150 Years of History

In 1867, Eiichi Shibusawa, a member of the Akitake Tokugawa delegation dispatched to observe Western countries in Europe, became convinced that Japan needed to develop its culture and civilization in order to become a modern nation, and he came to believe that printing and paper manufacturing businesses, which support the publication of books and newspapers, constituted a key source of civilization. However, it was difficult for the Japanese technology of the day to manufacture large volumes of paper suitable for Western printing methods at low cost, so he decided to create a business to manufacture domestic paper.

Shibusawa created a significant plan to create a self-sufficient domestic paper market. To that aim, he persuaded the Mitsui, Ono, and Shimada gumi (corporations), which were charged with the exchange business for the government and thus held great power in the Japanese economy, that, in its current state, Japan’s paper industry had little opportunity for short-term profit and required an injection of ample financial resources along with some courage and insight, and he urged them to establish a company.

On February 12, 1873 the National Printing Bureau of the Ministry of Finance approved the establishment of Shoshi Kaisha, the predecessor of Oji Paper. Shoshi Kaisha ran short of funds shortly after leading investors Ono Gumi and Shimada Gumi went bankrupt in 1874. However, the company was able to overcome these difficulties, thanks to some additional investment from Mitsui Gumi and a loan from First National Bank, and the construction of its first mill was completed in 1875. Periodic large orders from the government for paper to create land certificates relating to Japan’s Land Tax Reform helped support the company during this founding period.

Shoshi Kaisha changed its name to Seishi Kaisha (paper manufacturing company) in 1876 and was subsequently reorganized into Oji Paper Co., Ltd. following revisions to Japan’s Commercial Code and the Commercial Code Enforcement Ordinance in 1893. During his lifetime, Shibusawa was involved in the establishment and management of roughly 500 companies and Shoshi Kaisha is a pioneering example of his contribution to the creation of modern Japan.

Oji Paper opened its Keta Mill in the Tenryu River basin of Shizuoka Prefecture in 1889 and Chubu Mill in 1899 and began producing paper made from wood pulp. While pressing ahead with its quest to produce domestic paper, Oji Paper worked hard to establish new technologies and improve its capabilities. Shibusawa resigned as the head of the company after Mitsui Bank underwrote a capital increase to fund the construction of a new mill, which strengthened Mitsui's participation in the company’s management. The change in management created confusion within the company and the anticipated new mill was hindered by repeated flooding of the Tenryu River and other factors. Oji Paper suffered a serious financial slump as a result.

Umeshiro Suzuki, who was dispatched by Mitsui Bank to rebuild the company, declared that it would be absolutely impossible to secure the continued existence of the company for the next 50 to 100 years or more without constructing a large, state-of-the-art mill, so he set about constructing a mill that would form the backbone of the company’s vision for the next 100 years. Tomakomai, Hokkaido was selected from a range of potential nationwide sites as the location for the new mill because the abundant waters of nearby Lake Shikotsu and the vigorously flowing Nassou Falls behind the site rendered it the most suitable location for generating hydroelectric power. The site was also surrounded by vast primeval forests that could serve as raw materials for papermaking.

The Tomakomai Mill, which took roughly five years to commence operations, became known as the best paper mill in the East. Thanks to the mill, Japan was able to produce its own newsprint, and a self-sufficient domestic production system was successfully established.

During the Meiji 20s and early Taisho era, the demand for Western paper in Japan grew as the newspaper industry developed and paper-manufacturing companies started appearing one after the other. Two such companies, Fuji Paper, founded in 1887, and Karafuto Industries, established in 1913, began competing with Oji Paper.

The Japanese economy boomed during World War I, but the nation subsequently suffered from a post-war depression and the Great Kanto Earthquake. Fuji Paper and Karafuto Industries were affected by the Showa Financial Crisis and the Great Depression. Business performance deteriorated due to worsening market conditions following a rapid appreciation of the Japanese yen caused by the lifting of the gold embargo by the Hamaguchi Cabinet and by higher paper imports. Performance was also affected by the stagnation in exports caused by an escalating drive in China to reject Japanese products. Many were concerned that the Japanese paper industry would not be able to survive if the situation continued and a successful three-way merger between Oji Paper, Fuji Paper, and Karafuto Industries was pioneered in 1933 thanks largely to the efforts of Oji Paper president Ginjiro Fujiwara. All three companies were counted among the top five listed mineral and industrial companies in Japan in the second half of 1929 in terms of total assets. With paper manufacturing at Oji Paper accounting for 80% or more of Japan’s total paper production, it became known as the “Great Oji” era. One scholar judges that the creation of Great Oji heralded the era of large companies in Japan.* *M&A Online【The History of M&A in Japan】 “The Merger of Three Major Paper Manufacturing Companies that Heralded the Era of Large Companies” (Takeo Kikkawa)

Oji Paper launched its tree-planting operation in roughly 1893 in the Tenryu River area where its Keta and Chubu mills were located. By 1914, the company boasted approximately 1,729 hectares of forest.

