South Africa-based Mpact has released a trading update, stating the first five months of the financial year has been strong, with underlying profit exceeding pre-pandemic comparatives in both Plastics and Paper businesses.
Group Revenue for the five months to the end of May is reported at R4.8 bn, which exceeded the prior period by 16%, while underlying operating profit more than doubled to R240m. The Paper business benefited from improved global containerboard prices, increased local sales and higher average prices. The benefits of higher containerboard prices were partly offset by higher waste paper costs which have increased since the end of 2020, along with a general increase in demand and pricing for commodities.
Mpact is investing to take advantage of the significant structural shifts in the global economy as it rebounds from the COVID-19 slump. To ensure they are well positioned to take advantage of a sustained increase in customer demand across its business segments, the Board has recently approved over R500m in investments. Over the next 24 months, the company is building new facilities, while investing in new technology, plants, equipment, and solar power production that will improve efficiencies and expand capacity to meet growing customer demand. The key projects include:
- Mpact Recycling’s development of a new purpose-built facility in KZN that is well situated to supply its Felixton Mill. It will deliver improved operational efficiencies and accommodate anticipated volume growth to supply a greater proportion of the mill’s recycled paper requirements from the area.
- Investments in Mpact Corrugated and Detpak’s paper converting capabilities, including a new customer service centre in Limpopo, to meet growth in demand for paper bags, punnets and corrugated boxes, particularly in the fresh produce sector.
- Expansion of the Group’s solar PV generation portfolio by constructing more than 6 MW of solar generation capacity at five plants. This will increase Mpact’s total installed renewable energy generating capacity to over 10 MW by the end of 2022 and deliver environmental and social benefits essential to our sustainability.
