Merging with Honshu Paper and reclaiming the name “Oji Paper” after 47 years (1996)

What began in the year the name came back

The terms of this merger fell into place the moment Honshu Paper decided to spend $805.4M (¥88bn) buying back its Kushiro mill. Since chairman Yonezawa Yoshinobu had said there could be no merger until Kushiro was returned, all Oji could do was wait for the other side’s circumstances to change. That the $67.5M (¥8bn) loss exposed in the 1993 Kanzaki merger had sapped the strength of the ex-Kanzaki camp, unifying internal decision-making early, was another condition that let the company concentrate on the next negotiation. Ohkuni Masahiko’s ability to reach an announcement nine months after taking office appears to rest on those two things coming together.

Yet the scale recovered over 47 years did not translate straight into earnings. Three and a half years after the merger, the Nippon Paper–Daishowa integration took first place away, and in 2001 Oji turned outward with a plan for three million tonnes a year in Asia. It was also visible at the time that a combination as lightly overlapping as fine paper and paperboard would not act as a stabilizing force in the market. Undoing the postwar split was, for Oji, both a destination and the terminus of a strategy of pursuing scale inside Japan.