Global Printing Summit ForumNovember 13th, 2011 Shanghai, China

The Japanese Printing Industry’s

Challenges- Recovery from the Earthquake Disaster-

- Green Practices-

-Creation of a New Market-

Satoshi SaruwatariChairman of the Japan Federation of Printing Industries (JFPI)

1. Recovery from

the Earthquake Disaster

1-1. Damages of Earthquake and Tsunami

Tokyo

Sendai

Distance between Tokyo and Sendai:

approx. 350 km

Damage situation of the Great East Japan

Earthquake

Dead and missing: approximately 20,000

Damage estimated by the government stands

at 16 trillion–25 trillion yen

Fully or partially destroyed constructions total

over 270,000

Direct damage to printing companies

Fully destroyed: 30

Partially destroyed: 10

Damage to printing-related industries

Some of major paper manufacturing factories

were struck by the earthquake.

Procurement of some raw materials became

difficult for ink manufacturers.

1-2. Initial Recovery

Faster-than-expected initial recovery

- Fuel such as gasoline: Gradually stabilized 2 to 3 weeks after the earthquake.

- Supply of paper and ink: Secured a reasonable volume except for some products

after one month

- Restoration of equipment such as printing machines: Promptly recovered with the

cooperation of equipment manufacturers. Many were restored in March.

Handling of new problems - electricity shortage

Companies that use electricity at over 500 KW were legally asked to reduce

consumption by 15%.

- Change operating days to Saturdays and Sundays when electricity load is small

- Operate early morning and at night in order to reduce peak electricity use during

the day

- Reduce electricity consumption in preparatory work for production and peripheral

equipment

- Energy saving for air-conditioning equipment and lighting, etc.

1-3. Special Thanks

We have received warm support for

this unprecedented disaster from

various countries.

We would like to take this opportunity

to express our appreciation.

2. Green Practices

Environmental Protection

Pollution Control

7

- 1950s: Significant, rapid economic growth

In particular, air and water environments, etc., deteriorated, mainly in industrial and

urban areas.

- 1960s: Concerns about serious environmental pollution and the impact on physical

wellbeing rose.

Developed into a pollution issue

- 1967 Basic Act for Environmental Pollution Control enacted, 1971: Environment Agency

established

- Post 1980: With the effect of national regulations, pollution problems improved, to a point.

On the other hand, addressing global-scale environmental issues such as global warming

became necessary.

- 1992: The United Nations Conference on the Environment and Development was held.

(Earth Summit)

- 1993: Basic Environment Law enacted

- 1997: COP3 (the Kyoto conference): the Kyoto Protocol adopted

2-1. Progress in Japanese environmental issues

8

2-2. Printing Related Environmental Laws

Basic Environmental Law

Emission ControlPollution Control

Waster RecycleGlobal warming

PreventionChemical Control

Environmental Information/Education

Air Pollution Control

Law

The Basic Law for

Establishing recycling-based

Society

Ozone Layer Protection Law Environmental

Consideration

Promotion Act

Water Pollution

Prevention Law

Waste Disposal and Public

Cleaning Law

Energy Conservation Law Environmental

Education

Promotion Act

Sewerage Law Law for promoting effective

use of resources

Act on Promotion of Global Warming Countermeasures

Noise Regulation Container and Package

Recycling Act

CFC Recovery and Destruction Law

Vibration regulation Law on promoting green

purchasing

PRTR(Pollutant Release and

Transfer Register) Act

Odor Regulation Act on Special Measures to Dioxins

Pollution Control

Organization Law

Law Concerning Special Measures against PCB waste

Other Control Law

9

1.Natural symbiosis society (Environment preservation:

reduction of environmental

pollutants)

4. Sustained improvement

of efforts

3. Recycling-oriented

society

(material recycling)2. Low-carbon society

(Prevention of global

warming: energy saving)

The JFPI

Green Practices standard

2-3. Setting up the Green Practices standard

The JFPI Green Practices standard is adopted as referential material for

the basis of the Act on Promoting Green Purchasing.

3-1. Use of sustainable

resources

3-2. Long-term use

3-3. Reuse

3-4. Recycle

3-5. Ease of disposal

10

Green Practices

Standard

(Voluntary efforts)

GP certification

Scheme

Prevention of

global warming

(Promotion of

energy saving)

Excellent

Environment

Factory

Award

Recycling

promotion

VOC handling

Compliance with

environment-related

laws

2-4. Environmental efforts by the JFPI

2-5. Green Practices standard and GP certified system

Types of JFPI Green Practice Standard

OffsetPrinting

SealPrinting

GravurePrinting

ScreenPrinting

Structures of JFPI Green Practice Standard

ManagementSystem

ProcuredMaterial

ProductionProcess

Green Printing Product Certification Scheme

Green Printing Factory Certification Scheme

Certify a factory which conforms Green Practice

Standard.

A scheme which approves use of GP mark to the

product which conforms Green Practice Standard.

