated Report 2022

40

Initiatives for Profitability Improvement –Profitability–

Business Overview

Corporation
Changes in Net
Sales andOperating Profit

売上

Net
Sales

¥120.1 billion

1,507.6
110.2

1,800.0

1,700.0
1,359.0
106.1

120.1
84.8

Net Sales (¥ billion)
Operating Profit

1800

150.0

1,470.2

1350

105.0

What the Oji Group
Aims For¥1,470.2 billion

Operating
Profit

1,551.0(¥ billion)
2018

P47

P49

Printing andCommunications
Media COMPANY

P53

2024 (plan)(FY)

Corporate Management
Group and Shared Service
Companies
P57

P59©Yanase/F · T · N— Sustainability —P43

Forest Resources andEnvironment Marketing
COMPANY

Functional Materials
COMPANY

2022 (plan)

Initiatives forEnvironmental Issues

Household andConsumer Products
COMPANY

Industrial Materials
COMPANY

2021

2020

2019

History of the Oji Group’s
Value Creation

Oji Holdings— Green Innovation —Initiatives for ProductDevelopment

Main businesses

Main businesses

Main businesses

Main businesses

Household papers, 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 business, Logistics, etc.

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Affiliated companies

Domestic

Overseas

Domestic

1 company 6 companies

Earnings structure

Domestic

Overseas

Domestic

9 companies 12 companies
Earnings
structure¥26.1

Net SalesbillionbillionOperating
Profit¥184.7¥15.3

billionbillionOperating
Profit¥314.5¥55.5

Earnings
structure

Net Sales
Composition
Ratio

Net Sales
Composition
Ratio

14.0

%

billionbillion

17.0%

Net Sales

Operating
ProfitOverseas

17 companies 16 companies

Earnings
structure

18.1
Net Sales

Domestic

7 companies 1 company

Net Sales
Composition
Ratio

%

Overseas¥244.5¥17.8%

Net SalesbillionbillionOperating
Profit¥296.5billion¥7.0

billionFinancial andNon-financial Data

Operating
Profit¥700.7

Earnings
structure

10.6%

Net Sales

15 companies 15 companies

Net Sales
Composition
Ratio

40.3

Domestic

Sustainability Strategy

Net Sales
Composition
Ratio

Overseas

Governance Strategy

43 companies 44 companies

Overseas— Profitability —Main businesses

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

Initiatives for Profitability
Improvement

Main businesses* Net sales and operating profit of Oji Holdings Corporation include adjustments (primarily those for internal transactions).
Non-consolidated net sales, net sales composition ratio and operating profit do not include adjustments (primarily those for internal transactions).

41

The Oji Group Integrated Report 2022

The Oji Group Integrated Report 2022

42

Initiatives for Profitability Improvement –Profitability–

Household and Industrial Materials Businesses

Takayuki Moridaira

26.1

22.4

FY201842.0

38.1

FY2019FY2020

FY202118.0

FY2022 Planned FY2024 Planned

Expansion & Enhancement of Corrugated Container Business in Greater Tokyo
Area, Japan

FY2021 Logistics Grand
Prize, “SDGs Social
Contribution Award”

FY2020“Minister of Economy,
Trade and Industry Award”
at the Japan Packaging
ContestWorldStar
Competition 2022,“WorldStar Award”

Sustainability Strategy

45th
Kinoshita Prize“Improvement andRationalization
Category”

Governance Strategy“OJI FLEX PACK’AGE,” automated packaging system
We sell “OJI FLEX PACK’AGE,” automatic packaging
system, which helps packaging adjust flexibly to the
product size, and fanfold corrugated sheets “Rakudan,”its packaging material. The introduction of these products
helps save packaging labor, reduce packaging materials,
and reduce CO2 due to reduction of delivery burden. Thisinitiative received recognition for its eco-friendliness andimprovement and rationalization of packaging, winning
four awards including the Logistics Grand Prize, “SDGs
Social Contribution Award.”
Going forward, accelerating market deployment of theautomated packaging system and ensuring a stable supply system by increasing our supply bases for “Rakudan,”we will continue new development including collaboration
with partner companies so that the system can be asolution that our customers use with more confidence.

— Profitability —To further strengthen our business base in the Kanto region where the demand for corrugated containers is expected to markedly increase, we are constructing an
integrated plant for manufacturing the base paper andprocessing it for making corrugated containers in Utsunomiya City, Tochigi Prefecture (scheduled to complete
construction in January 2023). We intend to enhance ourcompetitive strength by having an integrated plant.
At the same time, as part of its initiatives to restructure
the manufacturing system for base paper, we completed
the modifications of the Oji Paper Tomakomai Mill newsprint production facilities for the production of containerboard and kraft paper (started operation in October,2021), followed by the relocation of a special liner andspecial paperboard machine from Nayoro Mill of Oji Materia to the same mill (started operation in April 2022).
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.

Financial andNon-financial Data

Rakudan, fanfold corrugated sheets

Integrated plant for corrugated containers in Tochigi Prefecture (under construction)

The Oji Group Integrated Report 2022

40.9

700.7

Segment Overview
In FY2021, the Household and Industrial Materials Businesses had net sales of 700.7 billion yen (up 53.2 billion yen fromFY2020) and operating profit of 26.1 billion yen (down 12.0 billion yen from FY2020). Domestic business saw increased
sales due to continued steady sales of corrugated containers for e-commerce use as well as of kitchen towels, wet wipes
and other products for healthcare purposes, in addition to the overall recovery in demand for many products. In the overseas business, despite weak sales of disposable diapers, sales increased owing to robust sales of corrugated containers,
coupled with price increases becoming widely accepted.
In FY2022, net sales of 810.0 billion yen (up 109.3 billion yen from FY2021) and operating profit of 18.0 billion yen(down 8.1 billion yen from FY2021) are planned.

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

43

647.5

Initiatives for Profitability
Improvement

Folding carton business
For folding cartons used in a range of fields including confectionaries,
cosmetics, and pharmaceuticals, we are combining aestheticallypleasing base paper with structural design tailored to the application
and appealing graphics, thereby further enhancing the value of ourcustomers’ products.

billion686.1— Green Innovation —Corrugated container businessAs 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 inorder to fit each product size inside.

