Company history

The Nakai family had run a pawnshop in Kyoto since 1696 and served the Mitsui Echigoya drapery for generations. Nakai Sanpei, born in 1821, entered Echigoya at thirteen and left at twenty-two with the Mitsui family’s consent — an exception to a house code that almost never allowed outsiders to take the crest, granted because of long service and because paper did not compete with cloth. After three years’ apprenticeship with an Osaka paper merchant he opened Koshisan, a shop dealing solely in washi, in Kyoto in 1845 with capital of 100 ryo. His stated creed was that a business must make money but that excessive profit ruins a house; steady margins earned by diligence were the point, which is why he chose paper over anything speculative.

Western paper came in through the government. In January 1876 the governor of Kyoto, looking for merchants to open a market for the prefecture’s Western-style paper mill, appointed five paper dealers — the fourth-generation Nakai Saburobei among them — as official sales agents, with rank and a monthly allowance. The five were each given a quantity of stock to make up as they saw fit and put to auction among the paper trade; Saburobei’s sliding-door paper was judged the best of them. The shop took the name Nakai Shoten that year. For a decade the paper did not sell and the stock piled up, until the Ministry of Finance began ordering land-certificate paper in volume from every mill in the country. A contract to sell Oji Paper’s output followed in 1882, putting Nakai at the distribution end of Japan’s modern paper industry from its beginning.

Incorporation came out of a foreign trip and a near-bankruptcy: a son sent to Europe in 1900 returned arguing for a corporate form, and the post-war slump left the shop so short of funds that it was rescued by Dai-Ichi Bank. A partnership was formed in Tokyo in 1902 and a joint-stock company in 1916. Wartime control then took the wholesale licence away in 1944 — for a trading house, close to a suspension of business — and returned it in 1946. The zaibatsu dissolution severed the capital tie but not the trade: Oji held 64% of Nakai’s paid-in capital, and in March 1947 those shares went to the holding-company liquidation commission, while Oji successfully argued down GHQ’s claim that investment in distributors was double investment, on the ground that the split between making and selling had existed since Meiji. Oji then sent Shioyama Toyozo in as executive director to rebuild its leading distributor; by 1963, when “Shoten” was dropped from the name, Nakai was a specialist paper trading house of some 600 people.

The merger was set off by a failure upstream. In 1968 the three successors to the old Oji — Oji, Jujo and Honshu — signed a memorandum to recombine, and withdrew the application that September when the Fair Trade Commission balked at shares of 60% in newsprint and 80% in gravure paper. Consolidation was blocked in production; it was not blocked in distribution. Seven Oji-affiliated distributors jointly submitted their view on modernising the trade the following month, and with capital liberalisation approaching, the argument that distributors needed the balance sheets to survive competition pushed two of them together.

Nakai and Fuji Yoshiten signed a merger agreement in October 1969 at a ratio of one to one. The sizes were not equal — Nakai had capital of ¥1.5 billion, 750 staff and half-year sales of ¥40.6 billion against Fuji’s ¥200 million, 410 staff and ¥17.4 billion — and the last thing settled was the name. Fuji’s president, Hirose Shukuji, conceded that Nakai was the larger and stronger but argued that dwelling on which was superior would produce nothing after the merger, and asked for a name that kept neither. On 1 January 1970 the 125-year-old Nakai name and the 85-year-old Fuji name both disappeared and Japan Pulp & Paper was founded: capital of ¥1.7 billion, 1,128 employees, and combined annual sales of $458.3M (¥165bn) — first in the industry on every measure, and the first paper distributor past ¥100 billion.

Listing followed in 1972, and from 1973 wholly owned offices opened in Düsseldorf, Hong Kong and the United States. These were import-export windows rather than local businesses — a later president would describe the overseas bases before 2010 as branch offices of Japan. What did take root at home were functions around the wholesale trade: a wastepaper recycling company in 1973, an office building that became the property arm in 1975, then information systems, warehousing and household supplies. By 1998, when a business weekly profiled the paper trade’s restructuring, it called Japan Pulp & Paper the largest paper distributor in the country, with sales of ¥455.2 billion and main-agent status for both Oji and Nippon Paper. That year the wastepaper business went abroad for the first time, with a US recycling company.

