ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that it has agreed with Metsa Group, a leading company in the Finnish forest industry, to set up a pilot plant of cellulose fibers through a joint investment with Metsa Spring Oy, a new company established by Metsa Group for the purpose of investing in new forest based bioeconomy businesses. The total investment will be approximately €40 million (about JPY5 billion).

As a leader in the Finnish forest industry, Metsa Group develops business broadly from forest management and supply of raw wood to production and sales of wood products, pulp, paperboard and tissue and cooking papers. ITOCHU has formed a good relationship with Metsa Fibre Oy (hereinafter “Metsa Fibre”), a core company of Metsa Group and one of the world’s largest softwood pulp manufacturers, which boasts pulp production capacity of around 3.1 million tons a year, for many years since the trading of paper pulp for Japan began in the 1970s. Since then, ITOCHU has been bolstering its relationship with Metsa Fibre by acquiring shares in 2012 to make it an equity-method associated company.

Metsa Group has been undertaking research and development to create new businesses from sidestreams of pulp production and further processed softwood pulp, with the aim of boosting the sustainable bioeconomy and circular economy based on wood raw material. Meanwhile, ITOCHU has been working to expand the trading of eco-friendly materials following the trend of sustainability, particularly among Western brands in the fashion industry. Recognizing this, Metsa Fibre, which has succeeded in the basic research and development of an innovative cellulose fiber using its own manufacturing method, asked ITOCHU to provide cooperation. Given that the confirmation of quality at the trial development stage has been completed, we have reached this agreement.

In producing the cellulose fiber, the establishment of an integrated production system from the manufacture of pulp to the manufacture of fibers by setting up a pilot plant on the site of a mill of Metsa Fibre will help ensure stable procurement of raw materials at low cost and reduce the environmental impact through the use of a new special solvent independently developed by Metsa Group. In addition, the use of ITOCHU’s global value chain from the upstream to the downstream in the textile industry will enable broad traceability from wood resources to textile products and make it possible to develop consistent branding from raw material to product.

As part of the basic policy of “Reinvented Business” in the medium-term management plan, ITOCHU is working to build a value chain with raw materials as a starting point, taking the initiative in the Textile Business. ITOCHU will strive to establish a business model unrivaled by other companies, with a value chain from raw material to product as the key axis, by continuing to exercising the comprehensive capabilities unique to ITOCHU.