12

2-6. Environmental labels and practical examples

Environmental labels listed on the website of the Ministry of the Environment

Examples of GP mark, recycle mark

GP mark

Recycle mark

.

3. Creation of a New Market

14

3-1. 7.4-trillion-yen market in 2020

Unit: million Yen

Other

Special

printing

Package

Business

Forms

Security

printing

Commercial

printing

Publishing

Software

service

- Oversupply

Excessive capital investment, decrease in print media, continuing price

competition

- Progress of digitalization

Dissemination of internet, smart terminal (tablet, etc.) and social media

Upgrading of digital printing equipment, integration of cloud and printing

technology

- Printing commoditization

In-house printing, competition of surrounding industries

- Mega competition

Media competition, vertical competition (prepress and post press),

international competition

- Change in lifestyle

Budget-mindedness, energy-saving-mindedness after the earthquake disaster,

dwindling birthrate and an aging population, economic recession 15

3-2. Market environment over printing (1)

- New business opportunity

Solution opportunity with abundant industries, efforts in new industry needs

Highly functional material, packaging material, electronic components based on printing

technology

- Efforts in digital business

Digital media, digital promotion business

Area, segment-type media business, digital convenience, B to C business

- Outsourcing business

Expansion of in-house business, expansion of planning or proposing-style business

opportunities Personal information-related, system operation, document server center,

specialized service

- Integration and restructuring

Alliance (vertical and horizontal), chain operation, branding

- Environment, safety, security

Rediscovery of paper usability, electricity saving, paper container, security technology

- Global expansion

Overseas market entry, alliance with foreign corporations, international procurement16

3‐3. Market environment over printing (2)

Sustain an 8-trillion-yen industry, while developing a 600-billion-yen new market and business by 2020

1. Expansion of business opportunities: Approaches to various new market

opportunities

2. Redefinition of the printing industry: Shifting from homogeneous competition to

heterogeneous competition

3. Cross media: Aggressive response to digital media

4. Diversification through printing technology: Highly functional materials, electronics,

retail and packaging materials

5. Closer relationships with clients: Business progresses from subcontracting to

partnership

6. Acquisition and development of human resources: Improvement of industrial

image and aggressive alliance

7. Improvement of profitability: Collaboration among companies and institutionalization

Enhanced corporate-management capabilities and strengthened industrial power17

3-4. The Direction of printing industry

Securityprinting

Publishing

Package

IndustrialMaterial

electronics

HousingMaterial

BF

CTSDTP

IC CARDRFID

CrossmediaDigital

Signage

Web-to-Print

FillingOutsourcing

MarketingServices

EcoFriendlyMaterial

Data Print

DataCenter

Operationservice

CommercialPrint

Digitalization

Advanced Function/Environmental Features

Solutions &Outsourcing

Business Model Innovation

DigitalConvenience

Store

AdvancedPackagematerial

SystemSales

AdvancedFunctionalMaterial

MaterialSales

EcoFriendlySheet

HousingMaterial

DB

ConsumerOriented

Print ServiceArchiveServices

Design Services

CRMService

CGDesign

Component

DesignSupport

Designsupport

Photobook

System/DB

SecureSystems

University/Bookstore

Support

CorporatePrint Center

MailingServices

DocumentCenter

SecureTools

Printedelectronics

eBookStore

ContentsDistribution

Cloud basedPrint Services

IntelligentPackage/label

Multi channel

solution

ePublishing

3-5. The Printing Industry’s “Vision 2020”

19

- This is a chart of the printing industry’s Vision 2020 that we envision.Core businesses in which the printing industry has been engaged are in the center. However, times have changed, and with only these businesses in the center, the whole industry will deteriorate and be unable to respond to printing requests from a changing society.

- We consider the printing industry’s evolution in 4 directions.The first is evolution by digitalization. The business concept itself changes.The second is advanced function and environmental features. We respond to society’s needs with technology innovation.The third is the entry to solutions and outsourcing.The fourth is the advanced business model. This is pursued and linked up with the other 3 evolutions.

With these 4 evolutions, we believe that the scope of business up to now will expand sequentially, and it is possible to reform the business condition. And we hope to secure our position as the 8-trillion-yen industry we have established so far.

- The printing industry has overcome many technical and social changes in its history.The challenges I spoke of today are also part of such changes. Moreover, these changes are not only for Japan but will also have an impact all over the world.These are not easy challenges. The printing industries in each country should try to cooperate in areas where we can work together, and it is necessary to stand up to these changes.

3-6. The Printing Industry’s “Vision 2020”

20

3-7. Our Mission for the Future

- Our printing industry has had a historic mission since Gutenberg, to fulfill a

role to provide an information distribution base.

We are facing with a great tide of new information-communication

technologies such as digitalization and networking.

It is a time to re-evaluate true value of printing and its extension of business

fields.

We will challenge and open the way to the future of the printing industry and

we will re-define the meaning of printing

By sending this message to you all, I would like to conclude my presentation.

Thank you for your attention.

Satoshi SaruwatariChairman of the Japan Federation of Printing Industries (JFPI)