The pulp and paper industry is undergoing a period of profound change. In developed countries, the shift toward paperless operations continues to accelerate, driving a steady decline in the consumption of graphic paper. Structural changes such as population decline have also led to a wave of consolidation across the industry, with leading paper manufacturers in Europe and North America engaging in large-scale cross-Atlantic mergers. We are now standing at a major turning point in our industry.
Although this may appear to be a time of crisis, periods of dramatic change also present opportunities. The challenges we face today have occurred in other industries in the past, and only those companies that successfully adapted to change have continued to thrive.
The KPP Group achieved significant growth under our Third Medium-Term Business Plan, transforming the very shape of our organisation. Through a series of M&A initiatives both in Japan and overseas, we expanded our regional footprint while broadening the range of products, services, and solutions we offer, evolving into a truly global enterprise.
However, in an increasingly uncertain external environment, simply repeating what has worked in the past will not ensure survival. We must avoid becoming complacent and continue expanding into new business domains. To capture emerging market opportunities, we must stay alert, gather insights swiftly, and boldly take on new challenges.
With a history spanning over a century, our Group now operates in 46 countries and regions and 194 cities worldwide, maintaining strong relationships with suppliers and customers across the globe. We will leverage these strengths to further solidify our position as a top-tier player in the industry, while proactively pursuing new business fields and swiftly advancing the transformation and expansion of our business portfolio.
When formulating GIFT 2030, our new long-term management vision marking the first step toward our next 100 years, we asked our employees around the world, particularly the generation who will lead the Group in 2030, two questions: “What kind of society will we live in by 2030?” and “What kind of company do we want to be at that time?”
Among the many responses we received, two points stood out in common: First, the aspiration to become a top-class company in each region and business segment; and second, the desire to foster a corporate culture that boldly embraces new challenges. Based on these insights, we defined our vision for 2030 as follows:
While pursuing the potential of paper—our founding business— we are also advancing the transformation of our business portfolio and striving to create new businesses and expand into new domains. We aim to become a top-tier global company by continuing to provide high-quality value-added products, services, and solutions that meet our customers’ needs.
To achieve this vision and goal, we formulated GIFT 2030, which is built on three pillars, the Business Strategy, the Sustainability Strategy, and the Financial Strategy, covering the respective areas of business, ESG, and finance.
Among these three pillars, the Business Strategy is the one we place great emphasis on, as it is essential to building a strong company that generates sound profits. To this end, we will go beyond the boundaries of the traditional paper business and pursue new areas of growth by focusing on four key initiatives: (1) Expansion of Business Domains, (2) Transformation of the Business Portfolio, (3) Pursuit of Global Synergies, and (4) Expansion of E-business and Promotion of Digital Transformation (DX). We believe that steadily implementing these initiatives is crucial to achieving our goals.
During the previous medium-term business plan period, performance fell short of expectations in the final fiscal year due to external factors such as geopolitical risks and inflation, as well as delays in responding to challenges in certain businesses, including the UK, China, and pulp operations. We take this outcome seriously and will use it as a foundation for improvement. Under the Fourth Medium-Term Business Plan, we will strengthen our earning structure so that we can stably generate around ¥15 billion in operating income per year, regardless of external conditions, and aim to achieve a higher level of ¥20 billion in the final year.
To achieve this goal, we will pursue four key initiatives under our Business Strategy, as mentioned earlier. In the area of Expansion of Business Domains, our business portfolio has already grown beyond paper to include packaging, visual communications, recycling, and films. Looking ahead, we will further broaden our scope by developing new products, reaching new customers, and creating new business models.
For example, in the European packaging business, our focus has traditionally been on packaging for automotive and machinery components. Going forward, we will broaden our target industries and customer base to reduce dependence on any single sector or client. Because overreliance on one industry could quickly affect our results if that market weakens, it is essential to continuously explore and expand into new business areas. To achieve this, we will fully leverage Group synergies by sharing customer and product information across our global network.
We will also expand the scope of our business regionally. This will involve extending our operations into regions where we have not previously had a presence, as well as into areas where our current footprint is insufficient. Expanding into the United States is a particular key objective of the Fourth Medium-Term Business Plan.
