Nippon Paper to Shut Down Graphic Paper and Pulp Production at Earthquake-Damaged Kumamoto Plant

Nippon Paper Industries Co. will cease production of graphic paper and pulp at its earthquake-damaged plant in Yatsushiro, Kumamoto Prefecture, after determining that restoring or replacing the facility's production equipment would require three to four years and significant investment.

The company said Friday that it had decided to end production at the site following an assessment of the damage caused by a powerful earthquake that struck southwestern Japan in July. Nippon Paper plans to explore new business opportunities at the plant.

The company expects to record approximately 20 billion yen in earthquake-related losses for the financial year ending March 2027, including 15.1 billion yen in losses during the first half.

Including other disaster-related expenses, Nippon Paper forecasts a consolidated net loss of 40 billion yen for the full financial year, reversing a net profit of 11.7 billion yen recorded in the previous year.

To maintain supply, the company will transfer production of newsprint and other products manufactured at the Yatsushiro plant to its other mills in Japan. It will also outsource the production of certain products to other companies.

The decision marks a significant change in Nippon Paper's production operations following the earthquake damage, with the company opting against a lengthy and costly restoration of the affected manufacturing equipment.