Our Cartogal packaging plant located in the town of A Pobra do Caramiñal, in Galicia, Spain, will soon see an increase in size, production and storage capacity after a milestone investment of 11.35 million euros. The major investment and expansion plans aim to improve service to customers, as well as to open up new business opportunities in the northwest of Iberia. The project will add 6,000 square meters to the current 11,000 square meters, to see the packaging plant become an industry leader, operating at more than 17,000 square meters. During the seven months that the works are estimated to last, the construction and roofing of the new buildings will be carried out using sustainable and environmentally friendly materials.
The Mayr-Melnhof Group has reached an agreement that International Paper (Poland) Holding sp. zoo (“Kwidzyn”) from International Paper for around EUR 670 million (“debt and cash free”) and to assume additional liabilities of around EUR 33 million from usufructuary rights and operating leases according to IFRS. The acquisition of Kwidzyn is part of MM’s strategy to grow in the high-quality virgin fiber board (FBB) sector with innovative, sustainable and cost-effective qualities. The planned transaction will have an immediate impact on earnings.
At the integrated pulp and paper site in Poland, Kwidzyn operates a pulp mill with a capacity of around 400,000 t pa and four connected cardboard / paper machines: the core is an FBB board machine with a capacity of 260,000 t pa. In addition, Kwidzyn recently renovated a paper machine in entered the MF Kraft paper division to meet the growing demand for flexible paper packaging. The production on this machine is to be increased up to a capacity of 75,000 t pa. In addition, Kwidzyn operates two of the most attractive copy paper machines (UWF) in Europe with a total capacity of 410,000 t pa. Approx. 2,300 employees work in the plant. In 2020, an adjusted EBITDA of around EUR 92 million was achieved with sales of around EUR 510 million.
The purchase price is financed through committed credit lines from banks and the issuance of a promissory note loan. The transaction is subject to customary closing conditions. The transaction is expected to close in the third quarter of 2021.
Expansion of the competitive position of the MM Group vis-à-vis the two market leaders in the growing European FBB market through innovation of sustainable products and a broader range of services
Entry into the attractive business field of flexible paper packaging
Entry into the area of uncoated fine paper (UWF) through an established low-cost manufacturer
Use of the advantageous cost position for further growth in FBB or other packaging qualities
Use of synergy potential
MMag. Peter Oswald, CEO of the Mayr-Melnhof Group, comments: “The takeover of Kwidzyn is an ideal addition to our existing cardboard business. It enables MMK to drive innovations for more sustainable packaging solutions in the growing market for virgin fiber cardboard and also creates attractive new perspectives through the integration of pulp and paper at a European location with cost advantages. We have great confidence in the highly qualified team at Kwidzyn to shape a promising future together. “