Daio Paper

Basic Information

Stock Code
3880
Industry
Pulp and Paper
Category Detail
Paper & Paper Products
Prefecture
Ehime Prefecture
Establishment Year
May 1943
Listing Year
January 1979
Official Website
https://www.daio-paper.co.jp
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Oji Holdings, Nippon Paper, Hoketsu Corporation

Overview

Daio Paper is a major Japanese paper manufacturer founded in 1943, diversifying into paper and paperboard products and holding the top domestic market share in the sanitary paper market.

Current Situation

In fiscal 2022, Daio Paper recorded consolidated sales of approximately ¥612.3 billion, operating profit of ¥37.6 billion, and net profit of ¥23.7 billion. Its core paper and paperboard business centers on newsprint and corrugated board base paper, offering high-quality products and boasting the fourth-largest production volume in Japan. The sanitary paper and household goods business is a growth area, with the elleair brand enjoying high market recognition and the top domestic share. In recent years, it has expanded by acquiring the paper business of Nisshinbo Holdings and venturing into emerging overseas markets. It is also focusing on sustainability through afforestation projects and the introduction of waste recycling technologies to reduce environmental impact. The company is actively pursuing management restructuring and subsidiary integrations for efficiency. From 2023 onward, it aims to strengthen competitiveness by expanding in Southeast Asia, developing high-functionality paper products, and promoting digital transformation. It contributes to local communities and employment, with expectations for long-term enhancement of corporate value.

Trivia

Interesting Facts

  • Daio Paper holds the top share of about 15% in Japan's domestic sanitary paper market.
  • Tissue paper 'elleair' expanded to No. 1 domestic share by 1986.
  • Began Western paper production shortly after the war and pursued diversification.
  • Has a history of reconstruction after applying for corporate rehabilitation proceedings.
  • No. 2 in Japan's household paper diaper market after Unicharm.
  • Entered the pet sheet market in 2011 and expanded the elleair brand.
  • Maintains strong ties with local papermaking-related companies and group firms.
  • Its factories have been used as filming locations for video works.
  • One of the few papermaking companies that conducts afforestation alongside paper production.
  • The founding Iikawa family has stepped back from top management but retains influence in the group.

Hidden Connections

  • Deep ties with various industries as a member of the Sanwa Group and Midori-kai.
  • Significant business relationship with P&G through acquisition of the 'Attento' diaper brand.
  • Top shareholder position after equity-method affiliate relationship with Hoketsu Kishu Paper.
  • Southeast Asian market expansion centered on establishing local joint ventures.
  • Daio Paper Group's household goods closely collaborate with numerous subsidiaries.
  • The 2011 management scandal drew significant social attention and impact.
  • Daio Shipping, as a logistics subsidiary, closely collaborates with the Daio Paper Group.
  • elleair is one of the most recognized household paper brands in Japan.

Future Outlook

Growth Drivers

  • Expansion in overseas markets centered on Southeast Asia.
  • Increasing demand for caregiving products due to aging population.
  • Growing demand for sustainable products amid stricter environmental regulations.
  • Market penetration of high-functionality and specialty paper development.
  • Reutilization of paper media amid decline in digital content.
  • Growth in environmental material-related businesses such as bioethanol.
  • Productivity improvements through business efficiency and DX promotion.
  • Competitive strengthening through advanced logistics.
  • Diversification of product lineup and brand strengthening.
  • Marketing capabilities for quick response to customer needs

Strategic Goals

  • Maintain and strengthen over 20% share in the sanitary paper market.
  • Double sales revenue in Southeast Asia and emerging countries.
  • Improve environmental product sales ratio to over 30%.
  • Expand market deployment of high-function materials starting with CNF.
  • Achieve 50% reduction in CO2 emissions from own factories.
  • Promote decarbonization of supply chains.
  • Maximize management efficiency and innovation through DX utilization.
  • Introduce new diverse household products and strengthen brands.
  • Ensure sustainability of the value chain.
  • Deepen social contributions in collaboration with local communities.