Under the heading Transformation of the Business Portfolio, we will accelerate the transition from ‘paper’ to ‘packaging’ and ‘visual communications’ across the entire Group. This shift was previously initiated by our two overseas companies, Spicers and Antalis. Both companies have pursued bolt-on M&A, acquiring businesses that complement existing operations by adding new products, customers, markets, and regions. This approach has steadily expanded their packaging and visual communications businesses, and we will continue to drive such initiatives. At the same time, we will actively invest in the visual communications and packaging fields in Japan, further promoting the transformation of our domestic business portfolio.
To implement these initiatives effectively, Pursuit of Global Synergies is essential. During the previous plan, we achieved synergies mainly in the areas of finance and compliance, notably by establishing strong internal control and audit systems that give us a clear understanding of the Group’s management realities. In the current plan, we position the creation of business synergies in purchasing, products, customers, and marketing as one of the most important objectives.
To strengthen this framework, we established two new organisations in August 2025. The Group Purchasing and Products Division promotes Group-wide sharing of procurement and product information, while the Group Marketing and Sales Information Office oversees the sharing of customer information, mutual support for new customer acquisition, and the development of optimal sales strategies. Our three regional headquarters—Kokusai Pulp & Paper, Spicers, and Antalis—each have long histories and solid business foundations built on products and services tailored to their respective markets. Each company is a top-class merchant in its region, and by working together, we expect to generate significant synergies. By sharing and deploying their business models across the Group, we aim to develop new business domains and achieve further growth while securing market share and strengthening our position in existing businesses.
Lastly, in the area of Expansion of E-business and Promotion of DX, both overseas companies have made significant progress through their online shops, where the share of customer purchases made via the internet continues to grow each year. Going forward, we will promote the expansion of E-business across the entire Group to enhance operational efficiency for both our customers and ourselves, while further broadening our customer base. In addition, by leveraging digital technologies such as AI, we aim not only to improve efficiency but also to redesign our overall business model and create new added value.
These four key initiatives are already underway, and we intend to implement these changes quickly within the available timeframe.
At KPP Group, one of the core values in our corporate philosophy, The KPP Group Way, is to Cultivate Accountable People. True to this belief, we encourage our employees to think and act independently.
Our company has always fostered an open and liberal organisational culture, which provides a fertile ground for developing self-reliant individuals, and this has been a key part of our company’s ethos from the very beginning. To drive transformation, it is not enough to rely on others; each individual must think independently, voice their opinions, and act on what they truly believe has value, without being swayed by others. At the same time, we recognize the importance of enhancing our HR systems to further encourage such proactive behaviour.
As we work to expand our business domains, we are reviewing our HR evaluation systems to ensure that cross-selling, information sharing and new initiatives aimed at realizing Group synergies are properly reflected in employee assessments. In addition, we are preparing to launch an internal entrepreneur program that will invite employees to propose and lead new business ventures. Each selected project will receive funding for three years, after which we will determine whether to develop it into a full-scale business based on the results achieved.
New ventures have already emerged from Kokusai Pulp & Paper even before the launch of this program. Examples include the development and sales of OJO+ Paper Turf, an artificial grass product made from paper, and BMecomo, a system designed to enhance operational efficiency at biomass power plants. Through the internal entrepreneur program, we aim to further expand and accelerate such innovation across the entire Group.
Furthermore, to commemorate our 100th anniversary in 2024, we established the KPP Group Awards, an internal recognition program that honours employees and teams for their outstanding contributions in their respective fields. We plan to continue this initiative throughout the Fourth Medium-Term Business Plan and present awards on a broader scale in the final year.
Through these measures, we will foster a corporate culture that encourages individuals to think and act independently, supports new challenges, and creates an environment where everyone can thrive.
Since transitioning to a holding company structure in 2022, we have striven to provide our shareholders and investors with transparent disclosure of information and open communication.
Beginning with the fiscal year ending March 2025, we have adopted a new dividend policy that targets a consolidated dividend payout ratio of around 30% and sets a consolidated dividend on equity (DOE) of no less than 3.0% as the minimum threshold. Furthermore, as part of our flexible shareholder return strategy, we are proceeding with the acquisition of treasury shares and introducing a shareholder benefits programme, with the aim of further enhancing shareholder returns.
What we strive for is not merely business expansion in scale, but to be a strong and resilient company that continuously generates sound profits by providing high-quality, high-value-added products, services, and solutions to our customers.
We sincerely hope that all our stakeholders will continue to share our expectations for the KPP Group’s ongoing global growth.
October 24,2025
