Mondi has revealed plans to widen its paper bag operations in Southeast Asia through a joint venture (JV) with Indonesian cement producer PT Indocement Tunggal Prakarsa.
The new company, PT Mondi Indo Prakarsa Kemasan, will be based at Indocement’s cement factory complex in Citeureup, West Java.
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It will initially manufacture paper bags for Indocement to meet the rising demand in Southeast Asia.
Under the arrangement, Mondi will hold 60% of the business while Indocement will own the remainder.
Indocement will also serve as the anchor customer, which Mondi said will give the venture a stable long-term order base.
The project is part of Mondi’s plan to increase its paper bag presence and develop larger operations in Southeast Asia.
By setting up the JV, Mondi will create a majority-owned manufacturing base in Indonesia and add to its presence in the region while drawing on Indocement’s market position and customer network.
Locating the operation at the Citeureup cement factory complex is intended to support closer day-to-day integration, improve efficiency and help execution.
Mondi also plans to add another paper bag production line next to the current one.
This is expected to add more than 200 million paper bags to Mondi’s global production capacity and provide a base for broader activity in Southeast Asia.
The venture is due to begin operating towards the end of this year, subject to the completion of commercial, operational and legal steps.
Mondi paper bags chief operating officer Claudio Fedalto said: “This joint venture is an excellent strategic fit for our paper bags business. It allows us to establish a strong local platform in a structurally growing market, underpinned by a reliable long-term customer.
“At the same time, it provides a clear pathway for scalable growth while applying Mondi’s high standards in operational excellence, safety and quality.”
Last December, Mondi worked with Polana Bikes on a recyclable paper-based packaging system for moving and storing premium bicycles.
The system replaced the Polish bicycle maker’s previous packaging, which used plastic materials.
