Mondi aims to ride out ‘challenging year’ after Q1 capacity cuts

The news comes as the group reported an underlying operating profit for the three months to the end of March similar to that of the final quarter in 2008, in an interim trading report published today.

According to the statement, stronger performance in the bags, specialities and fine papers sector had driven underlying profits up. However, the corrugated business remained extremely challenged by weak demand, it said.

Key costs for the group, such as those for wood, recovered paper, pulp, energy and chemicals, are reported to have eased in quarter one.

Since the start of 2008, the company has attempted to remove 600,000 tonnes of higher cost paper capacity in Europe, the equivalent of 14% of the group’s European paper production capacity.

So far this year, Mondi has completed the divestment of three corrugated converting operations in France and is continuing with the restructure of its Turkish corrugated business, its coatings business in Finland and the UK, and its consumer flexibles business in Austria.

Packaging News also revealed yesterday that the company is considering options for its Bux plant in Norfolk, following speculation that it may be up for sale.

The company said it had seen signs that the “rapid destocking” experienced last year was coming to an end, but that it expected the global economic situation to continue to “create challenges for the remainder of 2009″.

In February, Mondi reported a net loss of EUR 103m (£92m at today’s rates) for the year to 31 December, down from a net profit of EUR 382m in the previous year, and a 1% increase in sales of EUR 6.3bn.

Popular Articles