Mondi forms Indonesian paper bag joint venture with Indocement, adding 200M units in capacity

INDONESIA – Mondi has formed a joint venture with Indonesian cement producer PT Indocement Tunggal Prakarsa to create PT Mondi Indo Prakarsa Kemasan, with Mondi holding 60 percent and Indocement 40 percent, based at Indocement’s Citeureup cement factory complex in West Java, initially manufacturing paper bags for Indocement as the anchor customer.

The venture is expected to begin operating towards the end of this year, subject to completion of commercial, operational, and legal steps.

Mondi plans to add a second paper bag production line adjacent to the first, which is expected to add more than 200 million paper bags to Mondi’s global production capacity and provide a base for broader activity in Southeast Asia.

Why Indonesia, Why Now

Indonesia’s cement market is the largest in Southeast Asia, driven by infrastructure development, urbanisation, and a growing construction sector.

Cement producers are among the largest consumers of industrial paper bags, using them for both domestic distribution and export packaging.

By establishing a manufacturing base at Indocement’s factory complex, Mondi eliminates transport distance between bag production and filling, reducing logistics costs and carbon emissions.

A Stable Foundation with Room to Grow

Indocement will serve as the anchor customer, giving the venture a stable long-term order base. For Mondi, this guarantees demand for the initial production line and reduces the risk of capacity underutilisation.

For Indocement, the venture secures a dedicated supply of paper bags, reducing dependence on third-party suppliers and providing quality control over a critical packaging input.

The planned second line would allow the venture to serve additional customers beyond Indocement, positioning Mondi as a regional paper bag supplier for the broader Southeast Asian market.

Claudio Fedalto, Mondi’s paper bags chief operating officer, explained that this joint venture is an excellent strategic fit for the paper bags business.

He noted that it allows Mondi to establish a strong local platform in a structurally growing market, underpinned by a reliable long-term customer, while providing a clear pathway for scalable growth and applying Mondi’s high standards in operational excellence, safety, and quality.

Cement and Paper: An Unlikely Pair

Cement plants are not typical locations for paper bag manufacturing.

But locating the venture at Indocement’s Citeureup complex means bags can move from production line to filling line without truck transport.

That integration reduces cost, cuts carbon, and creates a model that Mondi could replicate with other industrial customers across Southeast Asia.

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