ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Consumer

Japanese paper makers ply luxury toilet tissue in China

Oji and Daio hope to replicate success of high-end diapers

Japanese toilets are seen on display at a showroom in Tokyo. Chinese consumers like high-end Japanese toilets. Will they also go for luxury toilet paper?   © Reuters

TOKYO -- Japanese paper makers Oji Holdings and Daio Paper are increasing production of toilet and tissue paper to tap growing Chinese demand, targeting a well-to-do clientele to avoid head-on competition with local players.

The two manufacturers established their brands in China by focusing on high-quality baby diapers. With domestic demand shrinking, they now hope to replicate that success with other luxury household products like three-ply toilet paper.

Oji will install facilities at a plant in Jiangsu Province with plans to produce raw material for toilet and tissue paper in July next year. Annual capacity is expected at 120,000 tons, more than six times the capacity of a Japanese facility the company launched in the spring with Mitsubishi Paper Mills. The bulk of the output will be supplied to local companies that process the material into finished products. 

Oji currently produces and sells intermediary pulp and printing paper in China. This marks the first time the company will manufacture raw material for household paper products.

Daio will pour 20 billion yen ($184 million) into paper mills in Ehime and Gifu prefectures by 2021 to increase capacity for household products by 10%. The goal is to expand exports to China. Raw material for tissue and toilet paper produced at the Ehime plant will be processed into finish products in China.

Daio uses Japanese writing on packages sold in China to appeal to consumers who are fond of high-quality Japanese products. A package of 10-rolls of its toilet paper costs around 900 yen, roughly twice the prices of local varieties. 

It intends to have 3,000 retailers selling its products by the end of the current fiscal year ending in March, up from 1,600 stores in May this year. 

Both companies are betting that they can repeat their successes in diapers with toilet paper, "an area where there are no high-end varieties" in the words of an Daio official.

Daio expects China's market for household paper products to grow at an annual 10% for the foreseeable future. 

"Just the wealthy class that regularly buys high-end products is as big as Japan's entire population," said a Daio official. 

In the meantime, the prospects for the Japanese domestic market is bleak due to the declining population. Domestic demand for paper, including printing and household products, declined roughly 20% over the past 10 years. 

Oji has invested aggressively in pulp and containerboard businesses, boosting overseas sales to more than 30% of the total. Daio also aims to raise the percentage of overseas sales in the home and personal care segment, which includes facial and toilet tissue, to nearly 30% from the current 20%, with the aim of boosting overall segment sales to 250 billion yen in fiscal 2020. 

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media