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| Nippon Paper To Cut Domestic Capacity By 15%, To Up China Co Stake |
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http://www.sbdailynews.com
2011-08-08 |
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TOKYO -(Dow Jones)- Nippon Paper Group Inc. (3893.TO) said Wednesday that it will scale down its annual domestic paper production capacity by about 15% by September 2012, in the face of shrinking domestic demand and production facility damage sustained in the March 11 natural disaster.
But the Japanese paper and pulp maker said it will ramp up its presence outside Japan, announcing that it will buy an additional stake in Lee & Man Paper Manufacturing Ltd., China's second biggest maker of base paper for use in corrugated cardboard in a deal valued at Y9.4 billion.
Nippon Paper's stake in Lee & Paper will increase to Y15.32% from the current 11.65%, the company said. The transaction is slated to take place Aug. 5.
Explaining the decision to cut back production by 800,000 metric tons at its paper-making facilities, the company blamed a combination of persistently weak domestic demand for paper and damage sustained by its Ishinomaki facility in northern Japan.
The move will trim the company's annual production capacity to 4.36 million tons per year.
The company's Ishinomaki facility was filled with sediment from the tsunami, and almost all its inventory was damaged. Nippon Paper said it will gradually resume production at the facility from September.
The production cutback will also result in the loss of 1,300 jobs, or about 15% of the company's paper business work force. |
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