TOKYO(February 26, 2004)--In March 2004, Nissho Iwai Corporation will establish a business company in Quang Ninh Province, Vietnam that will specialize in plantation and the processing/export of woodchips for papermaking. The new company, Vietnam Japan Chip Cai Lan Corporation, will be capitalized at 1.5 million dollars, of which fifty-one percent will be invested by Nissho Iwai and forty-nine percent by the Vietnam Forest Corporation of Hanoi. The company will commence woodchip production from June with an annual production capacity of approximately 300,000 tons, all of which will be supplied to Oji Paper Co., Ltd. Approximately 10 million dollars in annual sales are expected.

All of the eucalyptus and acacia trees that will be used as woodchip materials are plantation trees. In addition to provisions from the existing plantation, the Vietnam Japan Chip Cai Lan Corporation has a 21,000-hectare afforestation plan that will be implemented by the year 2012. At the same time, from the standpoint of environmental protection, the company will distribute seedling trees to local people free of charge and will proceed with reforestation.

Due to increasing concern over environmental issues such as the protection of forest resources and the prevention of global warming, paper manufacturing companies have come to increase the usage ratio of plantation trees instead of natural trees as woodchip material. In addition, in order to achieve cost reductions, supply sources are been shifted from remote overseas locations to closer locations. The plantation and woodchip business in Vietnam is intended to respond to such trends. Nissho Iwai owns interests in two woodchip processing companies and one plantation company in Vietnam, and the Vietnam Japan Chip Cai Lan Corporation will be the company's fourth woodchip plantation project there. Cai Lan will have a new port, the construction of which will be funded by Japan's official development assistance (ODA), allowing the company to respond to future increases in demand. Nissho Iwai will promote its woodchip plantation business, as well as expansion of production at its existing factories in Vietnam.