CANADA – UK-based sustainable packaging company Mondi has revealed plans to acquire the 250 000 t/y Hinton Pulp mill in Alberta, Canada, from forestry company West Fraser Timber for US$ 5 million.
The completion of this deal is now subject to certain customary regulatory reviews and the fulfillment of customary conditions. It is scheduled to be completed by the end of this year.
The latest transaction is expected to support the growth of Mondi’s Americas paper bags business and further establish a long-term partnership between both companies in the region.
The long-term agreement between Mondi and West Fraser will allow Mondi to access high-quality fiber from a ‘well-established wood basket’ in Canada.
As per the terms of this agreement, West Fraser will continue to supply fiber to its Hinton plant, via residuals from its Alberta sawmills.
Mondi CEO Andrew King said: “Strategically, we are focused on investing to support the growing market demand for our sustainable packaging products while delivering attractive mid-teen returns through the cycle.
“The acquisition of Hinton is an excellent opportunity for us to secure locally produced kraft paper for our bags customers, helping to meet the current and anticipated future growth in demand for industrial and mailer bags in the Americas.”
Mondi is now planning to invest up to €400m (US$438.2m) to support the expansion of the Hinton mill.
According to Mondi, this investment, subject to pre-engineering and permitting, will primarily focus on installing a new kraft paper machine, with an expected annual production capacity of 200,000 tonnes. The machine is expected to become operational in the second half of 2027.
West Fraser president and CEO Ray Ferris added: “This transaction creates a sustainable long-term future for the pulp mill while maintaining the integrated fiber supply chain in place with West Fraser’s operations in the region.”
The deal comes barely a week after the UK-based packaging company completed the sale of its three Russian packaging converting operations to Russian packaging producer Gotek Group.
Mondi received net proceeds of €30.4 million (US$ 33.03m) from this disposal into its Austrian bank account.
The net proceeds from the sale of all Mondi’s Russian assets will be distributed to shareholders as soon as reasonably practicable following receipt, once the company’s exit from Russia has been completed.
The proposed disposal of Mondi Syktyvkar – Mondi’s most significant facility in Russia – is not connected with this disposal and the company’s board says it remains committed to divesting Syktyvkar.
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