Mpact shuts South Africa’s only coated cartonboard machine as cheaper imports undercut local production

SOUTH AFRICA – Mpact has shut down the BM6 coated cartonboard machine at its Springs Mill, eliminating South Africa’s only domestic production of cartonboard for takeaway packaging, as imports undercut local production by approximately 20%.

The 377-employee mill competed directly with imports from several countries, but a global oversupply of cartonboard enabled customers to import at prices 20% below Mpact’s production costs. 

In January 2026, the mill’s largest customer notified Mpact it would no longer purchase locally and would use imports instead, leaving the company unable to secure sufficient demand. 

The BM3 coreboard machine continues to operate at Springs Mill, though this depends on the government imposing tariffs to protect the local industry. 

How Municipal Mismanagement and Import Pressure Combined to End Production

Mpact explained that the competitiveness of Springs Mill had been significantly impacted by high water and electricity tariffs imposed by the Ekurhuleni Municipality, coupled with supply disruptions that dragged on productivity for years. 

Unlike Mpact’s other production facilities that have invested heavily in reducing reliance on government services, Springs Mill remained dependent on municipal supply. 

The company’s Felixton and Mkhondo Mills, which produce containerboard for domestic and export customers, are located near natural water sources with significant alternative energy supply. 

The group installed approximately 18MWp of solar photovoltaic capacity in 2025 and signed a five-year power purchase agreement for 30 GWh annually of renewable energy. 

Mpact has invested R2 billion (US$107.7 million) across Felixton and Mkhondo Mills to make them more self-sufficient and competitive.

What the Closure Means for Iconic South African Brands and Packaging Supply

The BM6 machine produced cartonboard takeaway packaging for some of South Africa’s most iconic brands, including KFC, Blitz firelighters and Freshpak rooibos. 

Mpact stated that the closure had been substantially implemented but not fully finalised, with remaining stock still being sold. 

The section 189A process at Springs Mill impacted hundreds of staff members, though the group remains financially strong, employing over 4,500 people across 38 sites in Southern Africa. 

The Paper Converting business, Felixton and Mkhondo Mills, and the Plastics division were not affected by the closure. Revenue for the 2025 financial year at Springs Mill was R1,753.3 million (US$94.4 million), with operating profit falling from R32.1 million (US$1.7 million) in 2024 to just R2.0 million (US$107,700) in 2025.

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