Mondi to sell Russian mills

United Kingdom-based Mondi PLC says its board of directors has “decided to divest the group’s Russian assets” in a process it says will be “operationally and structurally complex and is being undertaken in an evolving political and regulatory environment.”

The company announced March 10 it was reviewing its position in Russia, about two weeks after Russian armed forces invaded Ukraine. Subsequently, the board says it “remains profoundly concerned about the war in Ukraine and is shocked by the humanitarian impact. We express our deepest sympathy to all those affected by the ongoing hostilities, reiterating our call for an urgent cessation and a peaceful resolution.”

In its May 4 update to investors, Mondi says it can offer “no certainty when a transaction will be completed” but estimates the net asset value of the Russian operations at nearly $850 million.

On its website, Mondi lists one of its mills in Russia as producing containerboard, while several others produce printing and writing papers. While the company does not spell out which mills in Russia consume recycled fibers and which virgin fiber, the remote locations and white papers being produced likely indicate much of the Russian capacity is virgin-fiber-based.

Mondi Group overall, meanwhile, points to sustainability-linked products as key to its current business operations and prospects. Mondi says this year its Flexible Packaging business unit has performed well “driven by strong demand for sustainable packaging solutions.”

Of its first-quarter results, the firm says, “Mondi delivered strongly in the first quarter of 2022. Demand was good across the business, supported by our broad range of innovative, sustainable packaging and paper solutions, product quality and customer service.”

The company says it has some $1.2 billion in capital projects in its “pipeline,” with its investment program tied in part to “our packaging businesses in structurally growing markets underpinned by demand for e-commerce and sustainable packaging solutions.”

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