[Company analysis] Oji Holdings (王子ホールディングス)

「Oji Holdings (王子ホールディングス)」was founded in 1873 and established in 1949, and is the largest paper company in Japan. The company is also a subsidiary of the「Mitsui Group」, and its has「Oji Paper(王子製紙)」as their business mainstay in pulp and paper products who competes with the「Nippon Paper Group, Inc.(日本製紙)」 Currently, 60% of operating income is attributed to overseas-related businesses, and they sell not only printing paper but also various products such as cardboard and disposable diapers overseas. The number of consolidated employees is about 36,309.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Oji Paper Co., Ltd.
Company name (Japanese)	王子ホールディングス
Date of establishment	February 12, 1873
Headquarters location	〒104-0061 東京都中央区銀座4丁目7番5号
Capital	103,880
Consolidated sales	1,550,991
Consolidated operating profit	110,212
Consolidated total assets	1,951,369
Consolidated capital	815,406
Capital adequacy ratio	41.8%
Consolidated number of employees	36,309

 

 

 

2. Summary and Features

 
The predecessor of「Oji Holdings」, first「Oji Paper(王子製紙) was established in 1873, the dawn of the Japanese paper industry. this company originally founded in the Oji area of ​​Tokyo, has a market share of more than 80% in Japan, as it has expanded not only in Japan but also to the Korean Peninsula and Sakhalin and merged with「Fuji Paper(富士製紙)」and「Sakhalin Sangyo(サハリン産業)」. And it has grown as a super huge paper company. Due to its scale, it was also called "Dai Oji Paper(大王子製紙)".

However, after the end of World War II, the company was split by the conglomerate dissolution policy by GHQ. One of them was「Oji Paper」. It merged many companies who is based on Dai Oji Paper such as「Kita Nippon Paper(1970)」,「Nippon Pulp & Paper(1979)」,「Toyo Pulp(1989)」,「Kanzaki Paper(1993)」,「Honshu Paper(1996)」 and it become eventually Japan's largest comprehensive paper company.

Now, the increase in raw material prices made their profit margin of the paper industry smaller than ever. To take steps to survive, they raised the price of paper products, but this has ultimately resulted in worsening the benefits of each company in the supply chain. In the first place, the Japanese domestic market is not expected to grow any more, so paper companies necessarily had no other options to expand their business to the overseas market.

Compared with other developed countries, Japan tended to rely on paper for business activities. Nevertheless, domestic demand has been steadily decreasing due to continuous computerization. To overcome this,「Oji Paper 」 decided to focus on China and Southeast Asia. In 1996, they open a business to Thailand and in 2001 they expanded to China. In 2002, the company purchased a「P & G factory」in Suzhou, China, and in 2003 constructed a large-scale paper mill in Nantong, China. In 2010, they purchased「G5 Paper & Packaging」, Malaysia's largest corrugated cardboard company.under our umbrella.

Thanks to this aggressive overseas strategy, the percentage of overseas sales has been growing steadily. As for the number of employees, as of 2016, the number of employees overseas was greater than in Japan. Although the income level is not as high as in Japan, the disposable income of the whole country tends to increase, and the Southeast Asian paper market is expected to grow in the future.

 

 

 

3. Major Business

 

■ Industrial materials
Corrugated base paper business, corrugated cardboard processing business, white paperboard / cardboard business, packaging paper / bag making business

■ Consumer goods
Household paper business, disposable diaper business

■ Functional materials
Specialty paper business, thermal paper business, adhesive business, film business

■ Resource Environment Business
Pulp business, energy business, afforestation and wood processing business

■ Printing Information Media
Newsprint paper business, printing / publishing / information paper business

■ Other
Real estate, engineering, trading, logistics

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,439,855	1,485,895	1,550,991
Consolidated operating profit		70,781	70,243	110,212
Consolidated total assets		1,901,029	1,967,991	1,951,369
Consolidated net assets		759,198	810,011	815,406
Breakdown of sales	Consumer・Industrial materials	620,300	651,300	681,200
	Functional materials	217,600	220,800	224,100
	Resource Environment Business	270,300	298,500	326,500
	Printing Information Media	296,100	291,000	302,900
	Others	269,700	277,000	294,200
	Adjustments	-234,200	-252,700	-277,900