When Oji Paper started building a presence in the northern island of Hokkaido with the opening of the Tomakomai Mill in 1910, the company strengthened its efforts to acquire company-owned forests and tree-planting operation in Hokkaido under the guidance of Ginjiro Fujiwara. Fujiwara was driven by a desire to preserve precious forest resources and advocated that “those who use trees should be obliged to plant trees.” Oji Forestry was established to help promote the efficient management of company-owned forests, which had more than doubled in terms of area following the three-company merger in 1933. The approximately 79,000 hectares of company-owned forest acquired in Hokkaido before World War II forms the basis of Oji Paper’s forestry holdings today.

Japan lost some of its forestry resources in Karafuto and other overseas territories following the nation’s defeat in the Pacific War and the securing of a stable supply of wood materials became an increasingly pressing issue for the paper industry as the nation’s postwar economic recovery sent demand for lumber soaring.

Following the postwar three-company split, Tomakomai Paper (the surviving company of Oji Paper) inherited approximately 66,000 of the 85,000 hectares of company-owned forests under management prior to the split. Tomakomai Paper continued its tree-planting operation to create pulp reserve forests. In 1956, the Institute for Forest Tree Improvement (later the Forestry Research Institute) was established in Kuriyama, Hokkaido to research how to improve the breeding of different tree varieties and the company worked hard to propagate highly productive forest resources using fast-growing tree species.

Oji Paper started importing wood chips in the 1960s, and the company built pulp mills in New Zealand and Brazil in the early 1970s as part of its tree-planting operation. The Earth Summit held in Brazil in 1992 helped reaffirm the important role that tree-planting operations play in achieving sustainable forest management, and Oji Paper has been actively implementing forestation operations in Australia, New Zealand, Southeast Asia, and other areas for the purpose of securing woodchip imports since the 1990s.

The Pacific War ended on August 15, 1945 following the unconditional surrender of Japan. At one point, Oji Paper accounted for 80% of Japan’s total paper production. However, in the immediate aftermath of the war, the company’s production capacity declined to 29.6% of the paper industry and 32.4% of the pulp industry. Despite the surplus of workers at domestic factories, Japan established the Committee for Demobilization and Repatriation of Overseas Japanese immediately after the war. Oji Paper Managing Director Keiji Nakajima, who became company president in 1946, served as the chairman of the demobilization committee. He declared that, “even if it meant shutting down one or two factories, we have to save these people.” When the war ended, over 10,000 Oji Paper employees located in Karafuto, Manchuria, and other overseas territories were embraced unconditionally.

The paper industry is an inherently cultural and peaceful industry and was not actively involved in the war. However, due to its high market share, Oji Paper became a target of the Law for the Elimination of Excessive Concentration of Economic Power promulgated in 1947 and negotiations with the GHQ to dismantle the company were launched (the law initially targeted 325 companies but, ultimately, only 11 companies, including Oji Paper, were dismantled following some changes in the American occupation policy). Despite the prolonged negotiations, Oji Paper overcame various difficult challenges and continued to negotiate tenaciously. Thanks to those efforts, the company was dismantled into three companies compared to the original proposal for a nine-company split.

The former Oji Paper was divided into three companies: Tomakomai Paper, Jujo Paper, and Honshu Paper, and we restarted our journey as Tomakomai Paper on August 1, 1949. At the time of the split, the then president Keiji Nakajima encouraged all employees by saying that the Oji spirit and ideals would persist across all three companies for a long time and that he would never stop celebrating all of the companies’ future successes.”

