Nippon Paper Targeting Southeast Asia for Growth

Tokyo, April 7 (Jiji Press)--Japan's Nippon Paper Group Inc. <3893>
aims to strengthen its businesses abroad, mainly in Southeast Asia, after it
gave up on efforts to integrate operations with domestic industry peer Rengo
Co. <3941>, President Yoshio Haga has said.

Haga said in a recent interview that his company, which ranks
second among Japanese paper producers, views Vietnam and Indonesia as
potential targets for future expansion due to growing local populations.
Nippon Paper Group earlier decided to invest in Taiwan's leading
paper maker Yuen Foong Yu Paper Mfg. Co. and acquire Australian Paper, a
unit of PaperlinX Ltd.
Although Nippon Paper Group had hoped to strengthen its domestic
paperboard operations through an integration with Rengo, Japan's top
paperboard maker, the two firms have decided to end their partnership due to
a difference in their strategies, Haga said.
Nippon Paper Group is devising its business strategy from a global
perspective while Rengo wants to serve local clients in Japan, he explained.
Still, he said that the Japanese paper industry is likely to see
further consolidation moves following a recently announced business
integration plan between Hokuetsu Paper Mills Ltd. <3865> and Kishu Paper
Co. <3882>.
Haga said that the paper market is seen to have hit bottom in
February, but added that market conditions in April-June need to be examined
carefully before determining whether the market has started a full-fledged
recovery.
Regarding Nippon Paper's earlier decision to suspend the operations
of 15 domestic production lines in response to sluggish demand, Haga
indicated that consolidation of the facilities may become an option unless
demand recovers strongly.