Paper products: Internet threat conquered
Sappi and Mondi have adapted to market changes for advertising, publishing and office paper production
Sappi has steadily clawed its way back to growth since early 2014 after being found wanting in the aftermath of the global financial crisis. Coupled with multiple crises across the global advertising and publishing industries caused by the Internet, the company found itself holding expensive, first-class assets in declining world markets for fine coated paper. The path downhill was a steep one, with the stock plunging from around R120/share in mid-2008 to somewhere close to R15 in early 2009. Since then the share battled to reach R40 until a growth spurt brought on by a strategic change in direction began in early 2014. The stock was pushed to above R100 in early 2017 and has now settled at around R90. SA’s rival global packaging, paper and pulp producer, Mondi, rode a charmed upward trajectory despite the collapse in world financial markets. From early 2009 its share price rose steadily and almost without respite, from about R25/share to around R350 now. Binnie says the benefits of...
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