In April 2003, the Nippon Unipac Holding Group (the Nippon Paper Group) has drawn up the First Medium-Term Business Plan covering fiscal year 2003 to 2005 (April 1, 2003 to March 31, 2006).  The goals of the First Medium-Term Business Plan, based on the slogan of "higher, faster and stronger," were to achieve consolidated ordinary income of ¥100 billion or more in fiscal 2005, along with a decrease in interest-bearing debt to ¥700 billion or less, and an increase in productivity of 10% or more.    April 2003, "The First Medium-Term Business Plan" (PDF, 2.4MB)   Faster · Rationalization of production facilities and prompt realization of effects from business reorganization.   Higher · Consolidated ordinary income: over ¥100 billion.   Stronger · Consolidated interest-bearing debt: under ¥700 billion. · To raise productivity by 10% or more. Review of performance Over the past three years, we reduced surplus production capacity and improved production efficiency by rebuilding our manufacturing structure, and we achieved our numerical targets for raising productivity and reducing interest-bearing debt. These efforts helped us enhance our corporate structure and become more competitive.  Despite these accomplishments,we missed our operating income target of ¥100 billion by a wide margin.  Analysis of our performance reveals that cost reductions and lower depreciation boosted profits by ¥66.5 billion, which is more than initially expected. Highlights include a reduction in variable costs, due partly to integrating raw material procurement, a reduction in fixed costs through the elimination of various redundancies, and improvement in net financial expenses through a reduction in interest-bearing debt.  However, the business environment affecting the Group changed dramatically during this period, and new challenges have emerged. The first is higher raw material and fuel prices. Rapid economic expansion in China and other newly developing countries has contributed to rapid growth in energy demand. Consequently, prices for crude oil, coal, and other fuels have risen at unprecedented speeds, and this has had a significant negative impact on profits at the Group.  Additionally, competition with rivals both in Japan and overseas has grown more intense, and prices for printing paper and household tissue have fallen more than we expected. The decrease in product prices and the aforementioned rises in raw material and fuel prices have had a combined negative impact on profits of ¥55.1 billion.  We are extremely disappointed to achieve only half of our ordinary income target for the final year of the First Medium-Term Business Plan. ＜3-Year Summary ＞ ↑Page Top