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March 11, 2022

Mondi ‘assessing options’ for Russian operations amid Ukraine crisis

The company has already suspended production at its paper bag plant in Lviv, Ukraine.

Multinational paper and packaging company Mondi has provided updates on its business activities in Russia and Ukraine amid the heightened geopolitical tension.

The company said that operations in Russia, a country that represented 12% of its revenue by location of production in 2021, are continuing.

The country also generated 20% of the group’s underlying EBITDA in the last three years.

Mondi has operated in Russia for more than 22 years and has three converting plants in the country, all of which primarily serve the domestic market.

In addition, the company wholly owns an integrated pulp, packaging paper and uncoated fine paper mill in Syktyvkar, Komi Republic.

The mill operates an integrated power plant, which supplies heat and hot water to approximately 60,000 people in the locality.

Mondi is legally required by the Russian authorities to provide energy from this facility.

In a statement, the company said: “Syktyvkar is currently operating, but the mill is starting to see a number of operational constraints, including in the importing of process chemicals, spare parts and other critical supplies. While difficult to assess the ramifications in what remains a fast-moving situation, this may significantly impact the operation of the mill.”

In response to the rising conflict, Mondi’s Board is considering all options for the Group’s interests, including legal separation.

The company has 5,300 employees in Russia.

Mondi added: “This does not mean, or imply, that Mondi is planning, or initiating, any liquidation or bankruptcy proceedings in relation to any of its Russian subsidiaries or assets.”

In Ukraine, the company operates one paper bag plant in Lviv, where it has 100 employees.

Operations at this facility have been temporarily suspended in response to the crisis.

Earlier this month, France-based glass container manufacturer Verallia suspended production at its facility in Zorya, Ukraine.

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