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JSE-listed paper and packaging group Mondi has entered into consultations with staff and unions at its Merebank site in South Africa, regarding the proposed mothballing of its PM32 paper machine as well as the reorganisation of its newsprint and paper production operations.
The mothballing of the PM32 machine, which represented a capacity reduction of around 120 000 t/y, was in response to a strong decline in sales margins and low market prices in the fine paper business and a reduction in international selling prices of Newsprint, Mondi said on Wednesday.
The remaining two fine paper machines, PM31 and PM33, have sufficient capacity to meet market demand in the current conditions, the company stated.
Mondi said that some 240 employees might be affected by its organisational alignment, which represented around 4,1% of Mondi’s permanent employee complement in South Africa.
The company reported that it would offer support to employees, in addition to severance packages, subject to consultation with staff and their representatives.
