Nippon Paper Industries has announced the temporary suspension of operations at its consolidated subsidiary, Nippon Paper Chemicals Europe Zrt.
(NPCE) in Hungary, citing the challenging market conditions surrounding the electric vehicle (EV) industry. The decision is expected to result in an extraordinary loss related to the suspension expenses.
NPCE was established in 2022 to manufacture and supply carboxymethyl cellulose (CMC), marketed as SUNROSE MAC®, for lithium-ion batteries used in electric vehicles. Although the Hungarian facility began local production in 2025, the company has faced increasing pressure from slowing EV demand across Europe and North America, changes in government EV policies, revised environmental regulations, and reduced subsidy support, leading to intensified global competition.
As part of its Medium-Term Business Plan 2030, Nippon Paper stated that the suspension aligns with its strategy of optimizing capital efficiency, implementing structural reforms, and improving profitability. The company will consolidate CMC production at its Gotsu Mill in Japan, enhance manufacturing efficiency, and focus on strengthening its long-term competitiveness while preventing further financial losses and cash flow deterioration.