Mondi hikes prices, cuts 450 jobs as Middle East conflict drives energy, raw material costs

AUSTRIA – Mondi has announced it is increasing prices and reducing headcount by 450 as the Middle East conflict escalates costs, with the paper and packaging group reporting underlying EBITDA of €212 million (approximately US$231 million) in Q1 2026, down from €214 million (approximately  US$233 million) in the previous quarter, as higher energy, raw material, and logistics costs weighed on earnings.

The company said trading in the first quarter of 2026 remained challenging. Sales volumes rose from the previous quarter in corrugated and flexible packaging, helped by added capacity and the absence of scheduled maintenance stoppages. 

That improvement was countered by weaker average selling prices and a rise in energy-related input costs near the end of the quarter.

Cost Pressures and Pricing Actions

In converting operations, Mondi said margins were under strain in the corrugated solutions and paper bag divisions while consumer flexibles was broadly steady, supported by resilient end-markets. 

While Mondi’s direct exposure to the Middle East region is limited and operations remain safe, it has faced higher energy, raw material, and logistics costs across the business. 

The group is taking pricing action and expects those increases to be fully reflected in the third quarter, after the usual delay.

Mondi also said that a recent drop in wood prices in South Africa means its full-year forestry fair value gain for 2026 is now expected to be nil, assuming no major change in market conditions for the rest of the year.

Plant Closures and Restructuring

As part of wider cost measures, the company decided to shut three more converting plants this month: a consumer flexibles site in Hungary, and corrugated solutions plants in Poland and Germany. 

Those closures are due to cut headcount by 450 this year, bringing the total number of recently announced plant closures to six, with customer volumes being moved to other facilities within the group’s network. 

Mondi said it remains focused on cash flow, with spending and working capital kept under close control.

Andrew King, Mondi Group CEO, explained that against a backdrop of challenging market conditions, sales volumes increased, although lower selling prices and cost pressures linked to escalating geopolitical tensions weighed on underlying EBITDA. 

He noted that these pressures persist into the second quarter, and the company is taking pricing actions to mitigate their impact, with full effect expected in the third quarter. 

He added that despite the uncertain outlook, Mondi continues to focus on operational excellence, cost and margin discipline, optimising its production footprint, and cashflow management.

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