Operating Profit

billion

681.2

Initiatives for ProductDevelopment

Business Overview
The Industrial Materials Business has production and sales structuresthat integrate material and converting from base paper manufacturing
to product processing 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 tocustomer needs.

Net Sales%— Sustainability —Industrial Materials Business

40.3¥700.7¥26.1

Net Sales Composition Ratio

Operating profit (¥bil.)
880.0
810.0

Initiatives forEnvironmental Issues

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

Net sales (¥bil.)What the Oji Group
Aims ForWe 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 dayto-day lives.

Sales target for FY2030: ¥1,250.0 billion

History of the Oji Group’s
Value Creation

Changes in Net Sales Composition Ratio, Net Sales and Operating Profit“OJI FLEX PACK’AGE,” automated packaging system

The Oji Group Integrated Report 2022

44

Initiatives for Profitability Improvement –Profitability–
Household and Industrial Materials Businesses— Sustainability —Multi-layer (ultra thin honeycomb layered
structure)

Acquisition of a corrugatedcontainers company (2021–)

Vietnam* Including 1 site under construction

New construction &relocation of Christchurch
corrugated container
plants (2022–)

Australia• Corrugatedcontainers: 4

Topics – Sustainability –A new plant in Utsunomiya City, Tochigi Prefecture, which
is an integrated plant for manufacturing the base paper
and processing it for making corrugated containers andwill install solar power equipment (scheduled to be completed in March 2023), can reduce GHG emissions associated with delivery of base paper. Therefore, the plant is
positioned as a model plant toward the realization of ourinitiatives for GHG emissions reduction.
We are also working to install solar power equipment
in existing plants if their weight does not exceed the allowable roof load or when the roof is repaired, and examining the possibility of fuel conversion for coal-fired
boilers.
We will work on initiatives for environmental issues
along with business expansion.

Financial andNon-financial Data

New Zealand• Containerboard: 2 / Fiberboard:
1 / Corrugated containers: 3 /Paper bags: 1

Capacity enhancement of containerboard (2021–)
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 competitivenessNew corrugated container plant in Johor (2022–)
New corrugated container plant in Selangor (2022–)•

S.Pack & Print Public Company Limited
Chief Executive Officer

Sustainability Strategy

New corrugated container
plant in the north (2023–)

Malaysia• Containerboard: 2 / Corrugated containers:
10 / Plastic bags: 1

The Oji Group Integrated Report 2022

Corrugated containers: 7* /Folding cartons: 1 / Paper bags: 2

New corrugated container
plant in the south (2022–)

Myanmar• Corrugated containers: 1 / Flexible packaging: 1

45•

Wuthichart Anansuthivara

Governance Strategy

Cambodia• Corrugated containers: 3— Profitability —India• Corrugated containers: 4

Initiatives for Profitability
Improvement

Thailand• Corrugated containers: 1 / Corrugatedcontainers & folding cartons: 2

Voice— Green Innovation —4th Plant, Ojitex Haiphong in the north of Vietnam (rendering of completed plant)

S.Pack & Print Public Co., Ltd. has many years of business experience in thesouth of Thailand, with strong reputation in the market. Our market share in thearea ranks first for the folding carton business, and second for the corrugatedcontainer business.
To respond to customers’ growing needs particularly for rubber gloves andmaintain our status in the market, we undertook investment in key equipmentin 2022 to introduce new two offset printing machines.
We strongly believe that this investment will contribute to the double digit
growth of sales in our folding carton business, in line with which, it will also
contribute to the corrugated container business.
While steadily capturing business opportunities and overcoming challenges
and issues, we will fully devote ourselves to playing a part in the Oji Group’s
growth strategy in Southeast Asia.

Initiatives for ProductDevelopment

Sustainable growth through business expansion

Main Overseas Sites

Indonesia• Corrugatedcontainers: 1

Standard filter

Initiatives forEnvironmental Issues

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,
and we are developing our business in the countries.
In Southeast Asia and India, we further enhanced andexpanded our business base for containerboard and corrugated containers in an integrated manner by starting
operation of a new containerboard machine in Malaysia,
starting operation of new corrugated container plants—
two in Malaysia and one in Vietnam, and acquiring a corrugated containers company in India, all of which wereconducted from 2021 to 2022. In addition, we are constructing a new corrugated container plant in Vietnam tostart operation in 2023. In Oceania, in addition to a newplant in Christchurch which was relocated and started operation in 2022, we will explore the possibility of further
expanding the corrugated container business. We will also
work on the development of plastic alternative products
to respond to the expected growing demand.

Multi-layer

What the Oji Group
Aims For

Further Expansion & Enhancement of Packaging Business in Southeast Asia,
India and Oceania

dramatically increase the efficiency of contact with air,bringing an advantage that the strong deodorizing continues for a long period of time. The filter works well atplaces or situations with smells, such as entrance, nursing care facilities, life with pets and bathrooms.
We will continue to work on the expansion of the filter
business and the development of various filter products
which meet customers’ needs.

History of the Oji Group’s
Value Creation

Filter Business
Due to the spread of COVID-19, the demand for ventilators and air purifiers is increasing. In our filter business,
we manufacture and sell “Energy recovery ventilators element” which is the core parts of a ventilators and “Coateddeodorizing filter” for air purifiers, and continue to steadily
expand the business with the start of operation of thesecond filter factory in China in November 2020.
“Deodorizing filter by application” we newly developedin 2021 was adopted for air purifier 2022 model manufactured by Daikin Industries. Deodorizing filter by application has unique “multi-layer” structure where a thin filter
is layered while changing directions, which helps

Liquid Packaging Carton Business
In September 2020, we established a joint company with
ISHIZUKA GLASS Co., Ltd. and entered the liquid packaging carton business. To move away from our former
dependence on overseas sources of base paper, Oji Materia started production of milk carton base paper for the
first time in Japan in August 2021. This enables an integrated production in Japan from raw material pulp manufacturing to printing and converting, as well as a stablesupply of safe and secure Japan-made milk carton. Going forward, we will aim to expand this business outside
in Japan where demand is expected.

