Sector News

Mondi strengthens position in Europe with e60m deal

May 26, 2015
Chemical Value Chain
PAPER and packaging producer Mondi has signed a e60 million (R785m) deal to acquire two coatings sites owned by Walki Group, an international maker of technical laminates and protective packaging headquartered in Finland.
 
The JSE-listed company has operations in Russia, South Africa and North America.
 
It would acquire a 100 percent stake in Walki’s extrusion coatings plants in Pietarsaari, Finland, and Wroclaw, Poland, it said on Friday.
 
“The acquisition will strengthen Mondi Group’s position in the European extrusion coatings market and increase the range of technical capabilities on offer to customers,” the company said.
 
The transaction is subject to competition clearance and is likely to be completed by the third quarter. The operations generated e113m revenue and unaudited adjusted earnings before interest, taxes, depreciation and amortisation of e9m in the year to April.
 
The Walki plant in Pietarsaari produces wrapping materials for the paper industry, barrier lining, covering material for biomass and selected technical products. The plant has a production capacity of 100 000 tons a year and employs 195 people.
 
The Walki plant in Wroclaw focuses on the production of wrapping material for the paper industry, barrier lining and flexible packaging material. It has a production capacity of 45 000 tons a year and employs 50 people.
 
Previously analysts have commended Mondi’s capital allocation as being a key success of the group. Over the past two years Mondi has invested e350m in projects with returns in excess of 40 percent.
 
Sanlam Investments equity analyst Lazar Naiker said the majority of the projects focused on cost optimisation. “Further spend of e420m over the following two years is expected to yield returns in excess of 20 percent,” Naiker added.
 
Mondi acquired a 93.4 percent shareholding in Nordenia, an international supplier of innovative consumer packaging solutions and hygiene components for e240m in 2012.
 
Naiker said the acquisition had been slower to deliver on expected returns given a weak global consumer. “This business does appear to be turning a corner and provides a good base for Mondi to deliver high-value, specialised consumer packaging products.”
 
Mondi posted a 29 percent rise in profits in the first quarter of the year on higher sales, lower input costs in its main European market and increased selling prices in Russia and South Africa.
 
It said contributions from capital projects and acquisitions had also improved its underlying operating profit to e236m for the three months to March compared with e183m in the corresponding period a year ago.
 
Mondi, which is also listed in London, said the returns were 9 percent above its 2014 fourth-quarter operating profit of e216m. The company’s shares on the JSE closed Friday up 0.81 percent at R280.
 
By Dineo Faku  
 
Source: IOL

comments closed

Related News

May 21, 2022

Sika opens new manufacturing plant in Bolivia 

Chemical Value Chain

Sika AG (Baar, Switzerland) has opened a new plant in Santa Cruz de la Sierra, thus doubling its production capacity for mortar and concrete admixtures in Bolivia. With this new facility in one of the country’s main industrial agglomerations, Sika is positioning itself for continued growth in the dynamic Bolivian construction market.

May 21, 2022

Chevron increases renewable fuel market share with REG acquisition

Chemical Value Chain

Chevron Corporation (NYSE: CVX) and Renewable Energy Group, Inc. (NASDAQ: REGI) (REG) announced on Monday a definitive agreement under which Chevron will acquire the outstanding shares of REG in an all-cash transaction valued at $3.15 billion, or $61.50 per share.

May 21, 2022

Lotte Chemical to invest $8 bn on hydrogen energy, battery materials by 2030

Chemical Value Chain

Lotte Chemical Corp. will invest 10 trillion won ($8 billion) on hydrogen and battery materials through 2030 to achieve annual revenue of 50 trillion won and carbon neutrality. The Korean chemical producer on Thursday unveiled its new corporate vision outlining key corporate strategies with focus on growth through hydrogen energy and battery materials businesses.