Tomakomai Paper, relaunched as the surviving company of Oji Paper, had only one paper mill, namely the Tomakomai Mill, and produced only one product, namely newsprint. While Tomakomai Paper boasted outstanding production capabilities compared to other mills in Japan, its underlying management base was not robust due the fact that it only produced one product and that its production facilities were located some distance from its end consumers. In order to develop into a paper company that could contribute more meaningfully to Japan’s reconstruction and development efforts, Tomakomai Paper began envisioning the construction of a second mill on the main island of Honshu as soon as it was relaunched and started looking for a site in the city of Kasugai in Aichi Prefecture. The aim was to create a mill that boasted the most up-to-date facilities in the world. The mill was extremely advanced, using hardwood as raw materials in anticipation of the future and boasting Japan’s first kraft pulp continuous evaporation facility.

The Kasugai Mill began operations in June 1952, producing single-sided gloss kraft paper and pure white paper rolls as well as woodfree paper (later changed to high-grade paper). In the following year, Tomakomai Paper established an integrated system spanning the production of pulp and the making of paper using the kraft bleaching process, which became the driver of subsequent growth.

In 1952, we changed the company name from Tomakomai Paper to Oji Paper Industries, and then adopted the name of Oji Paper once again in 1960.

Demand for paper grew significantly on the back of the wave of strong economic growth. Since 1970, Japan has become one of the leading paper and paperboard producers in the world. Around that time, a government-controlled company in Brazil, Companhia Vale do Rio Doce, asked for some help via ITOCHU Corporation with a tree-planting operation to promote the export of woodchips and pulp to Japan. This provided Oji Paper, which was already looking to encourage the use of overseas hardwood trees as a means of securing raw materials, with the opportunity to expand the tree preservation philosophy handed down from Ginjiro Fujiwara beyond Japan’s borders.

In 1971, a group of 11 pulp manufacturers, including Oji Paper, joined forces with ITOCHU Corporation to establish a research company. In June 1973, the research company was reorganized into the Japan Brazil Paper Pulp Resources Development Co., Ltd (JBP) and the Celulose Nipo-Brasileira S.A. (CENIBRA) joint venture with Companhia Vale do Rio Doce was launched in September of the same year. Shortly after, the Japanese cabinet agreed to support the project through the Overseas Economic Cooperation Fund, stating that it would “help advance Brazil’s economic development and economic exchange between Japan and Brazil and also contribute considerably to the building of friendly relations between the two countries.” Combining Japan’s forestation and pulp manufacturing technologies with Companhia Vale do Rio Doce’s plantation resources and railway & port transportation system helped generate a sustainable business management system that spanned the production and planting of seedlings to the manufacturing and retail of pulp. The project has since overcome many difficulties and earned praise as a large-scale cooperative project between Japan and Brazil from the then Crown Prince and current Emperor of Japan for the Reiwa era when he visited Brazil in 2008 to mark the 100^th anniversary of Japanese immigration into Brazil. On that occasion, Emperor Naruhito said that he was pleased to see that the CENIBRA paper and pulp business and other ventures had proved successful representative examples of Japan-Brazil economic cooperation.

In the 1990s, Japan’s economic bubble burst and the country was plunged into a rapidly deepening depression. The paper and pulp industry, which had continued its capital expenditure during the bubble period, suffered from oversupply. As globalization progressed, the securing of environment-conscious global resources emerged as an increasingly important issue and international competition in that area intensified. An increasing number of mergers and M&A opportunities started to appear both inside and outside Japan, with the merger between Jujo Paper and Sanyo-Kokusai Pulp being announced in July 1992.

Oji Paper had already been expanding its business through mergers with Kita Nippon Paper in 1970, Nippon Pulp Industries in 1979, and Toyo Pulp in 1989.

Then, in October 1993, Oji Paper decided to merge with Kanzaki Paper in order to maintain its position as a leading company in a difficult business environment. The predecessor of Kanzaki Paper, Oji Paper Kanzaki Factory, was split off from Oji Paper after the end of the war. Kanzaki Paper offered a range of high value-added products, such as art paper, cast coated paper (a type of coated paper), carbon-free paper, and thermal paper and Oji Paper had always greatly admired the company’s technical capabilities and sales prowess. The merger was prompted by a desire for the two former Oji companies to set aside their minor differences and join forces to establish an even stronger and more stable management foundation and pave the way for greater development and prosperity.

After the merger, the company name was changed to New Oji Paper, which became a leading manufacturer not only of newsprint and packaging paper, but also in the field of coated paper.