Business Segments

Paper and Pulp Raw Material Supply

Overview
Stably supplies high-quality paper raw materials to the papermaking industry and related processing industries.
Competitiveness
Diverse raw material procurement network and advanced papermaking technology
Customers
  • Papermakers
  • Corrugated board manufacturers
  • Printers
  • Packaging material manufacturers
  • Logistics companies
Products
  • Newsprint base paper
  • Corrugated board base paper
  • Printing and information paper
  • Specialty paper
  • Recycled pulp from wastepaper

Household Goods OEM and Processing

Overview
Engages in OEM manufacturing and processing sales of paper products.
Competitiveness
Product strength backed by the elleair brand
Customers
  • Drugstores
  • Supermarkets
  • Wholesalers
  • Distributors
  • Foreign sanitary goods brands
Products
  • Household paper processed products
  • Paper diaper processing
  • Sanitary product manufacturing
  • Paper towels
  • Packaging materials

Environment and Engineering Business

Overview
Provides environmental technologies and energy-saving equipment to the papermaking industry.
Competitiveness
Technology specialized for the papermaking industry and extensive know-how
Customers
  • Paper mills
  • Municipalities
  • Environmental trading companies
  • Industrial waste processors
  • Biomass power generators
Products
  • Energy-saving equipment
  • Recycling systems
  • Biomass utilization devices
  • Environmental purification equipment

Logistics and Transportation Services

Overview
Achieves efficient transportation of paper products through logistics subsidiaries.
Competitiveness
Industry-specialized logistics network and know-how
Customers
  • Within Daio Paper Group
  • Paper product manufacturers
  • Retailers
  • Delivery companies
Products
  • Freight transportation
  • Warehouse management
  • Transportation management systems

Overseas Business Development Segment

Overview
Promotes overseas market development and expansion of local production.
Competitiveness
Sales network based on local subsidiaries and partnerships
Customers
  • Southeast Asian markets
  • Local distributors
  • Local papermaking and paper processing companies
Products
  • Paper diapers
  • Sanitary paper
  • Household goods

Competitive Advantage

Strengths

  • Top domestic share in sanitary paper
  • Diversified business operations
  • Strong brand power (elleair)
  • Diverse product lineup
  • R&D and capital investment capabilities
  • Extensive logistics and sales network
  • Advanced environmental response technologies
  • Growth strategy in global markets
  • Profitability improvement through management restructuring
  • Abundant subsidiaries and consolidated structure

Competitive Advantages

  • High market recognition and trust in the elleair brand
  • Aggressive expansion in overseas markets such as Southeast Asia
  • High-quality newsprint and printing paper production capabilities
  • Afforestation and recycling initiatives with environmental consideration
  • Business diversification across consumer and industrial goods
  • Technological innovation through long-term R&D
  • Product portfolio catering to diverse customer segments
  • Stable supply chain management
  • Management efficiency through restructuring and integration
  • Corporate stance on sustainable society contributions

Threats

  • Declining demand trend in the papermaking industry
  • Raw material price fluctuation risks
  • Strengthening environmental regulations and sustainability pressures
  • Intensifying competition in overseas markets
  • Domestic market shrinkage due to population decline
  • Competitors' technological innovations and price competition
  • Profit impacts from exchange rate fluctuations
  • Risk of loss of social trust
  • Geopolitical risks in supply chains
  • Declining demand due to spread of alternative materials

Innovations

2023: Development of bioethanol production technology

Overview
Developed technology to produce bioethanol from wood and supplied samples to petrochemical manufacturers.
Impact
Creates new entry opportunities in the environmentally friendly fuel market

2022: Cellulose nanofiber (CNF) pilot plant starts operation

Overview
Started operation of demonstration facility to establish manufacturing technology for next-generation high-function materials.
Impact
Contributes to new material development and product differentiation

2021: Acquisition of Nisshinbo Holdings' paper business

Overview
Achieved product line expansion and synergy creation by making the paper products business a subsidiary.
Impact
Strengthens business foundation and increases market share

2020: Integration of logistics subsidiaries to reduce environmental impact

Overview
Consolidated group logistics subsidiaries to build an efficient logistics system.
Impact
Reduces logistics costs and CO2 emissions

Sustainability

  • Sustainable use of forest resources through afforestation projects
  • Strengthening decarbonization and energy-saving measures in papermaking processes
  • Promoting waste circular utilization and recycling technology development
  • Expanding introduction of environmentally friendly products
  • Compliance with environmental standards at overseas factories and local contribution activities
  • Strengthening traceability in supply chains
  • Regional deployment of environmental education and awareness activities
  • Efficient use and conservation activities for water resources
  • Promoting certification acquisition for sustainable raw material procurement
  • Advancing ESG management through social contribution activities