WCO General Session JAPAN Rengo Co., Ltd. May 23, 2011 / Montreal
3.11 the Great East Japan Earthquake -- earthquake, tsunami and Fukushima Nuclear Accident 1
3.11 the Great East Japan Earthquake Latitude 38.1 north Longitude 142.9 east Depth at sea 24 km Distance from coast 130 km 2
14:46, March 11, 2011 North American Plate Eurasian Plate M 9.0 Pacific Plate Philippine Sea Plate Source: Japan Meteorological Agency 3
Tsunami Tsunamis Observed off the Pacific Coast, Great East Japan Earthquake 2011 Source: Japan Meteorological Agency 4
No. of Daily Aftershocks Accumulated number Aftershocks Frequency of Aftershocks (Magnitude >= 5.0) Number of Daily Aftershocks (excluding main shock) Source: Japan Meteorological Agency 5
Paper and Paperboard Mills that Suffered Extensive Damage Mitsubishi-Hachinohe Kitakami Nippon-Ishinomaki Nippon-Iwanuma Marusan Iwaki Daio Hokuetsu Kishu-Katsuta Annual production in 2010 (1,000 tons) Liner Medium CB Total Boxboard Newsprint Pr/Wr Paper Other Production 5,183 3,464 8,647 1,517 3,349 9,547 4,303 27,363 Mitsubishi-Hachinohe 47 712 759 Kitakami 83 83 10 3 15 111 Nippon-Ishinomaki 11 954 965 Nippon-Iwanuma 454 111 565 Marusan 78 165 243 243 Iwaki Daio 284 28 312 98 7 417 Hokuetsu Kishu-Katsuta 109 4 2 115 Total 445 193 638 156 573 1,791 17 3,175 Share 8.6% 5.6% 7.4% 10.3% 17.1% 18.8% 0.4% 11.6% Total Source: JPA 6
Paper and Paperboard Mills that Suffered Extensive Damage Mitsubishi-Hachinohe Mitsubishi Hachinohe Mill Some PMs to resume operations May 25. Full operations of the mill expected after October. Kitakami Paper Resumed operations April 9. Nippon Paper Iwanuma Mill NP PM resumed April 11 Other NP PM resumed April 24 Remaining PMs to resume before end of May. Iwaki Daio Paper NP PM and CB PM resumed operations March 24-25. * Stopped again due to aftershocks. Resumed again April 25. Kitakami Nippon-Ishinomaki Nippon-Iwanuma Marusan Iwaki Daio Hokuetsu Kishu-Katsuta Nippon Paper Ishinomaki Mill Plans set for restoration following assessment of damages. Rengo Marusan Paper Operation suspended until end of June. Hokuetsu Kishu Paper Katsuta Mill Resumed operations March 31. 7
Corrugated Plants in Tohoku Region Corrugated board production by region in 2010 24 Corrugated Plants 6.4% Tohoku Region Oji Sendai Plant No plan for restoration Source: METI Rengo Sendai Plant To construct new plant at other site Tomoku Sendai Plant Operation resumed April 25. 8
Fukushima Nuclear Accident Estimated Radiation Dose at Fukushima Daiichi NPS* Radiation Dose at Chernobyl Iodine 131 (a) 1.5 x 10^17 Bq 1.8 x 10^18Bq Cesium 137 1.2 x 10^16Bq 8.5 x 10^16Bq Source: METI (Iodine equivalent value) (b) 4.8 x 10^17Bq 3.4 x 10^18Bq (a) + (b) 6.3 x 10^17Bq 5.2 x 10^18Bq * Announced by the Nuclear Safety Commission of Japan 9