While the emergence of two major manufacturers has helped the pulp and paper industry recover from the damage caused by the collapse of Japan’s bubble economy, competition at the international level has intensified, as illustrated by the merger of Kimberly-Clark and Scott Paper in 1995 to create the world’s largest tissue paper manufacturer and the M&A activity pursued by the world’s largest pulp and paper manufacturer, International Paper. Against that backdrop, New Oji Paper decided to merge with Honshu Paper to help ensure the company’s survival in the global market. Honshu Paper had been split from Oji Paper as part of postwar three-company split and had since blossomed into Japan’s leading manufacturer of paperboard. This large merger was facilitated by the determined resolve of both companies to establish strong international competitiveness.

In view of the great expectations from both inside and outside Japan, we decided to revive the Oji Paper name to aid our quest to become an international comprehensive paper manufacturing company in both name and reality, and we created a new company symbol to illustrate our strong conviction and determination.

On October 1, 1996, the two companies, which had been forced to part ways and follow separate fortunes, joined forces once again after 47 years. This represented a considerable step forward in Oji Paper’s quest to become a powerful and world-leading comprehensive paper manufacturing company and a company that continues to confidently walk the noble path laid out by its veteran founder Eiichi Shibusawa and of which all employees can be proud.

The environment surrounding the pulp and paper industry had reached a turning point in the face of a declining birthrate and aging population in Japan, the development of information and communication technologies, and the tremendously rapid progress of borderless operations and globalization. To ensure Oji Paper stays abreast of the times and to achieve sustainable growth, we have worked hard to increase corporate value by adopting the pursuit of structural business transformation through reform as our basic management policy. We have consolidated or suspended facilities in areas where the market is shrinking and chosen to actively invest in Asia, where demand is growing. We began pursuing a full-fledged expansion into Southeast Asia and Oceania from around 2010 and, by 2022, Oji Paper had expanded its reach to over 40 bases across nine countries. Since increasing the level of Japanese capital in the afore-mentioned CENIBRA project to 100% in 2001, CENIBRA now plays a central role in the Oji Group’s overseas strategy as a subsidiary of Oji Holdings.

In order to maximize the efficiency of Group management through accelerated decision-making and clearer management responsibilities within each business group, Oji Paper split some business divisions and indirect departments and made a new fresh start as Oji Holdings Corporation, a pure holding company, on October 1, 2012.

Oji Holdings aims to use its new structure to promote globalization and develop as an innovative value-creating company. We formulated a new corporate slogan, “Beyond the Boundaries,” that emphasizes our determination to move forward into the future unfettered by conventional frameworks. We also established the OJI Communication Mark at the same time to illustrate the unity of the Oji Group.

Based on the belief of our ancestor who rejuvenated the former Oji Paper, Ginjiro Fujiwara, that “those who use trees should be obliged to plant trees,” the Oji Group continues to recycle forests by planting, nurturing, and cutting down trees and planting them again in the Oji Forests that it owns in Japan and overseas. Originally motivated by the need to secure raw materials, since the 1990s we have learned to focus more on demonstrating the multifaceted functions of forests, including their role in environmental conservation. In 2020, Japan announced its aim to achieve carbon neutrality by 2050 and we marked that occasion by establishing our Environmental Vision 2050 to help achieve a sustainable society. We also clarified our Environmental Action Program 2030 as a milestone for that process.

Our Environmental Vision 2050 includes our commitment to recycle forests and conserve energy as part of our aim to achieve net-zero carbon emissions (net zero greenhouse gas emissions) by 2050. We also declared our intention to focus on creating a society that can exist in harmony with nature by pursuing various actions designed to ensure the ongoing survival of ecosystems into the future.

Sustainability-related topics:
https://ojiholdings.disclosure.site/en/themes/142/

In the 150 years since the founding of the former Oji Paper, the Oji Group has worked hard to increase its corporate value while expanding the scope of its business operations centered around papermaking by, for instance, developing high-performing, high-value paper and pursuing resource and environment-related businesses that utilize timber resources. In other words, we have always been deeply involved in the two fields of “creating forests and utilizing forests.” We formulated our corporate purpose based on our determination to work together and continue to generate important value for the environment and society by creating forests and utilizing forests.

The purpose and mission of the Oji Group is to amply demonstrate the unique characteristics of forest-driven activities by providing a range of manufactured products that utilize renewable forest resources, promoting the absorption and fixation of CO₂ through the nurturing of forests, and helping conserve biodiversity and contributing to the future of our planet.

Purpose:
https://www.ojiholdings.co.jp/150th/en/purpose/