Solar power equipment at a corrugated container plant of GSPP, Malaysia

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46

Initiatives for Profitability Improvement –Profitability–
Household and Industrial Materials Businesses

Household and Consumer Products Businessnepia Quality

Quality of life

Environmental
qualitySocial quality

nepia aims for No.1 inthree quality domains.

We own the household paper brand “nepia.” “Quality of Life” as in the seekingof good texture, comfort, and functionality. “Environmental Quality” as in forest
conservation such as the adoption of FSCTM certified paper. “Social Quality” as
in aligning with customers’ hope and contributing to society through actions
such as taking CSR initiatives. In the pursuit of these three quality domains, Oji
Nepia is producing tissue paper, toilet rolls, disposable diapers, and otherproducts indispensable in our daily lives. (FSCTM C018118)

packages were ususally too big to fit in a small bag or
pouch. This product has innovatively adopted the packaging of pocket tissue paper and eliminated the pain
point.
President Mitsuyo Ota, who is a big fan of nepia Hana
Celeb Tissue, proposed a collaboration with Oji Nepia leveraging the Hana Celeb brand for the first time and it
was realized.

nepia Genki! Pants©Yanase/F · T · N

Enhancement of Branding and Expansion of Sales of Household Paper
Products in Japan47

The Oji Group Integrated Report 2022

Financial andNon-financial Datanepi-eco Biomass Mask

nepi-eco Kitchen Towel

Sustainability Strategy

nepia Hana Celeb Pocket Mask
In April 2022, we developed “nepia Hana Celeb Pocket
Mask,” adopting the idea proposed by a student in a
“Product Development Class” at “TITAN’s College,” acommunication college administered by TITAN. Due to
COVID-19, wearing masks has become a daily routine.
While more and more people were bringing spare masks
when they hang out, they faces the pain point that mask

nepi-eco series (masks, kitchen towels and tissue
papers)nepi-eco is a series mainly designed to switch packaging
materials from petroleum-derived plastic film or ink to biological paper or biomass ink. Including the products
manufactured of FSCTM certified paper we have been using, whose specifications help reduce chemical substances in the emissions associated with transportation
by increasing each item in volume as much as possible,
this series can contribute to the realization of a sustainable society. In the spring of 2022, three new products
were added to the series.
We have biomass masks in which 80% of the non-woven fabric materials are derived from plants such as

Oji Nepia continues to work on various initiatives,
through production using eco-friendly materials, so that
we can contribute to a sustainable society.

Governance Strategy* Survey by Sustainable Brands Japan (15,000 samples nationwide, Internet questionnaire, male and female aged 18-79, more than 300
companies)

Small size

nepia Long Lasting Best Fit Face Mask
Block Filter Plus SurgicalSince the outbreak of COVID-19, we have continued to
produce mask products. Among them, “nepia Long Lasting Best Fit Face Mask” conforms to Class III, the highest
class in medical mask standards. We deliver safety andsecurity to our customers by offering the highest class of
medical masks as commercial products.

sugar cane and corn. There is also a kitchen towel thatuses paper materials to replace plastic packaging. In theseries, we also have boxed tissue in which the plastic
opening is replaced by paper alternatives so waste separation is no longer required. It is also engineered for easy
folding to further save trouble when dispose of.
Furthermore, in the 2021 survey on brands of companies that, from ordinary citizen’s perspectives, contributeto SDGs*, Oji Nepia ranked 11th. In the ranking by industry, it ranked second in the “Cosmetics and Toiletries Category.” We believe that this result shows Oji Nepia’s
initiatives for SDGs and to realize a low-carbon society
are well-evaluated by ordinary citizens.

— Profitability —nepia krafco mini
In January 2022, we launched a mini size of eco-friendly
product “krafco,” which, by packaging tissue papers withpaper-derived kraft paper and paper string only. It saves
the trouble of separating waste and further contributes toplastic-free (film-free) initiatives and reduction of waste.

Initiatives for Profitability
Improvement

Regular size

Topics – Sustainability –— Green Innovation —response to the expected growth in the population requiring nursing care and support. We will continue to develop products that address the issues faced by Japan’s
aging population in the field of nursing care.
Based on the development of products that emphasize environmental friendliness and quality, we aim to further enhance recognition of “nepia,” develop new
products and create value, while adapting to customer
needs and changing times.

Disposable diapers for adults
We are offering “nepia Tender” series for medical andwelfare facilities. To realize “co-creating nursing care,”more comfortable nursing care for both the providers andInitiatives for ProductDevelopment

In our household paper business, we obtained the first
FSCTM certificate in the industry, and aim to develop items
such as eco-friendly products that use biomass ink andpaper instead of plastic film, and high-quality products
exemplified by “Hana Celeb,” resulting in further improvements in value for the “nepia” brand. We are responding
to market trends such as by producing extra-long toilet
rolls at the Edogawa Mill, which started commercial production in the fall of 2020 and built a new warehousewithin the mill in August 2022. By integrating the household paper processing and distribution bases, we intend
to enhance our competitive strength in the household
paper and disposable diapers market in the Kanto
region.
For the disposable baby diaper business, we are developing products both in Japan and overseas under theunified brand name“Genki!,” which was renewed in April
2021. By that, we strive to enhance the value of the “nepia” brand and expand sales. In Malaysia, we have increased production capacity by restructuring the
production system, including the introduction of a new
disposable diaper processing machine. In Indonesia, we
are working to secure cost competitiveness and strengthen our business base by manufacturing and selling disposable diapers at a local disposable diaper factory of a
joint venture company, thereby further expanding ourbusiness, including in neighboring countries. In China, weare also incorporating local consumer needs and expanding sales of thin products. We have also been expanding the exports from Japan, mainly by strengthening
Vietnamese sales with the scaling up of local retailbusiness.
In the field of disposable diapers for adults, we installed a new processing machine in Fukushima Mill aiming to start commercial production in the fall of 2022 in

Small size

— Sustainability —nepia Hana Celeb
Hana Celeb Tissue Three Packs

Initiatives forEnvironmental Issues

nepia PremiumSoft Tissues

What the Oji Group
Aims For

Regular size
nepia PremiumSoft Toilet Rolls

the receivers, we are providing new solutions, products
and services through working together with them. In August 2021, we launched “nepia Tender, tape-type, smaller L size,” which delicately responds to changing bodyforms of users to fit them better. In March 2022, we also
launched “Wet towel,” “Buttocks wiper,” “Buttocks cleaning liquid; Tsurunto-san,” and “Nursing care towel; oshibori-no-moto,” now offering a lineup of products
designed to reduce the burden of nursing care.

