Message from the President｜Japan Pulp & Paper Company Limited

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Message from the President

Promoting Sustainable Management and Creating Innovation by Enhancing Functions and Added Value

In the Medium-term Business Plan 2023 launched in April 2021, based on our long-term vision up to 2030, we set the two qualitative targets of “creating added value in the new normal” and “evolving into a group that pursues excellence even beyond the paper industry” and the quantitative target of consolidated ordinary profit of JPY 15 billion by the final year of the plan (FY2023).

The continuing decrease in demand for graphic paper due to declining birthrates and the digitization of information media in Japan and other advanced countries, the stagnation of economic activities and greater restrictions on movement on a global scale due to the COVID-19 pandemic, the worldwide slowdown of ocean transport due to a shortage of shipping containers, and the steep global rise in the costs of resources, materials, and labor are just some of the factors that we are up against. In a situation where the expansion of overall demand cannot be expected, our group is focusing on efficiency and profitability rather than volume and sales amount. Based on our policy of shifting to a more resilient structure, we have been promoting cost cutting through streamlining while pursuing profits based on enhanced functions and added value.

As a result, in the consolidated financial results for fiscal 2021, the first year of the Medium-term Business Plan 2023, revenue was JPY 444.8 billion, or net sales of JPY 521.7 billion according to the previous accounting standard of revenue recognition in Japan, an increase of 12.7% year-on-year. Ordinary profit was JPY 15.1 billion, up 68.2% year-on-year, and together with operating profit and profit attributable to owners of parent profit at each stage reached record highs, enabling us to reach the target of JPY 15 billion in ordinary profit for the final year of the Medium-term Business Plan 2023 two years ahead of schedule.

The most distinctive feature of these results is that, due to the business diversification we have been promoting, the balance of profit contribution from each of the five business segments has greatly improved. Even in the current increasingly uncertain social climate, the group’s resilience against unforeseen risks has been significantly strengthened, and we believe that we have succeeded in building a very stable consolidated profit structure.

On the other hand, we still have some way to go in achieving the two qualitative targets of the Medium-term Business Plan 2023, and we will continue with our efforts in implementing the measures formulated in each business segment.

Companies are being urged to do more through their business activities to solve various emerging social problems such as climate change, resource depletion, marine pollution, and human rights abuses. Against this social backdrop, in April 2022, we established the Executive Sustainability Committee and its operational organization, the Corporate Sustainability Division to strengthen our sustainability promotion framework. At the same time, we revised the Charter of Corporate Behavior and established the Sustainability Policy and other related policies.

In addition to handling the environmentally friendly material that is paper, our group has been engaged in business activities that take into consideration resource recycling, such as our paper recycling business, paper manufacturing business using recovered paper as raw material, power generation business using renewable energy, and our comprehensive recycling business.

Taking the strengthening of the sustainability structure framework and development of related policies as our starting point, in order to more actively and proactively promote our group’s sustainable management, which will simultaneously enhance our corporate value and resolve social issues, in June we disclosed information based on the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), and we are continuing to work diligently on identifying the group’s materiality, establishing a value creation process, connecting these to the SDGs, and formulating our first integrated report.

To ensure that we steadily achieve the quantitative and qualitative targets in the final year of the Medium-term Business Plan 2023, we think it is essential that we instill within the group a thorough awareness that everything begins and ends with our Corporate Philosophy, and that the group works together to make innovations by enhancing functions and added value.