Parcelled for growth and profit

Mondi is enjoying the best trading environment in a decade, but Nampak and Mpact are in a different position

It has taken the better part of a decade to materialise but finally Europe’s economy is signalling that a revival is under way. It is a revival paper packaging group Mondi has been investing for since its unbundling by Anglo American in 2007.

“Our assets give us a clear cost advantage,” Mondi CEO Peter Oswald told investors at a recent presentation. “It gives us a platform for strong future growth.”

Since 2007 Mondi has pumped over €5bn into capex, with an unswerving focus on driving efficiency. Oswald says paper output per employee lifted from 100 t in 2007 to 183 t in 2016 and return on capital employed rose from 13.6% in 2012 to 20.3% in 2016.

Mondi retains a dual listing structure. Mondi Plc’s primary listing is on the London Stock Exchange, where it is a FTSE 100 index member, and its secondary listing is on the JSE.

“Mondi can no longer be seen as an SA company,” says Wade Napier of Avior Capital Markets. Operations in SA, where Mondi was founded by Anglo American in 1967, account for only 10% of group revenue.

For Mondi, Europe is the crucial region. Of its €7.2bn annual revenue, about 70% is generated in Europe — 37% in Western Europe, 21% in emerging Europe and 11% in Russia.

The news is good on all fronts. According to the European Commission the European Union’s (EU) GDP is on track to have grown by 2.3% in 2017 — its fastest in a