History of the Oji Group’s
Value Creation

Business Overview

nepi-eco Tissue 5 packs of 200 pairs

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Initiatives for Profitability Improvement –Profitability–

Functional Materials Business
Sales target for FY2030: ¥400.0 billion
Net sales (¥bil.)

We aim to expand the business byenhancing the added value ofexisting products and strengthening
sales activities for new products.

Net Sales

%

224.1

214.7

18.4

182.3
15.4

billionbillion

184.7
15.3

11.5

FY2018FY2019FY2020

216.0

230.0
17.5

10.0

FY2021

FY2022 Planned FY2024 Planned

President, Functional Materials COMPANY
Executive Officer
Oji Holdings Corporation

terials, dry pulp non-woven fabric excellent in bulkiness and liquid retention, and glass paper excellent in size stability and heat resistance.

The Imaging Media Business at the Oji Group develops thermal recoding
media that meet customer needs for household, industrial, logistic, medical and other various uses, leveraging diverse coating technologies suchshare.
Slot tickets (Kanzaki Specialty Papers)

Adhesive Products Business
Using proprietary adhesive force control technology, the Adhesive Prodcourier labels, adhesive tape for packaging, and wound dressings to lessfamiliar, special applications like aluminum tape for construction material
and forgery prevention tape.
Eco Marine TacTM (Oji Tac)

The Film Business handles films for capacitors, essential materials in the
power supply units of eco-friendly vehicles, developed based on its thinfilm technology that produces the world’s thinnest films, and optical double-sided adhesive films and hard-coated films that are adopted for smartphones and other precision devices.

Financial andNon-financial Data

Film Business

SILBIO series
In the midst of the growing needs for paper products as
replacement for plastic packaging, “SILBIO series” has alineup well-suited for light packaging applications in various fields, including a product that not only provides barrier property to paper packing materials but also hasbarrier and light-shielding properties as high as aluminum
deposited film, a product that has transparency and barrier properties, a product that requires no sealant such as
PE. The lineup consists of the following.

Sustainability Strategy

ucts Business handles from familiar products like food/beverage labels,

Governance Strategy

as thermal and inkjet technologies, boasting a top class global market— Profitability —Imaging Media Business“SILBIO BARRIER” which has oxygen barrier property
as high as EVOH, and moisture barrier property as highas LDPE, preventing contents from diffusing moisture orscent.
“SILBIO ALBA,” aluminum deposited paper material
which has oxygen barrier, moisture barrier, light-shielding
and heat sealing properties, and is most suitable for applications requiring high barrier and concealability.
“SILBIO CLEAR” which has a transparent feature in
addition to barrier and heat sealing properties, and ismost suitable for packaging for items whose contents
you want to show such as food and daily products.
“SILBIO EZ SEAL” which has no barrier property, but
is specialized in its easy heat sealing feature without using sealant, and is most suitable for secondary and delivery packaging for food, and industrial material packaging.
SILBIO series products can bear a paper identification
mark.
Currently, the SILBIO series, whose features are well
accepted, is adopted as packaging materials for foodand soap.

Initiatives for Profitability
Improvement

Glass paper (Oji F-Tex)

In Japan, we are strengthening the foundation of our existing business by continuously reviewing our production
system in response to changes in the demand structureof the functional materials market, thereby enhancing
competitiveness and profitability. We have continued towork on the rapid development of high-performance,high-value added products, and developed an automotive window film that combines high heat shielding properties and light transmittance, both of which had beendifficult to achieve in the past, “MEGURISH (cotton),” a
recyclable resource mixed papermaking that combines
conventionally discarded fibers, scraps, and recovered
clothing as paper raw materials, and “kinarito,” a biodegradable nonwoven fabric material made mainly fromplant-derived cellulose and polylactic acid.
In addition, in response to the global shift to a decarbonized society and the rapid spread of electric vehicles,
we have decided to add two production facilities in the
Shiga Mill for polypropylene film used in capacitors formotor drive controllers of electric vehicles (scheduled tostart operation in 2023 and 2024, respectively). As a result, the production capacity is expected to double fromthe February 2022 level.

— Green Innovation —special functions such as electrical material paper including insulation ma-

Actively Develop High-function and Eco-friendly Products

Initiatives for ProductDevelopment

The Specialty Papers Business has a lineup of products with advanced— Sustainability —Specialty Papers BusinessInitiatives forEnvironmental Issues

Segment Overview
In FY2021, the Functional Materials Business had net sales of 184.7 billion yen (up 2.4 billion yen from FY2020) and operating profit of 15.3 billion yen (up 3.8 billion yen from FY2020). In the midst of the ongoing impact of the COVID-19 pandemic, in the domestic business, sales of films for capacitors for next-generation vehicles with growing social expectationfrom the perspective of climate change measures and energy conservation,in particular, and films for general industrialuse, and packaging films for foodstuffs and sundries remained strong. In the overseas business, sales and profits increased due to a recovery trend in demand, mainly, for thermal papers.
In FY2022, net sales of 216.0 billion yen (up 31.3 billion yen from FY2021) and operating profit of 10.0 billion yen (down
5.3 billion yen from FY2021) are planned.

What the Oji Group
Aims ForOperating Profit

Shigeki Aoki

10.6
¥184.7¥15.3

Net Sales Composition Ratio

Operating profit (¥bil.)

History of the Oji Group’s
Value Creation

Changes in Net Sales Composition Ratio, Net Sales and Operating Profit

Film used in capacitors (Oji F-Tex)

49

The Oji Group Integrated Report 2022

The Oji Group Integrated Report 2022

50

Initiatives for Profitability Improvement –Profitability–
Functional Materials Business“MEGURISH (cotton)” serves as an effort to create
new value through reusing (upcycling) fibers for raw materials for paper instead of disposing of them. In addition,
since different fibers are blended for each production, thecolor and texture vary a little, depending on production
lots. We are proposing this randomness as new value.

