Mpact declares force majeure at Springs mill amid municipal power outage

16th September 2020 By: Simone Liedtke - Writer

Paper and packaging producer Mpact has declared force majeure at its Springs paper mill in relation to a near-month-long power interruption, which left it unable to produce.

The mill has been without electricity supply from 18:00 on August 19, when an explosion and fire at the municipal substation in Ekurhuleni occurred.

The company says it was initially advised by the Ekurhuleni municipality that electricity supply would be restored to the mill by no later than September 7, but this has not happened.

Based on the latest indications from the municipality, Mpact says it is anticipated that electricity supply could be restored to the mill by the end of this week. However, given the delays to date, and given the unforeseen additional delays experienced by the municipality in restoring the substation, the company has declared force majeure in relation to the power interruption.

While the power interruption is an insurable event in terms of the company’s insurance policy, any impact on the group’s earnings remains uncertain.

The mill produces coated white top carton board used for packaging foodstuffs, and specialty core board used for toilet rolls, paper reels and cling wrap rolls, besides others.

The mill has a production capacity of about 140 000 t/y and its total revenue in 2019 was about R1.3-billion.