50202220232024(Forecast)16.117.015.3201510202134Value Creation StrategyBusiness Strategyticization and reduce food loss• Develop and market new products• Roll out new applications by strengthening competitiveness of existing products• Expand sales of special function paper to overseas markets14.4Net Sales: Fine & Specialty Paper Products OperationsLSV 2030-Stage 1¥ BillionBusiness Operations IntroductionWe have the leading share in the domestic market for color paper for envelopes and colored construction paper. We also manufac-ture and sell special function paper, such as dust-free paper for use in places such as clean rooms, and oil- and water-resistant paper used in food packaging, as well as high-grade printing paper with special textures and construction material paper used as lining for wallpaper. The Company is also stepping up the development and proposal of products that meet growing needs in recent years for plastic alternatives.Main Initiatives in Medium-term Business Plan LSV 2030-Stage 1• Develop and expand sales of new products that promote deplas-(Fiscal years ended / ending March 31)A Message from the Executive General Manager, Fine & Specialty Paper Products OperationsIn the fiscal year ended March 31, 2023, sales of our main product, color paper for envelopes, were comparable with the previous year’s level despite sluggish market condi-tions, thanks in part to the effect of sales price revisions. However, sales of industrial specialty paper, such as dust-free paper, declined due to a downturn in semicon-ductor demand. On the other hand, colored construction paper performed well thanks to the resumption of school events, while oil- and water-resistant paper benefited from increased demand for use in fast-food restaurants and other takeout services. Overall, sales rose, but our profits were affected significantly by the rise in pulp prices, making this a challenging year. business. While seeking customer understanding, we will proceed with sales price revisions for our products. We will also scale our production system to match current production levels and reduce inventories through standardization and by discontinuing some products. To continue growing despite the market trend away from paper usage, we will need to expand our lineup of environmentally friendly products. We will focus on developing and increasing sales of packaging materials that can serve as substitutes for plastics, such as thick oil- and water-resistant paper that can be used as containers for convenience store lunches, and translucent paper that can replace clear plastic folders. In this same vein, we will also prioritize the development and promotion of biodegradable heat-sealing paper and other high-performance paper.Improving profitability is an urgent challenge for this Fine & Specialty Paper Products OperationsSatoshi AokiExecutive OfficerExecutive General Manager, Fine & Specialty Paper Products Operations, Business Administration Div.Paper and Converted Products
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