Baseless Rumor Maxinum Radiation Dose (Unit: micro SV per hour) Observed from 5:00 pm, May 9 to 5:00 pm, May 10 Observation site Normal level Sapporo Sapporo-shi 0.033 0.020 ~ 0.105 Sendai-shi 0.087 0.017 ~ 0.051 Akita-shi 0.054 0.022 ~ 0.086 Yamagata-shi 0.054 0.025 ~ 0.082 Akita Fukushima-shi 1.700 0.037 ~ 0.046 Mito-shi 0.104 0.036 ~ 0.056 Yamagata Utsunomiya-shi 0.065 0.030 ~ 0.067 Maebashi-shi 0.037 0.017 ~ 0.049 Osaka Maebashi Saitama-shi 0.058 0.031 ~ 0.060 Ichihara-shi, Chiba 0.048 0.022 ~ 0.044 Dazaifu Shinjuku-ku, Tokyo 0.067 0.028 ~ 0.079 Chigasaki-shi, Kanagawa 0.057 0.035 ~ 0.069 Shinjuku Nagoya-shi 0.044 0.035 ~ 0.074 Nagoya Osaka-shi 0.043 0.042 ~ 0.061 Dazaifu-shi, Fukuoka 0.039 0.034 ~ 0.079 Chigasaki <Nihon Keizai Shimbun> Sendai Fukushima Utsunomiya Mito Saitama Ichikawa 10
Radiation Exposure Note: Radiation units Sievert (Sv) The sievert is a unit used to measure the degree of impact on a human body exposed to radiation. As an example, the maximum radiation exposure during a round trip s. One thousand micro -sieverts is called a millisievert. Becquerel (Bq) This unit expresses radiation strength. In ordinary usage, it indicates the amount of radiation. Source: Ministry of Education, Culture, Sports, Science & Technology in Japan Gray (Gy) A Gray is a unit that indicates the amount of radiation energy absorbed by a substance when exposed to radiation. One Gray equals the absorption of one joule of energy per kilogram of material. 11
Evacuation Emergency Preparedness Evacuation Area Temporary Evacuation Area Exclusion Zone Fukushima Daiichi Emergency Preparedness Evacuation Area Fukushima Daini Tokyo Narita Osaka Source: METI 12
Impact on Japanese Economy Closing Price of the Nikkei Stock Average Closing Exchange Rate to the Dollar March 17 = JPY78.13/USD 13
1Q/2008 2Q 3Q 4Q 1Q/2009 2Q 3Q 4Q 1Q/2010 2Q 3Q 4Q 1Q/2011 2Q 3Q 4Q 1Q/2012 2Q 3Q 4Q 4.0 3.0 2.0 1.0 0.0-1.0-2.0-3.0-4.0-5.0-6.0-7.0 Japan Real GDP Growth Rate (%) 0.2 0.3 1.4 2.7 Japan Overall Economy 3.9 2.4 1.9 2.0 1.4 2.1-1.2-6.3 Forecasted by IMF (April, 2011) 1.7 1.5 1.3 1.2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0 Changes from the previous quarter, seasonally adjusted (%) Forecast * 2.6 1.8 1.5 0.8 1.2 0.3 0.5 0.4 1.0 0.0 0.6 0.5 0.4-0.8-0.5-0.3-1.3-0.7-2.9-5.4 Source: Cabinet Office * Average as forecast by 12 Japanese think tanks, April 2011 14
Thank you for your attention! May 23, 2011 Rengo Co., Ltd. 15
Containerboard and Corrugated Industry in Japan Rengo Co., Ltd. May 23, 2011 / Montreal 16
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* Japan Corrugated Production and Real GDP Growth (Bil. m2 ) 5.6 20 18 16 14 12 10 8 6 4 2 0 4.2 0.4 Production Production growth Real GDP growth 3.3 2.6 3.2 2.4 2.6 1.6 0.8 0.5 1.9 1.1 0.9 0.2-1.0-3.6 2.9 1.6-0.1-2.0 3.9 2.7 1.8 1.9 2.0 2.4 1.4 3.5 1.4 0.2 0.3-1.2 1.2 1.0 1.0 1.3 0.5 0.7 0.1-1.1-2.9-6.3-6.9 (%) 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0-10.0-12.0 Source: METI, Cabinet Office *Corrugated production and growth rate: JCCA forecast (Dec., 2010) Real GDP growth rate: IMF, April 2011 17
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* JAPAN Containerboard Production 10,500 Containerboard Production Annual Growth 10.0% 9,500 5.0% 8,500 0.0% 7,500-5.0% 6,500-10.0% 5,500-15.0% 4,500-20.0% Operating Rate 92 91 93 87 90 92 90 90 90 92 91 90 90 87 80 85 Operating Rate = Annual Production Daily Production Capacity x 332days (333days for leap year) *January March Source: METI, Japan Paper Association 18
