Kokusai Chart Corporation (President: Shigenori Otsubo, headquarters: Okegawa-City, Saitama Prefecture), Oji Paper Co., Ltd. (President: Shoichiro Suzuki, headquarters: Chuo-ku, Tokyo) and Oji Specialty Paper (Shanghai) Co., Ltd. (Chairman: Naotoshi Sekiguchi, headquarters: Qingpu, Shanghai), a wholly owned subsidiary of Oji Paper, signed an production entrustment agreement on 2003. The agreement covers the joint development of a chart paper business targeting industrial recording machines in petrochemical plants and other facilities in European and North American markets, starting in 2004.

Kokusai Chart and Oji Paper have previously worked together in the area of chart paper and thermal paper for use in measuring instruments, with Oji Paper as the supplier and Kokusai Chart as the processor of high-quality paper for high-precision printing paper. The two companies agreed to collaborate on the joint development of a chart paper business targeting international markets, aiming to achieve the biggest share of the world market in this area.

1. Building a Presence in European and North American Chart Paper Markets
With a domestic market share in excess of 50%, Kokusai Chart is Japan's leading supplier of chart papers for use in recording systems for temperature, pressure, flow volumes and other measurements. It has developed its business primarily by meeting the needs of a wide range of users within Japan, which is one of the most exacting markets in the world in terms of the product quality demanded. The new business partnership with Oji Paper will provide Kokusai Chart with a reliable international production and supply structure, allowing it to market its high-quality chart papers on a significant scale in the European and North American markets.

Oji Specialty Paper (Shanghai) will commence production of chart paper for the European and North American markets. In the past, it primarily manufactured high-quality thermal paper for use in cash register printers. It now plans to establish a new production system, including printing facilities and related equipment, to manufacture chart paper specified for the European and North American markets, under contract to Kokusai Chart. Kokusai Chart will provide printing expertise and technical guidance, as well as special chart printing equipment. Oji Specialty Paper (Shanghai) will produce high-quality chart paper using paper sourced from Oji Paper. Initially, the entire output will be purchased by Kokusai Chart for sale mainly through its branch offices in Europe and North America. The two companies also plan to develop new types of chart paper that will be suitable for the Chinese market and develop operations there. Kokusai Chart will continue to produce products specifically designed for the Japanese market in its own facilities.

2. Outlook
Chart papers produced by Oji Specialty Paper (Shanghai) are going to be sold mainly in the North American and European markets. Through the synergistic effects of Oji Specialty Paper (Shanghai), the overseas sales of Kokusai Chart are expected to increase to 400 million yen in fiscal 2004 and 1,000 million yen in the fiscal 2006, from approximately 200 million yen in fiscal 2003. Oji Specialty Paper (Shanghai) plans to commence trial production in January 2004 and full-scale production in February 2004. It also intends to expand its production capacity in step with sales growth.