Message from the Chairman and CEO

On October 1, 

 

KOKUSAI PULP & PAPER CO., LTD. adopted a holding company system through an absorption-type company split. The splitting company in the absorption-type split will change its trade name to KPP Group Holdings Co., Ltd. and maintain its listing as a holding company. In addition, the Successor Company will change its name from Kokusai Pulp & Paper Split Preparation Company to KOKUSAI PULP & PAPER CO., LTD., and will inherit the rights and obligations of the pulp and paper wholesaling businesses. We ask for your continued support.

 

As a result of the series of overseas M&As that preceded the transition to the holding company system, the overseas sales ratio has reversed the domestic sales ratio and is expected to increase further in the future. In addition, 90% of our 100 affiliates are located overseas, and more than 80% of our employees are non-Japanese. As described above, the scale of business at the time of listing in 2018 and the current situation after the implementation of M&A have significantly changed, including the portfolio, and the way of group management has become a new issue.

 

The purpose of this transition to a holding company system is to build a Group management structure that will strengthen global governance, deepen portfolio reforms and new businesses, and promote sustainability management with greater speed in line with business expansion.

 

In the pulp and paper industry, the spread of the Internet has led to a shift to paperless operations. The graphic media market, which has been our mainstay business until now, has already shrunk to under 25% of total demand of paper in the developed countries. This market includes newsprint, printing, writing, and information paper. Accordingly, we believe we do not have to care too much about pessimism about excessive paperless operations, and it is necessary to focus on the packaging, sanitary and processed paper fields, where demand is growing.

 

In addition, the expansion of e-commerce has led to growth in demand for corrugated packaging, the substitution of plastic for paper products is progressing, and the use of sanitary paper is spreading as a measure against new viruses. Thus, it is no exaggeration to say that the main battlefield for paper has already shifted to a new stage. Furthermore, the shrinking demand for graphics in major countries will be compensated for by the growing demand for packaging and sanitary paper in India and African countries, which have huge demographic bonuses.

 

The KPP Group will share future forecasts based on data management with the entire Group. We will contribute to the realization of a sustainable society through the strength of our comprehensive recycling-oriented business in Japan and our overseas Group companies that promote package and visual communication businesses.

Madoka Tanabe
Chairman & Chief Executive Officer
October 2022