10th Jul 2023 13:06
(Alliance News) - Mondi PLC on Monday it had agreed to acquire a Canadian pulp mill for USD5 million from West Fraser Timber Co Ltd.
As part of the deal, the Weybridge, England-based paper and packaging firm will enter into a long-term partnership with West Fraser to access local, high-quality fibre from a well-established wood basket.
The 250,000 tonnes per annum Hinton pulp mill is located in Alberta, Canada.
The acquisition is subject to customary regulatory clearance and is expected to close towards the end of this year.
Subject to pre-engineering and permitting, the group said it intends to invest EUR400 million in the expansion of Hinton, primarily for a new 200,000 tonne per annum kraft paper machine, anticipated to be operational from the second half of 2027.
"Strategically, we are focused on investing to support the growing market demand for our sustainable packaging products, while delivering attractive mid-teen returns through cycle," said Mondi Chief Executive Andrew King.
"The acquisition of Hinton is an excellent opportunity for us to secure locally produced kraft paper for our bags customers, helping to meet the current and anticipated future growth in demand for industrial and mailer bags in the Americas," King said.
Shares in Mondi eased 0.9% to ZAR292.00 on Monday in Johannesburg. In London, the stock was down 0.1% at 1,213.00 pence.
By Artwell Dlamini, Alliance News reporter
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
Mondi