Main Overseas Sites
Asia
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.

EuropeNorth 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, carbonlesspaper, etc.

Bright future of thermal paper businessI have been working for paper converting companies for more than 20 years.

Voice

In early 2018, I started working for Tele-Paper in Malaysia, and then in 2020, I

Governance Strategy

Oji Papéis Especiais— Profitability —was appointed as Mill Manager of Oji Paper (Thailand).
Sustainability Strategy

Seeing a gradual growth in consumption of label-grade thermal paper used
for logistics carton, in addition to POS receipt in the thermal paper market inSoutheast Asia, we strongly believe the thermal paper business has a bright
future.
Thermal paper enables printing of variable information, and the preserving
quality of the printed information is being advanced. Thermal paper is now indispensable to our life. I, as Mill Manager, am committed to ensure stable supply of high quality products to our customers.
Coater newly installed at Oji Papéis Especiais

We will continue to show our presence as a leading company in the thermal
paper and non-carbon paper business.

Huang Chun Wei (James)
Oji Paper (Thailand) Ltd.
Deputy Managing Director,
Mill Manager

The Oji Group Integrated Report 2022

Financial andNon-financial Data

The Oji Group Integrated Report 2022

Germany• Kanzan Spezialpapiere [KANZAN]
Production/sales of thermal paper, etc.

Initiatives for Profitability
Improvement

51— Green Innovation —Overseas, we have completed to enhance and expand
facilities to practically double production capacity andstarted full operation in Brazil in order to meet strong demand for thermal paper in South America. In Europe, wehave decided to expand thermal paper facilities (scheduled to start operation in January 2024). In addition, in
September 2022, Adampak Group, a high performancelabel printing and converting company with its businessbases in Southeast Asia and China, became a memberof the Oji Group. This addition of the high performancelabel business for electric products and healthcare products to the thermal paper and adhesive paper businessalready operating in Thailand and the high performancelabel printing/converting and cutting/converting business
in Malaysia has enabled the integrated production frombase paper manufacturing to converting. We are continuing to respond to the demand expected to grow in the
Asian area.
We are working to expand our business in line with theeconomic development in the emerging markets such as
Southeast Asia, South America, the Middle East and Africa, and aiming to strengthen competitiveness at existing
locations. Based on the Group’s core technologies which
are strengths we have cultivated to date in “papermaking,”“converting (functional and adhesive coatings),” and “filmforming,” we are advancing our development of
eco-friendly materials and products in anticipation ofmarket needs and proactively working to expand into
new business areas so as to promptly provide products
and services that exceed expectations.

Initiatives for ProductDevelopment

Expanding Global Sales of Imaging Media Business and Enhancing
Competitiveness Including Printing and Converting— Sustainability —Recycling residual yarn generated
in the towel manufacturing process
for paper materials

Initiatives forEnvironmental Issues

Producing packaging paper, etc.
using pulp obtained from residual
yarn

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

Singapore, Malaysia,
Thailand, the Philippines,
Indonesia and China• Adampak GroupHigh performance label
printing & converting

What the Oji Group
Aims For

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

History of the Oji Group’s
Value Creation“MEGURISH (cotton)”In the growing momentum to reduce waste from an environmentally friendly perspective, the clothing industry had
an issue with disposing of fibers not used in end products and collected products. Oji F-Tex developed “MEGURISH (cotton),” a recyclable resource mixed
papermaking that combines conventionally discarded fibers, scraps, and collected clothing as paper raw
materials.
In collaboration with KUSUBASHI MONORI Co., Ltd.,an established towel manufacturer in Imabari City, Ehime
Prefecture, which is famous for its towel industry, we
worked on processing residual towel yarn and scraps
generated in its manufacturing process into raw materials
for paper, and succeeded in the development of thisproduct by leveraging the Oji Group’s paper and pulp
manufacturing technology. The product is adopted for giftboxes and packaging paper for its high-end towel brand.

52

Initiatives for Profitability Improvement –Profitability–

Forest Resources and Environment Marketing BusinessNet sales (¥bil.)

CENIBRA’s pulp products warehouse

We grow 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.
With the goal of 400,000 ha of overseas forest plantations, we are also acquiring lands and expanding forest plantations.

Fuels/Chemicals and Other Material Procurement Business

FY201916.7
FY2020

FY2021

FY2022 Planned FY2024 Planned

Segment Overview
In FY2021, we had net sales of 314.5 billion yen (up 69.2 billion yen from FY2020) and operating profit of 55.5 billion
yen (up 38.8 billion yen from FY2020). In the pulp business, we worked to enhance our competitiveness through acquisition of our overseas sites as wholly-owned subsidiaries and other measures. Sales and profits increased due to an increase in the selling price of pulp and a recovery in demand for dissolving pulp. In the energy business, whilestrengthening the biomass generation business aiming to expand the use of renewable energy, electricity sales decreased
due to an increase in in-house electricity consumption as a result of higher capacity utilization at plants.
In FY2022, net sales of 405.0 billion yen (up 90.5 billion yen from FY2021) and operating profit of 71.0 billion yen (up15.5 billion yen from FY2021) are planned.

Expanding Renewable Energy and Other Energy Businesses<Business expansion by leveraging fuel procurement advantages>
In the energy business, we are expanding the businesswith the aim of expanding the use of renewable energy. A
biomass power generation facility in Tokushima Prefecture being built as part of a joint venture with ITOCHUENEX CO., LTD. is preparing for operations to begin in
2022. Additionally, we are reinforcing the biomass fuelbusiness in conjunction with expansion of the energy

business. In Japan, we are increasing production of fuelwoodchips by making use of unused wood resources.
Overseas, efforts to increase procurement of palm kernel
shells for use as fuel continue in Indonesia and Malaysia,
while ensuring lawfulness and maintaining sustainability.

Oji Group’s Power Generation Sites
Oji Green Energy Tokushima
Operation to commence in 2022 (within the Oji
Paper Tomioka Mill)
Generating capacity: 74,950 kW
Joint venture with ITOCHU ENEX

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

Solar electric power plant*1 Renewable fuels: black liquor, etc.

