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packagingnews.co.uk
Mondi to spin off South Africa packaging unit
Mondi is to spin off its £500m-turnover South African packaging subsidiary in a bid to focus both businesses on their core markets.
The Anglo-South African paper and packaging group yesterday said that Mondi Packaging South Africa (MPSA), in which it owns a majority 70% stake, would be listed on the Johannesburg Stock Exchange under a new name.
Mondi said that MPSA’s future growth strategy was being held back by being part of the Mondi group, in particular because of its rigid plastics business which is unique in the Mondi group.
However, statements released yesterday showed that following the demerger, Mondi’s equity in the business would actually increase to around 90%.
Mondi Group chief executive David Hathorn said in a statement: “This is the right time to demerge MPSA, for both Mondi Group and MPSA.
“Whilst Mondi Group has been a very supportive owner, this move will give MPSA the flexibility it needs to develop its core growth areas.
“MPSA is unique within the Group as no other part of Mondi produces rigid plastics or cartonboard and therefore the Board felt that MPSA would be best placed to take advantage of the considerable opportunities available to it as an independent entity.”
MPSA had sales in 2010 of ZAR5.7bn (£522m), of which around three-quarters was related to paper packaging and recovery and the remaining quarter was in its plastics business.
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