Jujo Paper Co., Ltd.

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Jujo Paper Co., Ltd.

Shin-Yurakucho Building
12-1 Yurakucho 1-chome
Chiyoda-ku, Tokyo 100
Japan
(03) 3211-7311
Fax: (03) 3213-6762

Public Company
Incorporated: 1949
Employees: 4,453
Sales: ¥393.51 billion (US$2.90 billion)
Stock Exchanges: Tokyo Osaka Nagoya

Jujo Paper Co., Ltd. was in 1990 Japan’s third-largest manufacturer of printing paper products. With a market share of more than 6.5%, the company produces a diversified line of paper products, including newsprint, printing paper, processed paper, carbonless copy paper, and pressure- and heat-sensitive papers. Jujo ranks as Japan’s undisputed leader in the production of processed-paper containers. Through its subsidiaries, Jujo also markets lumber, laminated wood products, soft drinks, and engineering services; it sells automobiles and is involved in real estate, ski resorts, and amusement-related enterprises. The company owns in excess of 212,000 square miles of forest land, and several shopping malls; it is also in the civil construction business.

Jujo was established in 1949 as a result of the reorganization of the Oji Paper Company. Oji Paper, which was part of the huge Mitsui zaibatsu that had for more than a century been Japan’s largest paper producer. After World War II during the ensuing Allied occupation, the Allies set up the Holding Company Liquidation Commission (HCLC). It was the intention to use the HCLC to break up the industrial zaibatsu that had held a virtual monopoly on Japanese commerce for hundreds of years. By means of this huge reorganization, a democratic, capitalistic system was expected to emerge that would be controlled by a large number of smaller groups of Japanese businessmen and entrepreneurs. Oji Paper was accordingly broken into three separate paper manufacturing concerns, Oji Paper, Honshu Paper, and Jujo.

Itsuki Nishi was elected Jujo’s first president in August of 1949. He was immediately confronted with the most serious threat to Jujo and all the other Japanese paper producers, an acute shortage of paper pulp. Pulp had primarily been imported prior to and during World War II, and the loss of forests in Manchuria, Korea, and Sakhalin as a result of Japan’s defeat threatened production. Although a short boom in domestic pulp production temporaily helped to alleviate the immediate need for pulp—Japan’s land mass was covered more than 70% by forest—it was obvious that prolonged intense deforestation of the nation’s timberlands would do irreparable long-term damage to what had to remain a renewable resource.

To put a stop to the indiscriminate logging that was underway, the Supreme Commander for the Allied Powers (SCAP) established the Council for the Conservation of Natural Resources. Jun’ichiro Kobayashi, a paper-industry veteran and forestry expert was brought in to head up the council. Kobayashi proposed the development of the Alaska Pulp Company, and SCAP gave tentative approval for the formation of the Alaska Pulp Company. After a great deal of trans-Pacific negotiation, the company was finally established in 1953, using approximatly equal amounts of investment capital provided by U.S. and Japanese investors. The Alaska Pulp venture was one of the first large postwar overseas investments made by Japanese industry and helped to revitalize U.S.-Japanese business relations.

During the remainder of the 1950s Nishi’s energies were engaged in the modernization of the company’s seven paper mills. Jujo’s leadership knew that without a major improvement in the overall quality of the company’s products and increased productivity and sales, Jujo would not be able to benefit fully from the postwar economic opportunites. In 1957 Nishi was succeeded by Saichiro Kaneko. Kaneko ushered in a decade of explosive growth and diversification.

The company’s research-and-development efforts paid off in 1962 with Jujo’s introduction of CCP, a carbonless copy paper. The success of CCP paved the way for further introduction of new specialty products that kept pace with the rapid advances in information processing. The company introduced computer paper, pressure- and heat-sensitive papers, and as the electronic transmission of information by means of fiber optics increased, Jujo introduced electrostatic paper for facsimile machines.

In 1963 the company established the Shikoku Drinks Company, later known as the Shikoku Coca-Cola Bottling Company. Shikoku is licensed by Coca-Cola Company to bottle and sell Coca-Cola and Fanta soft drinks in Japan. This diversification into the soft drink business was the beginning of a trend that would link Jujo with several other U.S. businesses. That same year Jujo, in a joint venture with the U.S.-based Kimberly-Clark Corporation established Jujo Kimberly, a company that would domestically manufacture and market Kimberly-Clark’s Kleenex and Kotex brand products. Two years later, Jujo became the sole Japanese agent for Ex-Cell-O Corporation, and began production and sales of Ex-Cell-O’s line of Pure-Pak paper drink containers.

