Oji Holdings, a major Japanese paper and diaper manufacturer, announced it will cease domestic production of baby diapers in September. This decision comes as Japan grapples with a rapidly aging population and record-low birth rates.

Oji Holdings, citing a decline in demand, plans to shift its focus to the adult diaper market, which has already surpassed sales of baby diapers for over a decade. The company's subsidiary, Oji Nepia, currently produces 400 million baby diapers annually, a significant drop from its peak of 700 million in 2001.

Japan's shrinking population is a growing concern. In 2023, the country saw its lowest birth rate on record with only 758,631 babies born, a 5.1% decrease from the previous year. Meanwhile, the elderly population continues to rise. Nearly 30% of Japanese residents are now 65 or older, and over 10% are above 80 years old.

While Oji Holdings will discontinue baby diaper production in Japan, it will continue operations in Southeast Asia, where birth rates remain higher. The company anticipates continued growth in markets like Indonesia and Malaysia.

Japan's demographic crisis is not unique. Neighboring countries like South Korea and Singapore also face plummeting birth rates, with South Korea holding the unfortunate distinction of the world's lowest.

Efforts by the Japanese government to incentivize childbearing, such as increased spending on child-related programs, have yet to yield significant results. Experts point to complex social factors like later marriage, increased female workforce participation, and the high cost of raising children as reasons behind the low birth rates.

"This is a matter of 'now or never' for our society to function," warned Prime Minister Fumio Kishida last year, highlighting the urgency of addressing the demographic crisis.