Nippon Paper Industries has decided to temporarily suspend the business of Nippon Paper Chemicals Europe Zrt. (NPCE), its consolidated subsidiary in Hungary that produces carboxymethyl cellulose for lithium-ion batteries used in electric vehicles (EV).
NPCE was established in Hungary in 2022 and began local production in 2025, but around the time production started, the external environment surrounding the EV market grew increasingly challenging with successive reviews of environmental regulations in Europe and North America, changes in EV promotion policies, and revisions to subsidy systems, leaving the company facing intensified global competition.
The company worked to develop new customers while strengthening cost competitiveness, but with difficult-to-anticipate market changes, securing stable earnings under current conditions proved challenging, with returns commensurate with the investment no longer expected.
Nippon Paper will consolidate CMC production at its Gotsu Mill in Japan and strengthen competitiveness by improving production efficiency, while expecting to recognize an extraordinary loss of approximately ¥5.0 billion ($32.5 million), including an impairment loss on non-current assets, for the fiscal year ending March 31, 2027.