Strengths of the Daio Group

The Mishima Mill, one of the world’s largest coastal paper mills, is the principal source of Daio Group’scompetitiveness. The mill supports the Group’s sustainable growth through various measures, includingestablishing a resilient production system that can respond to changes in the demand structure and reducing the environmental impact of its operation. In addition, the Group strives to increase its brand power, sales capabilities, and corporate value based on its marketing-oriented sales policy represented as “What is made by Daio is sold only by Daio sales representatives.”

Competitive Advantage 1

Product Value Chain

①Integrated production, beginningwith raw material production
②Coastal location and one of Japan’s largest pulping facilities
③Flexible production system that can meet changing demand

We have built a product value chain capable of efficient production to provide a timely response to changes in paper demand to achieve sustainable growth. The Mishima Mill, our core paper mill, is one of the world’s largest coastal paper mills and engages in the integrated production of paper and paperboard with in-house produced pulp. Its annual production output is approximately 2.0 million tons, which accounts for about 9% of Japan’s total annual paper and paperboard production. The Mishima Mill has one of Japan’s largest pulping facilities, which is connected through a network of pipes to 17 paper machines and feeds the appropriate types of pulp to each machine according to the quality of paper to be produced. This system enables us to flexibly switch between different product types to always meet changing market demand.

Competitive Advantage 2

Environmentally Conscious Company

①Sustainable forest management(tree planting)
②Sustainable resource recycling(advanced use of recovered paper)
③Sustainable and effective use of resources (reuse of waste)

Since the establishment of Daio Paper Corporation, we have been engaged in environmental conservation through various initiatives, including utilizing a high percentage of recovered paper, lowering energy consumption, and recycling industrial water. We own 590 km2 of forested land—roughly the same area as Tokyo’s 23 special wards—in Chile, South America, and are practicing sustainable forest management there. About half of this, 280 km2 of land, is preserved as natural forest to conserve biodiversity.In addition, we now use a higher percentage of recovered paper than the average in the industry as a result of our efforts to increase our use of hard-to-recycle recovered paper, which were previously disposed of as waste.We also aim to achieve zero emissions by dividing hard-to-recycle recovered paper into material (pulp) and fuel (such as plastic film mixed in with recovered paper) and utilize both. Through such approaches, we are actively committed to environmental conservation.

Competitive Advantage 3

Market-driven Business Strategy

①Speedy decision-making and great implementation ability
②Integrated operations (Integration between product development, production and sales;integration between paper and printing,containerboard and corrugated container converting; integration between the Paper and Paperboard Business and the H&PC Business)
③Style of sales activities closest to customers: “What is made by Daio is sold only by Daio sales representatives”

As a manufacturer that aspires to know its customers best, we have devoted efforts to expanding our sales networks and training our sales representatives based on our basic stance: “What is made by Daio is sold only by Daio sales representatives.”Every sales representative detects market trends through their day-to-day marketing activities with customers to facilitate product development and proposals that can promptly meet customer needs. In our operations not only in Japan but also in the rest of the world, we have broadened our lineup of high-performance and high-quality products so that they will fit into the local culture and customs of each country/region. We have thus raised the satisfaction levels of local consumers.

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