In August 2003 the company took over Tomen’s pulp and paper business — a general trading house shedding a non-core operation into the hands of a specialist. Revenue climbed past ¥450 billion, though a net loss of ¥3.9 billion in the year to March 2005 showed that scale did not translate into profit. How much the distributor mattered was demonstrated in 2005, when a merger between Mitsubishi Paper Mills and Chuetsu Pulp collapsed just short of agreement: Chuetsu wanted Mitsubishi’s sales subsidiary folded into Japan Pulp & Paper, and Mitsubishi resisted on the ground that it would dilute the point of a “third force.” Oji was the largest shareholder in both companies. Where a distributor belonged could stop a manufacturers’ merger.

Then the domestic market turned. Paper and paperboard demand had risen more or less continuously until the financial crisis, after which population decline and digitisation made the contraction structural; revenue fell from ¥475.8 billion in the year to March 2009 to ¥417.6 billion a year later and then stalled around ¥500 billion. The response was to build earnings that did not depend on paper volumes: a biomass power company in 2004, a recycling business in Kyushu in 2007, a paper mill acquired in 2009, the recycled-tissue maker Corelex in 2011, solar generation from 2013. Collect the wastepaper, make recycled paper from it, burn what is left and sell the electricity.

The other answer was to stop being a window. In April 2010 the US subsidiary took 51% of Gould Paper, a large American paper merchant, going to 100% in 2015 — for the first time a business that bought and sold locally rather than shipping from Japan. An Indian distributor followed in 2012. Yet as late as the year to March 2016 the shape was still domestic: ¥298.3 billion of wholesale revenue at home against ¥156.7 billion abroad, with the whole of the diversification — paper manufacturing, resources and environment, property — under a tenth of the wholesale business. Group revenue was ¥506.6 billion and ordinary profit ¥6.9 billion.

2017 was the year of acquisitions: a major wastepaper trader in April, and in July the Ball & Doggett group, the leading paper wholesaler in Australasia, for a reported figure just under $62.4M (¥7bn). Singaporean and Malaysian distributors followed in 2018 and a large British wholesaler in 2019. In October 2017 the group adopted a single brand, OVOL, and renamed the acquired companies into it — OVOL Singapore, OVOL Malaysia and the rest — so that subsidiaries with no claim on the Japanese corporate name shared one identity. New buildings in Tokyo and Kyoto took the brand too.

In May 2021 the company set out a long-term vision to 2030, Paper, and beyond, and a three-year plan targeting ¥15 billion of ordinary profit. President Watanabe Akihiko explained that “the world’s strongest paper distribution group” meant not the largest by revenue but the strongest through a glocal strategy: leave each acquired company to local management, and use the group’s combined scale in purchasing — routing paper handled by the British subsidiary to Australia and New Zealand, for instance. It worked for a time. Ordinary profit reached ¥15.1 billion in the year to March 2022, above the previous plan’s best of ¥10.8 billion, and ¥21.2 billion in the year to March 2023.

The map kept widening. In November 2024 the group entered continental Europe, setting up German companies to take over the local operations of Inapa — a business with ¥89.1 billion of recent revenue — and consolidating Inapa France for $28.9M (¥4bn), joining Britain, Germany and France into one network. Revenue hit a record ¥606.8 billion in the year to March 2026, and the ratio finally inverted: ¥338.1 billion overseas against ¥193.1 billion at home, against ¥156.7 billion and ¥298.3 billion a decade earlier. Profit did not follow — ordinary profit of ¥10.9 billion and net profit of ¥4.7 billion, hit by poor economics in biomass power, impairment at an equity-method affiliate, restructuring costs and goodwill write-downs, with the company conceding its 2026 plan would be hard to meet. In its 180th year, having replaced both where it sells paper and how it earns beyond paper, the task left is to extract profit from the territory it has bought.