Nippon Paper Group Inc. is now a full-scale producer of electricity, part of a strategy to revamp its business structure by making use of its own technologies and resources.
In May, Nippon Paper obtained a license to be a power producer and supplier that is allowed to sell power to large-lot users. It established an energy business department in July.
The country’s No. 2 paper company, Nippon Paper owns around 900 square kilometers of forests, the second largest in the private sector.
Backed by a new system introduced by the government that sets purchase prices for electricity produced from renewable energy, Nippon Paper plans to use those trees to generate power as well as to produce paper.
The group has biomass boiler systems that use waste liquid from wood chips during the paper-producing process at 12 plants. With biomass, coal and other types of boilers combined, the group has about 1.7 gigawatts of generating capacity. Excluding the major utilities, the figure is at the top level in Japan among power producers.
Currently, only Nippon Paper's Kushiro plant in Hokkaido sells power on a full-scale basis, with electricity sales of 18 billion yen ($227 million) in fiscal 2011.
Nippon Paper is planning to sell more electricity at other plants. It is considering building biomass power generation equipment at a plant in the Tohoku region.
The group is also putting an emphasis on producing power at its overseas subsidiaries.
Daishowa-Marubeni International Ltd., a unit in Canada, started biomass power generation in February. Nippon Paper Industries USA Co. plans to do the same from April.
At home and abroad, the group plans to increase its total annual electricity production by some 500 gigawatt-hours.
With the paper market in Japan shrinking, other paper producers are also getting into the act.
Oji Paper Co. plans to revamp its six hydroelectric power plants that supply electricity to its paper plants in Hokkaido. Its Kushiro plant in Hokkaido is expected to start selling surplus power in September.
Daio Paper Corp. has doubled the amount of power it sold to Shikoku Electric Power Co. from its mainstay Mishima plant in Ehime Prefecture.
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