What is the investment case for Mondi and the resurgent Sappi?
Mondi's market cap has grown fourfold since 2007, largely as a result of its focus on packaging, while Sappi's stock is at a record high
If the SA paper industry is a tale of two companies — Mondi and Sappi — it is instructive to compare Sappi’s strategic thinking at the time.
Under former empire builder Eugene van As, Sappi decided it wanted to be the "biggest and best" in the glossy paper universe. It was a decision that hobbled the group for over a decade as the digital era ate its lunch.
It took until 2009 for Sappi to rethink its plans, and shift its focus to pulp.
More than 50% of Sappi’s profit now comes from dissolving pulp — which has been growing more than 10%/year in recent years.
Is there still value? What is the investment case for Mondi and the recently resurgent Sappi? Is the market finally waking up to the fact that diagnosis of the death of paper was premature?
If you are already a subscriber, please click on the following link below to go to the full article: How Mondi and Sappi proved everyone wrong and reinvented themselves
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