Mondi in position for the paper chase


Mondi in position for the paper chase


Published Date: 2019-03-01 | Source: Stephen Gunnion | Author: Stephen Gunnion

Mondi in position for the paper chase

The paper and packaging group says it's well-placed for the move from plastic to paper.

Mondi says 2018 was a watershed year for the packaging industry, with a growing move away from plastic to reduce the millions of pieces of waste finding its way into the world's oceans every day. As the market leader in kraft paper and paper bags, it believes it's in the perfect position to lead the way.

Kraft paper is made from chemical pulp designed for packaging products and is totally recyclable and biodegradable and Mondi is making even more of it following the modernisation of its €335 million Steti factory in the Czech Republic. And it's about to proceed with an investment in a 300,000 tonne kraft top white machine at its Ruzomberok million in Slovakia. The price of kraft paper is also on the rise.

Reporting back for the year to end-December, the paper and packaging group said it had built on its track record of value accretive growth. Revenue rose 5% over the period to €7.5 billion due to higher average selling prices across all its businesses. While volumes in its Fibre Packaging unit rose, Consumer Packaging volumes were impacted by its decision to exit lower margin business and a decline in volumes in personal care. Core product volumes in its Uncoated Fine Paper business were up year-on-year, but market pulp and newsprint volumes were negatively impacted by an extended shutdown at its Richards Bay mill and the decision to exit the SA newsprint market.

It reported a 23% improvement in operating profit to €1.19 billion. Basic underlying earnings per share increased by 27% to 189.1 euro cents and it's recommended a final dividend of 54.55c, taking its total dividend for the year 23% higher to 76c.

The group has also developed flexible plastic packaging and has solutions to reduce plastic waste by about 70%, while its research and development department works on more solutions for plastic recycling.

It said a recent proposal to simplify its dual listed structure into a single holding company under Mondi Plc would streamline cash and dividend flows, increase transparency and remove the complexity associated with its current structure, which includes its LSE-listed Mondi Plc shares and its JSE-listed Mondi Limited shares.

Mondi Plc shares fell 4.8% to R327.25 yesterday while Mondi Ltd was down 5.1% to R331.21.


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