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Nippon to Idle Machines, Coaters in Post-Quake Market Adjustment

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Nippon Paper Group Inc., Japan, reports that a plan to revitalize its paper business, in the wake of the March 11 Japanese earthquake, includes temporarily and/or permanently shutting down eight paper machines and four coating machines, representing a combined 800,000 metric tpy of output, equivalent to about 15% of the Group's domestic production capacity. The plan, which targets facilities and machines with high manufacturing costs, also involves withdrawal from certain unprofitable paper products. Additionally, the company says it will reduce fixed costs to boost its competitiveness, including a zero-oil initiative at major mills to manage the risk of future rises in fossil fuel prices.

The machines to be shutdown are:

  • Ishinomaki Mill—PM 4 (40,000 mtpy woodfree papers), PM N3 (88,000 mtpy groundwood papers), coating machine 1 on PM 7 (112,000 mtpy coated papers)
  • Iwanuma Mill—PM 2 and coating machine 30 (108,000mtpy coated papers)
  • Fuji Mill (Suzukawa—PM 7 (60,000 mtpy industrial papers), PM 8 (86,000 mtpy business communications papers), PM 9 (145,000 mtpy business communications papers), PM 13 and coating machine 33 (137,000 mtpy coated papers)
  • Iwakuni Mill—Cast coating machine 1 (7,000 mtpy coated paper)
  • Yoshinaga Mill—PM N2 (86,000 mtpy business communications papers).

After the capacity reductions, the Group's paper production capacity will be 4,360,000 million metric tpy. Production at the Ishinomaki Mill will resume later this year and into next year, depending on market trends. PM 7, which had produced the base paper for Ishinomaki Mill's coating machine 1, will produce business communication papers after the resumption plan is implemented.


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