Mpact declares force majeure at Springs Paper Mill
The mill has been without electricity since August 19 after the failure of a substation in Ekurhuleni
Paper and plastics packaging group Mpact says it has declared force majeure at its Springs Paper Mill in Ekurhuleni, which has been without power for almost a month after the failure of a substation.
Mpact said it had been initially advised that electricity would be restored by no later than September 7, but that had not occurred.
The mill has been without power since August 19 due to a fire and explosion at the municipal substation in Ekurhuleni.
Force majeure — or “superior force” — is a doctrine in law in which unforeseeable circumstances prevent someone from fulfilling a contract through no fault of their own.
Mpact said the power interruption was covered by its insurance policy, but that the effect on earnings remained uncertain.
The mill produces coated white top cartonboard, which its used for packaging foodstuffs. It also produces materials for use in toilet rolls, paper reels, cling wrap rolls, among other products.
The mill’s total revenue in 2019 was approximately R1.3bn, about a quarter of the group's R5.2bn in revenue.
In morning trade on Wednesday, Mpact’s share was down 3.42% to R7.63, having almost halved so far in 2020.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.