Packaging and paper group Mondi to reduce Merebank operations
The decision to halt an uncoated fine paper machine at its Merebank plant operations poses a threat to employees
Packaging and paper group Mondi said on Friday it would cease production from one of its uncoated fine paper machines at Merebank, Durban, in the second half of its financial year. The decision could lead to job losses but Mondi CEO Peter Oswald said on Friday the consequences for the workforce were still under discussion. In addition to possible retrenchments, the company was considering absorbing affected employees into other areas within the business. The matter was yet to be finalised.
Oswald attributed the decision to declining margins on unintegrated paper production following the rapid rise in hardwood pulp input costs. This had led to a net special item charge of €18m in the six months ended June 30. The machine was operating at 70,000t per annum production capacity. According to Mondi, the €18m was made up of €13m in restructuring costs and €5m for impairment of assets. Mondi maintained the momentum of strong performance on the back of strong demand and higher prices ...
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