Nippon Paper Announces End of Paper and Pulp Operations at Yatsushiro Plant Damaged by Kumamoto Earthquake

Key points

On November 6, 2026, Nippon Paper announced it will abandon plans to resume production of newsprint, copy paper, and pulp at its Yatsushiro plant in Yatsushiro City, Kumamoto Prefecture, which suffered extensive damage from the Kumamoto earthquake. Due to significant damage to equipment and buildings making restoration difficult, the company will end its paper and pulp operations there. While maintaining the plant itself, Nippon Paper will explore new business opportunities. Approximately 400 employees will be reassigned to other plants to maintain employment within the group. The consolidated net loss for the fiscal year ending March 2027 is expected to reach 40 billion yen. [1] [2] [3]

Decision to End Paper and Pulp Operations at Yatsushiro Plant

On November 6, 2026, Nippon Paper announced it will cease production of newsprint, copy paper, and pulp at its Yatsushiro plant in Kumamoto Prefecture, which was damaged by the Kumamoto earthquake. The company judged that the extensive damage to equipment and buildings would require significant time and cost to repair, making restoration difficult. Construction work on the household paper business was also halted, and the company plans to reconsider the business viability. While maintaining the plant itself, Nippon Paper will seek new business possibilities. Approximately 400 employees will be transferred to other plants or reassigned within the group to secure employment. [1] [4]

This decision was based on damage assessments conducted after the July Kumamoto earthquake, which confirmed widespread severe damage throughout the plant. At a press conference, Nippon Paper President Akira Sebe stated that restoring the plant to its original condition would be extremely difficult and described the decision to end paper and pulp operations as a heavy one. He also revealed that the household paper business would undergo a review of construction schedules and business viability within the current fiscal year. Going forward, the company plans to explore new business developments, including wood resource supply chains and the use of domestic timber, in collaboration with partners. [4] [2]

History of Yatsushiro Plant and Employment Measures for Workers

Established in 1924, the Yatsushiro plant was Nippon Paper's only facility in Kyushu and the sole site producing newsprint in the region. With over 100 years of history, the plant was an important presence locally but had suspended operations due to earthquake damage. Before the disaster, the company had been gradually phasing out newsprint and copy paper production, planning to shift to household products such as toilet paper starting in 2028. Construction of new production lines was underway but has now been halted pending a review of the plans. [1] [4]

Regarding the approximately 400 employees, Nippon Paper intends to secure employment within the group through transfers and reassignment to other plants. The company will confirm employee preferences and proceed with appropriate placements, focusing on maintaining employment despite the plant's business closure. While maintaining the plant itself, Nippon Paper will explore new business opportunities to continue its relationship with the local community. Efforts are ongoing to minimize the impact on the regional economy. [1] [4]

Impact on Business Performance and Comments from Management

Nippon Paper revised its consolidated net income forecast for the fiscal year ending March 2027 to a loss of 40 billion yen. This includes a special loss of 15.1 billion yen related to damage at the Yatsushiro plant caused by the Kumamoto earthquake, as well as approximately 11 billion yen in disaster losses related to an accident at the ND P plant. In the previous fiscal year, the company posted a net profit of 11.7 billion yen, so these losses represent a significant impact on management. Sales are projected at 1.22 trillion yen, with an operating loss of 5 billion yen and an ordinary loss of 13 billion yen. Insurance proceeds of about 3 billion yen are expected to be recorded as special income. [1] [3]

Nippon Paper President Akira Sebe described the decision to end paper and pulp operations at the Yatsushiro plant, which has over 100 years of history, as extremely weighty. He emphasized that this was a difficult choice for the company and that it takes its responsibilities to the local community and employees seriously. The company intends to pursue new business developments and maintain coexistence with the region. Although the business outlook remains challenging, Nippon Paper aims to achieve sustainable management. [2]