Others
Initiatives that seek to contribute to thedevelopment of a low-carbon society including
the fuel procurement business for biomass
power generation, hydroelectric powerbusiness, and other businesses*2 Fuels made from waste: wood residue, bark, and RPF, etc.

Changes in Electricity SalesOji Green Energy Tokushima
Scheduled to start commercial
operation in 2022

(GWh)
2,400
2,000

Financial andNon-financial Data

Nursery where eucalyptus varieties are selected and raised (CENIBRA
in Brazil)

Our centralized purchasing team buys a variety of chemicals and raw materials that are competitive and sustainable. We are committed to environmentally sustainable and socially responsible procurement in complying
with Oji Group Partnership Procurement Policy.

FY201875.5

Sustainability Strategy

Forest Plantation Business

28.8

71.0

Governance Strategy

We are expanding production capacity, and are purchasing and selling
lumber and processed lumber products, primarily in Asia and Oceania. In
Japan, we are also seeking to strengthen profitability through sales expansion in the building materials field and other measures. We’re expanding
sales at offices we established in China and Southeast Asia.

55.5— Profitability —Lumber Processing Business

64.6

Initiatives for Profitability
Improvement

Dissolving pulp (for general rayon and special items)

We are promoting the electric power generation business by establishingand expanding electricity generation facilities using renewable energy, including wood biomass, hydroelectric power, and solar power. Leveraging
our sites in Japan and overseas, we are also working to strengthen purchase and market supply of biomass fuels in line with the energy businessexpansion.

billion

314.5
245.3

— Green Innovation —Energy Business

Operating Profit

285.6

Initiatives for ProductDevelopment

We 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, we are boosting sales globally including in
Asia, Europe and North America.

billion

326.5

420.0

— Sustainability —Pulp Business

Net Sales

%

405.0

Initiatives forEnvironmental Issues

President, Forest Resources andEnvironment Marketing COMPANY
Executive Officer
Oji Holdings Corporation

18.1¥314.5¥55.5

Net Sales Composition Ratio

Operating profit (¥bil.)What the Oji Group
Aims ForWe are comprehensively leveraging
assets owned by the Group,
including pulp, renewable energy,
afforestation, and lumber processing
to promote enhancement of thebusiness.
Yuji Onuki

Sales target for FY2030: ¥600.0 billion

History of the Oji Group’s
Value Creation

Changes in Net Sales Composition Ratio, Net Sales and Operating Profit

1,600
1,200
800
400
Biomass fuels (wood-based fuels)

0
2017

53

The Oji Group Integrated Report 2022

2018

2019

2020

2021

2022
2023
2024
Planned Planned Planned

The Oji Group Integrated Report 2022

54

Initiatives for Profitability Improvement –Profitability–
Forest Resources and Environment Marketing Business

Dissolving pulp
• Consider production and sales increase of dissolving
pulp with growth potential in light of increasing demand
for appareltons

Working in the way of Team Spirit to achieve
1 million tons of pulp sales in 2022

Pan Pac200,000 tons
Hardwood kraft pulp

55

The Oji Group Integrated Report 2022

Dissolving pulp

Pulp for cement

Pan Pac Mill
(North Island, New Zealand)

BC-TMPAs the trading arm of Oji Group, Oji Paper International Trading (Shanghai) Co Ltd(OPIT) is dedicated to marketing pulp and forest-related products to customers in
Asia. We have tried to increase pulp sales as much as possible since OPIT’s establishment in 2010. We finally have the chance to reach a milestone-1 million
tons of pulp sales in 2022.
One million tons is not an easy target to fulfill. We are facing a bunch of challenges and uncertainties: the cooling down of the Chinese economy, global logistic constraints, cost inflation and margin deterioration pressures for suppliers andcustomers, and unpredictable financial markets.
We, however, have a strong sales team, experienced, energetic but more importantly have a strong team spirit. Also, the market diversification we have been
exploring in recent years enables us to minimize the ups and downs risk and tomaterialize stable sales in today’s turbulent market environment.

James Li
General Manager, Business Unit,
Oji Paper International Trading(Shanghai)

The Oji Group Integrated Report 2022

Financial andNon-financial Data

CENIBRA Mill
(Minas Gerais, Brazil)

Softwood kraft pulp

Sustainability Strategy

Types of pulp:

Voice

Governance Strategy

600,000

tons— Profitability —1,200,000

The Global Forest Goal 2 includes 9 goals
for SDGs.

Initiatives for Profitability
Improvement

CENIBRA

Global Forest Goal 2
Enhance forest-based economic, social and environmental benefits— Green Innovation —160,000 tons

Forestry Activities that Contribute to Achieving the Sustainable Development Goals (SDGs)
The UN Strategic Plan for Forests 2017-2030 indicates that forestry activities contribute toachieving SDGs goals, and establishes six goals for international society to achieve by theyear 2030. This section introduces the Oji Group’s initiatives towards the second Global Forest Goal, as an example.
Promote the Employment of Local Residents
The forest plantation business (KTH) in Central Kalimantan, Indonesia, creates approximately
5,000 jobs for its planting, harvesting, converting and shipment services, thereby contributing
to the local economy.
Social Contribution Activities
In August 2021, the south of Central Kalimantan was hit by torrential rain, resulting in above
floor flooding in 12 villages in South Arut and North Arut which are located near KTH’s placeof business.
KTH provided relief goods (such as approximately 3 tons of rice, 7 thousand packages ofrehydratable noodles and 200 boxes of water) to these villages through the Regent of Kobar.
(Right picture)
In response to this, Regent Nurhidayah stated, “I do appreciate KTH’s sincerity and involvement in the local community, and would like to expect similar assistance from othercompanies.”
We will continue to assist local residents in cooperation with local governments.

