Mondi acquires Turkish corrugated packaging company
By Edward West 2m ago
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CAPE TOWN – Paper and packaging product group Mondi said it would acquire Istanbul-listed Olmuksan, a Turkish corrugated packaging player, for €66 million (about R1.2bn).
Mondi said Tuesday in a JSE regulatory filing it would buy 90.38 percent of the outstanding shares in Olmuksan International Paper Ambalaj Sanayi ve Ticaret A.S (Olmuksan), from International Paper.
The implied enterprise value of the Turkish company, on a 100 percent basis, would amount to around €88 million.
Olmuksan is a well-established corrugated packaging player in Turkey. Its five plants provide a diverse customer base with sustainable packaging for food, beverage, agriculture and industrial applications.
Olmuksan produced 256 000 tons of corrugated packaging in the 12 months to September 30, while revenues came to €150m. Olmuksan reported a €10.13m loss at its last year-end.
Mondi has operated in Turkey for many years and has a strong understanding of the market and its long-term opportunities, the group said.
Mondi CEO Andrew King said their current Turkish footprint included four corrugated packaging plants and a recycled containerboard paper mill, and three flexible packaging sites.
“Leveraging our expertise and experience in this market, with our global virgin and recycled container-board portfolio, we expect significant operational improvements and paper integration upside,” he said.
He said the acquisition was an opportunity to “significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering in the region.”
The transaction was expected to complete in the first half of 2021. After this, Mondi would launch a mandatory offer to acquire the remaining 9.62 percent of shares in the company held by minority shareholders.
The acquisition in corrugated packaging follows Mondi experiencing strong demand for this kind of packaging in the third quarter, driven by e-commerce and consumer applications, and also some recovery in industrial end-users from lows reported in the second quarter.
Mondi’’s third quarter trading update stated in October: ”We achieved good volume growth in Corrugated Solutions measured both year-on-year and sequentially. Given the strong order position and normalised inventory levels, we are currently in discussions with customers around price increases for various containerboard grades.”
BUSINESS REPORT ONLINE