Mondi's CEO Announces EUR 700-800 Million in Capital Investments Per Year in 2019-2020
"Our disciplined approach to investigating, approving and executing capital projects is one of our key strengths and plays an important role in successfully delivering returns through the cycle." Peter Oswald, CEO, Mondi Group.
March 5, 2019 - Mondi Group's CEO, Peter Oswald, in his remarks about Mondi's 2018 full year results, said Mondi plans to invest on average EUR 700-800 million per year during the next two years on capital projects to drive the company's fibre packaging operations.
“Our disciplined approach to investigating, approving and executing capital projects is one of our key strengths and plays an important role in successfully delivering returns through the cycle. Over the past three years our major capital projects have contributed EUR 95 million of incremental operating profit, including EUR 20 million in 2018. We expect to generate a further EUR 50 million in 2019.
“In the fourth quarter of 2018, we successfully commissioned the EUR 335 million modernisation of the Steti mill to replace the recovery boiler, rebuild the fibre lines and debottleneck the existing packaging paper machines. The project is expected to result in additional annual production of 90,000 tonnes of softwood market pulp and 55,000 tonnes of packaging paper. We have a focused capital expenditure project pipeline securing our future growth. Key developments include:
- We obtained the final necessary permitting to proceed with the EUR 340 million investment in a new 300,000 tonne per annum kraft top white machine at Ruzomberok, with start-up expected towards the end of 2020. The related pulp mill upgrade at the same site is progressing according to plan with start-up expected in late 2019.
- Responding to continued good demand across our range of speciality kraft papers in Europe, supported by the drive to replace plastic carrier bags with paper-based alternatives, we have approved a EUR 67 million capital investment project to convert a containerboard machine at Steti to be fully dedicated to the production of speciality kraft paper with a mix of recycled and virgin fibre content for shopping bags applications. This will also allow us to optimize productivity and efficiency at Swiecie, where this grade is currently produced. The project will result in an additional 75,000 tonnes per annum of speciality kraft paper capacity while reducing our containerboard capacity by around 30,000 tonnes per annum. Start-up is expected by the end of 2020.
- As part of our plan to maintain Syktyvkar's competitiveness and increase saleable production by around 100,000 tonnes per annum in the medium term, we are investing to debottleneck production and avoid unplanned shutdowns, including various upgrades of the mill infrastructure, fibre lines and pulp dryer, and a new evaporation plant.
- We are investigating alternatives for the modernisation of our Richards Bay facility, including the modernisation of the mill's energy and chemical plants.
- We continue to invest in our Fibre Packaging and Consumer Packaging converting plants with competitive advantages to grow with our customers, enhance our product and service offering and reduce conversion costs.
"Our recently completed and planned major capital projects in the Czech Republic, Slovakia and Russia are expected to increase our current saleable pulp and paper production by around 10% when in full operation.
"Given the approved project pipeline and in the absence of any other major investment, our capital expenditure is expected to be in the range of EUR 700-800 million per annum, on average, for 2019 and 2020.”
Mondi is an international packaging and paper group. The group operates as two divisions: Europe & International, and South Africa. To learn more please visit: www.mondigroup.com.
SOURCE: Mondi Group