Initiatives for ProductDevelopment

tonsJapan (Mills in Japan)

Oji Fibre Solutions

lumber production business, including strengthening
synergies with Oji Yoshimoto Ringyo and Oji Yoshimoto
Seizai acquired in August 2021
• Collect and utilize unused trees (branches, leaves, treetops and other tree parts generated during the felling)
for biomass fuels• Promote efficiency of planting work by utilizing drones
to transport seedlings— Sustainability —2,500,000
tons

Oji Yoshimoto Seizai’s lumber millInitiatives forEnvironmental Issues

Annual production capacity ofmarket pulp

340,000

Company-owned forest (Engaru,
Hokkaido)

Topics – Sustainability –Products are loaded onto a ship (CENIBRA)

Main Overseas Sites (Pulp Production Sites)

Jiangsu Oji Paper<Utilization and expansion of company-owned
forests in Japan>
The Oji Group owns and manages 188,000 ha of forests
in Japan. This is the largest of all forests owned by private corporate entities in Japan. The Group initiallyowned forests for producing raw materials for paper.
However, later, we have been enhancing the multiple values of forests, including growing raw wood for lumber
production and environmental contribution through forest
management.
• Promote effective utilization of existing company-owned
forests through forest road development and promoteacquisition of new forests• Promote value added utilization of raw wood in ourcompany-owned forests through integration with theWhat the Oji Group
Aims ForIn the pulp business, we continue to implement strategic
profit measures at key business sites to reinforce business foundations that are resilient to fluctuations in pulp
markets.
CENIBRA (Brazil)• Enhance cost competitiveness and sales capabilities,
and consider production increase, upon holding all voting rights of the company in May 2021
• Install most advanced & work saving manufacturing
facilities
Pan Pac (New Zealand)• Consider production increase to meet growing demand
for folding cartonsOji Fibre Solutions (New Zealand)• Made the company a wholly-owned subsidiary in March
2022• Implement measures to stabilize operations, improveyields, and conserve energy by introducing Oji Group’s
know-how and operational management methods

Expanding Lumber Processing BusinessHistory of the Oji Group’s
Value Creation

Enhancement and Expansion of Pulp Business56

Initiatives for Profitability Improvement –Profitability–

Printing and Communications Media Business
Sales forecast for FY2030: ¥150.0 billion
Net sales (¥bil.)

14.0¥244.5¥17.8

Net Sales Composition Ratio

Net Sales

Operating Profit

302.9

%

244.0
11.3

billionbillion

292.7

244.5
17.8

Operating profit (¥bil.)
257.0

250.0

11.2
7.0
(2.0)

(4.8)
FY2018FY2019FY2020

FY2021

FY2022 Planned FY2024 Planned

Fumio ShindoCommunications Paper
Business

We have various types of printing
paper used for different applications
including books, magazines, andcatalogs, etc.

We provide various output media
for information processing systems,
including copying paper and forms.

Collaboration with Other Group Segments by Maximizing the Use of Assets Owned

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The Oji Group Integrated Report 2022

Topics – Sustainability –To reduce greenhouse gas (GHG) emissions to address
climate change issues, we are proactively working toachieve Environmental Action Program 2030 including byimproving production efficiency, continuing to reduce energy consumption, and utilizing renewable fuels andwaste fuels. A key area for the reduction is the expanded
use of non-fossil fuels and biomass fuels as alternatives
to coal. We will make specific considerations on the conversion of these fuels, through “Tomakomai Mill #6 Boiler
Fuel Conversion Experiment Project,” which was adopted
by the Ministry of Economy, Trade and Industry for its“Subsidy for Design and Experiment Project toward Facil-

itation of Investment in Low-carbonization in Base Material Industry.” In addition, in connection with the effective
use of resources (paper/water recycling), we are working
to protect resources and reduce waste by promoting theuse of recovered paper, and promoting the effective useof waste and water resources in our manufacturing processes. Furthermore, we are offering a wide range of environmentally friendly products such as FSC-certified
paper, eco mark certified products, products compliant
with the Green Purchase Act, thereby addressing environmental issues and contributing to the realization of asustainable society.

The Oji Group Integrated Report 2022

Financial andNon-financial Data

The #12 machine at the Tomakomai Mill (relocated from Nayoro Mill)

multi-product, small-lot printing will expectedly produce
the effect of shorter delivery periods and stock reduction,and these renewed products are well received. As explained above, we capture market needs accurately andwork on the product development which contributes tothe reduction of environmental burden.

Sustainability Strategy

The #L-1 machine (retrofit of the #N-5 machine) at Tomakomai Mill“Oji Common-Use Pocketbook Paper” we developed

Governance Strategy

We are working to improve profitability and competitiveness, including building optimized production systems forthe entire group through collaboration with other groupsegments by determining future demand trends, andmaximizing effective use of pulp manufacturing facilities,
biomass boilers, and other assets. In October 2021, weconverted a newsprint machine to a machine for manufacturing containerboard at Tomakomai Mill. In April
2022, we also started operation of a special liner andspecial paperboard machine relocated from Nayoro Millof Oji Materia at the same mill. Other than this, we areproducing high-quality dissolving pulp by introducing
most advanced continuous industry processes for existing kraft pulp manufacturing facilities at Yonago Mill.
Overseas, utilizing existing pulp manufacturing facilities
and biomass boilers, etc., we built a new household basepaper machine at Jiangsu Oji Paper (China) (started operation in 2020).

— Profitability —Printing and Publication Paper BusinessInitiatives for Profitability
Improvement

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

— Green Innovation —Newsprint BusinessIn these days, in connection with GX (green transformation) strategy on which importance is placed in businessactivities, products and services which contribute to the
reduction of environmental burden are required to realize
a decarbonized and sustainable society. Oji Paper meets
our customers’ green procurement policy requirements,
including by developing light weight printing paper whichhelps reduce greenhouse gases from production andtransport of publications and expanding a lineup of FSC
certified PPC paper products based on the principle ofsustainable forest management. Working together with apublishers, we have also developed common-use pocketbook paper by integrating the qualities of paper products, each of which was used exclusively for each of the
publisher’s labels. This contributes to the GX strategy interms of increased logistics efficiency.
In the meanwhile, we are working on the review of ourrange of products and consolidation of paper products
for offset printing in order to enhance efficiency and energy conservation in the manufacturing process. We also
renewed paper products compatible with high-speed ink
jet printers for business forms, with respect to which

Initiatives for ProductDevelopment

Enhancement of Competitiveness through Product Development— Sustainability —President, Printing and Communications
Media COMPANY
Senior Executive Officer
Oji Holdings Corporation

Initiatives forEnvironmental Issues

Segment Overview
In FY2021, we had net sales of 244.5 billion yen (up 0.5 billion yen from FY2020) and operating profit of 17.8 billion yen(up 6.6 billion yen from FY2020). While demand for communications paper declined due to the growth of teleworking andthe trend of digitization of office documents in addition to continued decline in demand for newsprint and printing paper
for publication use, sales volume of printing paper for commercial printing use recovered due in part to the rebound fromthe stagnation of economic activity. In addition, since the effect of higher raw materials and fuel prices was offset in partby thorough cost savings at each production process, sales and profits increased.
In FY2022, net sales of 257.0 billion yen (up 12.5 billion yen from FY2021) and operating loss of 2.0 billion yen (down19.8 billion yen from FY2021) are planned.

