Nippon Paper to Temporarily Suspend Hungarian CMC Business, Expects ¥5 Billion Loss

Nippon Paper Industries Co., Ltd. said it will temporarily suspend the business of its Hungarian consolidated subsidiary, Nippon Paper Chemicals Europe Zrt. (NPCE), citing worsening conditions in the electric-vehicle market and difficulty securing stable earnings.

The suspension is scheduled to take effect on December 31, 2026. Nippon Paper expects to recognize an extraordinary loss of approximately ¥5.0 billion in the fiscal year ending March 31, 2027, including an impairment loss on non-current assets. The company said the estimate may change during the subsequent closing process.

NPCE was established in Hungary in September 2022 to produce and sell carboxymethyl cellulose (CMC), marketed as SUNROSE MAC®, for lithium-ion batteries used in electric vehicles. Local production began in 2025.

Nippon Paper said the EV market environment in Europe and North America has become increasingly challenging amid reviews of environmental regulations, changes in policies promoting EV adoption and revisions to subsidy systems. Slower EV market growth and intensified global competition have made it difficult for NPCE to achieve stable earnings, despite efforts to develop customers and improve cost competitiveness.

According to the company, NPCE had 24 employees as of August 31, 2026, and is wholly owned by Nippon Paper Industries. For the year ended December 31, 2025, the subsidiary recorded net sales of €74,000 and an operating loss of €5.981 million.

Nippon Paper said it will consolidate CMC production at its Gotsu Mill in Japan and seek to strengthen competitiveness by improving production efficiency. The move is part of the structural reforms outlined in its Medium-Term Business Plan 2030.