Japan Containerboard International Trade (1,000 t) 160 140 120 100 76 80 82 106 Import 130 126 147 124 98 134 134 (1,000 t) 300 278 250 221 200 150 Export 119 111 99 107 96 103 60 40 20 28 100 50 70 27 23 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* Liner 68 65 88 111 107 111 96 80 67 87 21 Medium 8 17 18 19 19 36 28 18 67 47 7 Liner 79 97 55 50 37 46 50 48 25 55 20 Medium 199 123 64 61 63 61 46 55 3 15 3 *January March Source: Trade Statistics 19
Japan Utilization rate and Recovery rate 100 80 60 40 20 (%) Utilization Rate 91.1 92.3 92.4 92.6 92.7 92.4 92.8 92.8 92.8 90.3 Paperboard Target in 2015; 64% 63.1 60.6 61.4 61.9 62.5 59.6 60.2 60.4 60.3 58.0 Paper and Paperboard 37.2 38.1 36.2 36.5 37.5 33.8 Paper 42.1 40.1 40.5 40.5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Recovery and Recovery rate (1,000t) (%) 30,000 79.7 78.3 68.5 71.1 72.4 74.5 75.1 80 25,000 65.4 66.1 61.5 60 20,000 22,752 21,715 15,000 23,325 21,664 40 22,825 10,000 22,320 21,507 20 20,443 5,000 Recovered volume 20,046 19,122 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Paper Recycling Promotion Center 20
Japan OCC Consumption, Recovery, Net-export (1,000 t) 12,000 10,000 8,000 6,000 4,000 2,000 8,103 0-2,000 83.2 86.6 8,396 7,988-43 8,559 8,122 397 91.9 8,980 8,277 94.2 9,251 733 788 8,349 97.3 9,622 8,400 1,077 100.8 102.0 103.0 10,017 8,452 10,178 8,595 10,321 8,479 1,558 1,616 1,621 103.7 10,171 7,341 1,561 110.8 109.0 9,791 2,420 7,903 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10,102 2,184 (%) 120 100 80 60 40 20 0-20 OCC Consumption OCC Recovery OCC Net Exports OCC Recovery Rate Source: METI, Trade Statistics, Paper Recycling Promotion Center 21
Japan Recovered Paper Export 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 4,914 4,374 3,710 3,887 3,844 3,491 2,835 1,897 1,971 1,466 1,110 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* OCC 570 849 886 1,144 1,623 1,671 1,664 1,599 2,451 2,214 525 ONP+OMP 661 733 ONP 365 620 655 641 398 339 588 441 144 OMP 423 653 850 902 1,045 931 1,125 1,058 271 High grades 13 18 19 50 97 134 141 117 126 109 35 Others 221 298 278 368 486 539 595 506 624 552 135 *January March Source: Trade Statistics 22
Japan OCC Export China has 73% share (1,000 t) 2,500 2,451 2,214 2,000 1,623 1,671 1,664 1,599 1,500 1,144 1,000 500 570 849 886 525 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* China 102 253 244 634 1,310 1,249 1,221 1,251 1,968 1,623 381 Thailand 300 301 417 301 141 255 245 205 319 394 93 Taiwan 119 207 172 158 127 113 135 72 97 103 32 S.Korea 12 18 12 19 23 9 17 45 3 16 4 Others 37 70 40 32 22 44 46 26 64 79 15 *January - March Source: Trade Statistics 23
Japan Summary 2011 Forecast (Japan) Real GDP Growth +1.4% Rate Corrugated Production +1.0% Containerboard Domestic Demand Containerboard International Trade OCC Recovery OCC Export +0.8% up and down no big change decrease 24
May 23, 2011 Rengo Co., Ltd. 25