Nippon Paper Industries Co., Ltd. has announced plans to close its Kushiro paper mill in Hokkaido, Japan, in September 2021. The mill's primary products are newsprint, publication paper and kraft paper.
Nippon Paper explained that it has already reduced approximately 760,000 metric tons of annual production capacity in order to achieve a proper balance between demand and supply during the period of the Sixth Medium-Term Business Plan (FY2019/3 - FY2021/3). However, the COVID-19 pandemic has accelerated the decrease in demand for some of its products.
"Domestic demand for newsprint and printing paper has been exacerbated by significant decreases due to stagnant economic activities in the backdrop of the spread of the COVID-19 in addition to structural demand decreases with the ongoing advancement of information technology," Nippon Paper said in a written statement. "In this environment, the Company has been implemented cost-reduction measures to improve profitability. However, it is expected that the decrease in demand for newsprint, printing paper and other types of paper will continue in the future.
"Accordingly, this withdrawal from the pulp and paper business at Kushiro Mill will be an action to optimize demand and supply balance and increase profitability."
The Kushiro mill operates two paper machines: paper machine No.6, which produces 104,000 metric tons per year of newsprint and kraft paper, and paper machine No.7, which produces 117,000 metric tons per year of newsprint and publication paper.
"All paper machines and relevant facilities at Kushiro Mill will cease production in August 2021 and will be shut down in September 2021. However, the Company will continue to conduct the energy sales business at the Mill in the future," Nippon Paper added.
Nippon Paper said it plans to transfer the large part of products at Kushiro Mill to other machines across its production platform and to outsource a part of its products to other companies.
About 250 employees will be affected by this closure, but Nippon Paper said that it will offer the employees jobs within its group of companies.
TAPPI
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