Nippon Paper to end production at quake-hit plant in Kumamoto

Nippon Paper Industries said Friday it will cease production of graphic paper and pulp at a plant damaged by a massive earthquake in Kumamoto Prefecture in late July.

The company made the decision after concluding that repairing or replacing production equipment at the mill in Yatsushiro, Kumamoto Prefecture, would take three to four years and significant costs. It will explore new business opportunities at the site.

Nippon Paper expects to book about ¥20 billion ($126.4 million) in losses related to the earthquake in the year ending in March 2027, including ¥15.1 billion for the first half.

Including other disaster-related losses, the company expects to swing to a consolidated net loss of ¥40 billion in the year, compared with a profit of ¥11.7 billion the previous year.

Nippon Paper will transfer production of newsprint and other items at the Yatsushiro plant to its other mills in Japan and outsource production of some products to other companies.

In a statement, the company said that it will “make every effort to secure continued employment” for employees at the Yatsushiro plant through measures including reassignment within its group.