The acquisition will strengthen Mondi’s position as global market leader in the production of kraft paper and paper bags. Mondi also plans to invest EUR 400 million in a new 200,000 tonne per annum kraft paper machine at the Canadian mill, which will become operational in 2027.
Apr 1, 2024
Mondi plc (Mondi), a global leader in the production of sustainable packaging and paper, has acquired the 250,000 tonne per annum Hinton Pulp mill in Alberta, Canada, from West Fraser Timber Company Ltd (West Fraser) for a total consideration of USD 5 million.
As part of the transaction, Mondi will enter into a long-term partnership with West Fraser to access local, high-quality fiber from a well-established wood basket.
The intention, subject to pre-engineering and permitting, is to invest EUR 400 million in the expansion of Hinton, primarily for a new 200,000 tonne per annum kraft paper machine, anticipated to be operational from the second half of 2027.
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The acquisition of the mill and investment in the paper machine will fully integrate operations in the United States of America and enable Mondi to secure the long-term supply of high quality, cost competitive kraft paper into its network of 10 paper bag plants in the region, better positioning Mondi to support the growing market demand for industrial and mailer bags.
Customers will benefit from a fully integrated and much shorter supply chain reducing the carbon footprint of Mondi’s packaging products in the region. The kraft paper produced at Hinton will have the highest quality and strength parameters, which, in combination with Mondi’s expertise, will meet customer requirements for sustainable packaging solutions as paper is increasingly being used for packaging across the USA.
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Strategically, we are focused on investing to support the growing market demand for our sustainable packaging products, while delivering attractive mid-teen returns through cycle. The acquisition of Hinton is an excellent opportunity for us to secure locally produced kraft paper for our bags customers, helping to meet the current and anticipated future growth in demand for industrial and mailer bags in the USA, said Andrew King, Mondi Group CEO.
This acquisition will also enable us to further strengthen our position as the global market leader in the production of kraft paper and paper bags. We are delighted to be making this investment in Canada and look forward to working with Hinton colleagues, West Fraser as a long-term partner, and other local stakeholders towards improving the mill’s environmental footprint and securing its sustainable future, he added.
