Mondi Group will buy Egypt-based National Company for Paper Products and Import & Export (NPP) for €23.7m in a deal that further strengthens its position in the Middle East.
NPP is a privately owned industrial bags producer, operating one plant in Giza near Cairo and serving mostly regional customers. Mondi is highly acquisitive, and is a major industrial bags producer in the Middle East, operating four plants in the region.
“The acquisition of NPP complements our network of plants in the growing Middle East region and provides us with a leading position in Egypt to grow our business and better serve our customers”, Erik Bouts, CEO of fibre packaging at Mondi said.
For the year ended December 2017, NPP generated revenue of €29m and adjusted earnings before interest, tax, depreciation and amortisation of €5m. The deal with Mondi is expected to be concluded during the first half of 2018. Mondi’s main operations are in central Europe, Russia, North America and SA. The group had put in a “very robust” performance in the year to December 2017, pushing all major earnings indicators upwards amid a big capital expenditure programme. Revenue was €7.1bn in the year.
The best returns came from consumer packaging products including packaging for foods and animal nutrition, mainly sold in Europe but also the US, China and Thailand.
CEO Peter Oswald said that 2018 had started well for the group and 2019 promised more of the same. Three years of expansionary capital spending from 2017 of €750m would see further bottom-line benefits between 2019 and 2021, he said.
The group had targeted fast-growing emerging markets in Europe and further afield, including Turkey and Russia.
In a report on European pulp, paper and packaging, advisory firm Jefferies International said across the industry there was accelerating volume growth and price increases would support a positive 2018 outlook.
It said Mondi was a vertically integrated, low-cost producer with more than 50% of revenue derived from high growth emerging markets in Europe, SA and Russia.