Establishment of a Joint Corporation in Japan for the Sale of Paper/Paperboard with China's Shandong Chenming Paper Holdings Limited

Oct. 21. 2005
Marubeni Corporation

Marubeni Corporation (Marubeni), together with Shandong Chenming Paper Holdings Limited (Chenming Group) of Shandong Province, China, have agreed to establish CMJ Co., Ltd., a joint venture to sell paper and paperboard in Japan.

Chenming Group is China’s number one paper manufacturer and it is strengthening its production facility as it targets the expanding Asian market, with annual paper/paperboard production capability currently at 2.1 million tons. The group aims to establish brand strength for their products through their experience in the Japanese market, where there are stringent requirements for quality and a strong emphasis on service in areas such as delivery. With a view to investing in a production strategy in an all-Asian market, the company chose Marubeni as a partner based on Marubeni’s experience in the domestic pulp and paper industry.

It is important for Marubeni to establish a new partnership with an import supply source in Asia as the borders in the pulp and paper industry between Asia and Japan are gradually disappearing. In identifying the need to use accumulated expertise and to conduct equable sales cooperatively in our mature domestic market, we decided to establish a new company that fulfils the objectives of both companies.

CMJ Co., Ltd. will implement sales policies that better meet market demands and will aim to give CMJ Group products an established position in the Japanese market.

Marubeni will also promote increased sales of Chenming Group products in the domestic Chinese market, mainly to Japanese companies, through Shanghai Marubeni Paper Sales Co.,Ltd., established this July.


[Corporate Profile]

Company Name      : CMJ Co., Ltd.

Headquarters         : Tokyo

Capital                  : 30 million yen

Stockholders          : Shandong Chenming Paper Holdings Limited 50%
                             Marubeni Corporation 50%

Representative        : Fang Li Jun 

[Corporate Profile - Partner Company]

Company Name     : Shandong Chenming Paper Holdings Limited

Location               : Shandong Province, China

Capital                 : 898 million RMB

Business activities  : Paper manufacturing industry, among others

Sales (December 2004): 7.065 billion RMB (854 million dollars)

Net revenue (December 2004): 504 million RMB (61 million dollars)

[Ranking of Chinese Paper Manufacturers by Production Capacity]

1. Shandong Chenming Paper Holdings Limited     2.1 million tons

2. Gold East Paper (Jiangsu)                              1.8 million tons

3. Nine Dragons Paper Industries                        1.7 million tons

4. Shandong Sun Paper                                     900 thousand tons

5. Lee & Man Paper Manufacturing                     900 thousand tons

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