What the Oji Group
Aims ForWe are increasing profitability andcompetitiveness by implementing
the production system restructuring,etc. in light of demand structure
trends through cooperation acrossgroup segments.

History of the Oji Group’s
Value Creation

Changes in Net Sales Composition Ratio, Net Sales and Operating Profit

58

Initiatives for Profitability Improvement –Profitability–

Corporate Management Group and Shared Service Companies
History of the Oji Group’s
Value Creation
What the Oji Group
Aims For

Ginpo Pack

Hotel New Oji

Oji Real Estate

Kyokuyo Co., Ltd. is a trading company that proposesand develops solutions to customers’ problems from users’ perspective. It purchases and sells various productsof the Oji Group and other companies mainly in paper
and packaging fields. These products include synthetic
resin materials and products, packaging materials, chemicals, and machinery, from upstream (raw and other materials) to downstream (finished products). Leveraging its
proposing ability, development ability and comprehensive
ability to accommodate diversifying needs in the changing social environment, it is working to evolve paper andpackaging, pursuing to create a more enriched society.

Ginpo Pack Co., Ltd. is a manufacturer which conducts
integrated planning, production, and sales of plastic containers for food packing. It offers high-quality packages
with unique packaging materials, using its many patents
and state-of-art technologies. The new material “Pulfine”
in which a high foaming ratio is realized with a single material, is more resistant to heat and more durable thanever and can reproduce steaming hot home cooking
when using a microwave oven. Ginpo is also committed
to the development of environmentally-friendly containers
using plant-derived biomass plastic.

Hotel New Oji Co., Ltd. is engaged in the hotel and flightcatering businesses. Grand Hotel New Oji, a 16-story city
hotel which is located in the center of Tomakomai City,
Hokkaido and has a banquet hall with a maximum capacity of 1,000 guests, three restaurants (Japanese,
Western and Chinese), bar and shops, is a landmark inTomakomai. In addition to this hotel business, we preparea wide variety of high quality inflight meals for domestic
and overseas airlines in the catering building at the New
Chitose Airport and also load the meals onto aircraft using large, specialized vehicles.

Oji Real Estate Co., Ltd. is a general developer active nationwide in the management and effective utilization of
the Oji Group’s owned land and the development andsales of quality-oriented condominiums, single-family
homes and developed residential land, as well as leaseand management of office buildings, condominiums, andcommercial facilities, and the renovation business. It also
has a construction and design division (first-class registered architect office) with good reputation for its technical capability, and conducts design, supervision, andconsultation in a wide range of areas including factories
and plants as well as public and private facilities.

Industrial water production system

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

Oji General Hospital

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

Oji General Hospital

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. It actively pursues new services, including thoserelating to waste water treatment in the water environment business, and fuel handling facilities in the biomass
power generation business. In addition, it is also promoting technical support for digital transformation (DX), suchas enhanced safety education utilizing VR-simulated disaster experience, remote maintenance using drones
equipped with thermographic cameras, as well as realization of working style reforms through improved operational efficiency using IoT technology.

As a shared service company, Oji Logistics Co., Ltd. operates mainly domestic and international logistics services for Oji Group products. In addition to the existing
operations, this year it made full-scale entry to 3PL (third
party logistics) services, using Urayasu Branch as its
base. It is now changed into a warehouse, operating 24
hours a day and 365 days a year as a hub for consumer
goods and e-commerce whose demand is growing mainly in the Greater Tokyo area. It is also accommodating achange in the operating environment surrounding the logistics industry such as “Logistics 2024 Issue,” to earntrust from customers of the Oji Group and othercompanies.

Oji General Hospital has 440 beds (of which 8 are in theICU) and 24 departments, providing advanced and quality medical care as a key hospital in the Higashi-iburi and
Hidaka medical area. It is designated as disaster basehospital, regional cancer treatment collaboration hospital,
and regional perinatal maternal and child medical center,and also provides guidance and training for residents asa designated clinical training hospital. In addition, it has
the nursing care facility for the elderly, “Care Life Oji,” inhouse nursing care supporting office Oji, and the central
regional comprehensive support center entrusted by Tomakomai City, working to provide secure and safe medical service.

Ishizuka-Oji Paper Packaging Co., Ltd. operates the paper beverage container business by combining the Oji
Group’s expertise in manufacturing and processing paperwith ISHIZUKA GLASS Co., Ltd.’s expertise in processing
and filling paper containers for a diverse range of contents. By having in place a domestic integrated production system covering papermaking of base papers
through to laminate processing and beverage packaging,and selling superior filling equipment from both Japanand overseas, as well as providing service and maintenance, it is working to ensure the stable supply ofhigh-quality, safe, and dependable products to dairy andbeverage manufacturers throughout Japan.

— Profitability —Initiatives for Profitability
Improvement

Kyokuyo— Green Innovation —Oji Homes Aoyama (Minamiaoyama, Minato-ku, Tokyo)

Initiatives for ProductDevelopment

The Grand Hotel New Oji— Sustainability —Environmentally-friendly containers using biomass plastic

Initiatives forEnvironmental Issues

Environmentally-friendly paper food containers proposed by Kyokuyo

Governance Strategy

The Oji Group Integrated Report 2022

Financial andNon-financial Data

The Oji Group Integrated Report 2022

Sustainability Strategy

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