Nippon Paper Group Inc. will cut 1,300 jobs from its paper division, a 15-percent reduction in the division's workforce, while slashing production capacity by the same figure, the company said Aug. 3.
Nippon Paper produces paper for copy machines and printing paper used for fliers, magazines and other publication materials.
The move reflects shrinking demand for paper amid the changeover to digitalization, in addition to significant damage caused to the company's main plants by the Great East Japan Earthquake.
The March 11 tsunami inundated the Ishinomaki plant with mud and debris. Nearly all the paper stock was damaged.
Nippon Paper Group has 8,800 employees. It will ax 850 jobs from regular employees and 450 from non-regular workers by soliciting voluntary early retirement and implementing other measures starting next spring. Of the figure, 100 jobs will be cut from the management division at the head office.
Production will be partially suspended at the company's five domestic plants--Ishinomaki plant (Miyagi Prefecture), Iwanuma plant (Miyagi Prefecture), Fuji plant (Shizuoka Prefecture), Yoshinaga plant (Shizuoka Prefecture) and Iwakuni plant (Yamaguchi Prefecture)--leading to a production reduction of 800,000 tons of paper by September 2012.
The paper manufacturing industry has faced declining demand with the rise in digital media as companies cut advertising expenses.
In light of severe damage to the group's main plant, Ishinomaki, Nippon Paper Group will review and may realign its manufacturing operations. The company also said it will incease its stake in the second-largest Chinese cardboard maker to make it a group company.
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