As Jujo’s sales and products lines increased, the need for more production facilities became apparent, and facilities were built to keep up with demand. In 1967 the company merged with Tohoku Pulp Company, which resulted in Jujo becoming the largest Japanese producer and seller of both pulp and paper. An increased need for more raw materials resulted in the company’s acquisition of a 25% interest in Finlay Forest Industries of Canada in 1969.

In 1970 the company completed construction of a plant in Nakoso that mass produced CCP paper and other information- recording papers. At the company’s Ishinomaki plant, output was boosted to more than 1,000 tons per day with the installation of a new paper mill. In 1974 construction of a new paper mill in Egawa was completed. The newly constructed mill was specifically designed to manufacture products for the company’s Pure-Pak liquid container business. The increase in production capacity was not enough to meet the increased demand. Within three years the need to produce more CCP paper and Pure-Pak containers brought about Jujo’s acquisition of NCR Japan’s Oiso mill, a producer of CCP paper. The construction of another Pure-Pak mill in the city of Miki was completed in 1978.

Kozo Toyonaga was named Jujo’s new president in 1976. That same year, Jujo entered into a joint venture with the U.S.-based Weyerhaeuser Company. The newly formed company was called the North Pacific Paper Corporation and specialized in the production of newsprint. Construction of its mill in Long view, Washington, was completed in 1979. In 1990 the plant produced 210,000 tons of newsprint.

The seemingly unbridled growth that took place in the 1970s began to slow down in the early 1980s. The pulp and paper industry suffered a severe, prolonged cyclical slump. The company changed leadership in the face of these hard times. In 1982 Minoru Ishigami was named Jujo’s new president.

To cope with the severe decline in profits, Ishigami proposed a two-pronged approach to solve the problem. First, an agreement was made between Jujo and three other Japanese paper manufacturers to establish a joint venture for the purchasing of raw materials such as wood chips and pulp. The companies also agreed to pool their research-and-development projects to keep costs down and increase efficiency. The move towards consolidation was seen as an attempt to re-establish the same powerful business position in Japanese industry that the group had held when they were all components of the Oji Paper Company and part of the huge Mitsui zaibatsu. The three companies had tried to merge once before in 1968 but were unsuccessful because of Japan’s anti-monopoly laws. The agreement between the four companies, modeled in many ways after the structure of the Nippon Steel Corporation, created a huge, new industrial group in Japan’s paper and pulp industry.

The second part of Mishigama’s plan was to raise capital by selling bonds to foreign investors. During the three years following his election as president, Jujo issued over 170 million bonds, which were sold primarily for Swiss francs to investors. The plan worked. Jujo weathered the economic slump of the early 1980s and became Japan’s leader in the production of printing paper and second in the production of newsprint. Jujo emerged from the prolonged slump in apparently stable, if not better, financial condition. In 1986 the company purchased the remaining 50% of Jujo Kimberly from Kimberly-Clark, taking over complete ownership of the company.

Jujo’s sales breakdown in 1990 was 34% newsprint, 45% printing paper, 10% information-related paper products, 8% processed goods, and 3% timber and other forest-related products. Demand for heat-sensitive paper was increasing at an annual rate of 20% to 30%. With the addition of a new mill at the company’s Ishinomaki plant, Jujo has expanded its production capacity from 1,000 to 1,800 tons per month to keep up with demand. In the early 1990s the company developed a milk carton that was 40% lighter than conventional milk packaging and has also introduced new milk filling equipment for use in school lunchrooms.

Jujo’s president in 1991, Takeshiro Miyashita, was maintaining Jujo’s traditional focus on paper related products. A profile of company research and development efforts at that time broke down into paper and pulp production; processed paper and processed paper goods; and forest products that include logging, building materials, and landscaping.

Principal Subsidiaries

Jujo Paperboard Co., Ltd. (98.3%); Jujo Kimberly Co., Ltd.; Tohoku Paper Co., Ltd. (65%); Shikoku Coca-Cola Bottling Co., Ltd. (97.7%); Jujo Central Co., Ltd.; Jujo Development Co., Ltd.; Jujo Lumber Co., Ltd.