Daio Paper to Dissolve and Liquidate Indonesian Subsidiaries Amid Challenging Market Conditions

Daio Paper Corporation has announced its decision to dissolve and liquidate its Indonesian consolidated subsidiaries, PT. Elleair International Trading Indonesia (EITI) and PT. Elleair International Manufacturing Indonesia (EIMI), following a resolution approved by its Board of Directors on July 17, 2026.

According to the company, the decision reflects significant changes in Indonesia's market environment since the subsidiaries were established. Daio Paper launched EITI in March 2013 to strengthen local marketing and expand sales of its baby diaper business, followed by the establishment of EIMI in November 2014 to secure a stable supply and improve manufacturing cost efficiency.

The company said the business environment has deteriorated due to a combination of rising global energy and raw material costs and intensifying market competition. With the outlook remaining uncertain, Daio Paper concluded that continuing operations was no longer feasible after evaluating options including business transfers and continued operations.

Daio Paper stated that the move forms part of the structural reforms outlined in its Fifth Medium-term Business Plan and is intended to further improve the company's financial position. At the same time, it said it will accelerate new growth investments under the overseas business strategy announced in August 2025 to strengthen the foundation for future international expansion.

EITI, located in Bekasi, Indonesia, was engaged in the import and sale of paper diapers, while EIMI manufactured paper diapers at the same industrial location. Both companies are majority owned by Daio Paper and have reported declining net sales and losses over the past three fiscal years, according to the company's disclosure.

Daio Paper said the liquidation will be completed following the required procedures under Indonesian laws and regulations, although a specific timetable has not yet been determined. The company added that it will promptly disclose any material impact on its consolidated financial results if required.