International packaging and paper group Mondi has concluded the acquisition of a 96% stake in Egypt-based industrial bags producer Suez Bags for EGP284m ($15.88m).
The deal follows the company’s acquisition of National Company for Paper Products and Import & Export (NPP) in June for EGP510m ($27.79m).
Suez Bags currently operates one production plant near Cairo to serve its regional customers.
According to the company, the deal expands its network of production plants in the Middle East and offers an opportunity to grow its business in Egypt.
It currently operates more than 40 industrial bags plants, including five in the Middle East.
Mondi has also announced plans to shut production of uncoated fine paper machines at its Merebank plant in South Africa during the second half of this year.
The company’s decision comes following a decline in margins of unintegrated paper production affected by an increase in hardwood pulp input costs.
The plant currently has a production capacity of 70,000t per annum.
During the first half of this year, Mondi delivered a strong performance with underlying EBITDA of €852m, a 17% increase with a 22.9% margin.
Commenting on the half-yearly results Mondi Group CEO Peter Oswald said: “We benefited from good demand across our packaging businesses, as well as higher average selling prices while remaining focused on initiatives to drive performance and mitigate inflationary pressures on our cost base.
“We saw a strong operational performance across the pulp and paper businesses, with the exception of the extended shut at our Richards Bay mill (South Africa).”