Mondi secures €66M acquisition of Turkish corrugated packaging leader from International Paper

05 Jan 2021 --- Mondi is acquiring Olmuksan, a leading Turkish corrugated packaging producer, from International Paper. The acquisition expands Mondi’s presence in the region, generating operational improvements and paper integration upside.

Mondi agreed to acquire 90.38 percent of the outstanding shares in Olmuksan International Paper Ambalaj Sanayi ve Ticaret (Olmuksan) from International Paper for a total consideration of €66 million (US$81 million). The implied enterprise value on a 100 percent basis would amount to around €88 million (US$108 million).

Olmuksan is a well-established corrugated packaging player in Turkey, listed on the Istanbul stock exchange. Its network of five plants provides a diverse customer base with high-quality eco-friendly packaging for food, beverage, agriculture and industrial applications.

For the twelve months ended 30 September 2020, Olmuksan produced 256 thousand tons of corrugated packaging and generated revenues of TRY1,093 million (US$184 million).

International Paper says the Olmuksan sale is in line with its strategy to “serve markets from an advantaged position.” The global producer of renewable fiber-based packaging confirms corrugated packaging will remain one of its strategic businesses in EMEA.

Expanded Turkish presence
Mondi has operated successfully in Turkey for many years and developed a strong understanding of the market and its long-term opportunities, the company highlights.

Mondi will acquire 90.38% of Olmuksan’s outstanding shares from International Paper for €66M (US$81M).The global packaging giant’s current Turkish footprint includes four corrugated packaging plants and a recycled containerboard paper mill, as well as three flexible packaging sites.

Mondi expects to generate significant operational improvements and paper integration upside by leveraging its expertise and experience in this market, together with its global virgin and recycled containerboard portfolio.

“We are excited by this unique opportunity to significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering to existing and new customers in the region,” comments Andrew King, Mondi Group CEO.

The transaction remains subject to competition clearance and other closing conditions and is expected to complete in the first half of 2021.

After completing the transaction, Mondi will launch a mandatory tender offer to acquire the remaining 9.62 percent of Olmuksan’s outstanding shares held by minority shareholders.

Mondi in the news
Mondi recently launched a paper EcoWicketBag for Drylock Technologies’ baby diaper ranges, bringing sustainable paper-based packaging to the global hygiene market.

Drylock Technologies approached Mondi to create a more sustainable alternative to its existing plastic diaper packaging. The company required a solution that would travel well, have strong shelf-appeal, and protect the product, while also using renewable resources and significantly reducing its CO2 footprint.Mondi recently revealed a paper EcoWicketBag for Drylock Technologies’ baby diaper ranges.

“We approached Mondi because of its expertise in paper packaging and extensive knowledge of the global hygiene market. Consumers are looking for more sustainable packaging that is kinder to the planet without compromising the product’s integrity. With the EcoWicketBag, consumers can be confident of product quality and packaging sustainability,” says Werner Van Ingelgem, R&D director at Drylock Technologies.

A key advantage of using paper-based solutions is the recyclability of paper and consumers being more aware of how to dispose of it correctly, Mondi says.

The EcoWicketBag can be placed in existing paper streams, including countries with the strictest recycling regulations, thereby supporting the circular economy. An EcoWicketBag made out of fully compostable materials is also available.

Mondi also ensured EcoWicketBag fits with Drylock Technologies’ existing plant processes, meaning it is the first paper wicket bag range that can be filled and sealed on existing machines.

“We work closely with our clients using our customer-centric EcoSolutions approach to create packaging that is fit for purpose – using paper where possible, plastic when useful,” notes Claudio Fedalto, chief operating officer paper bags at Mondi.

“With Drylock Technologies it was key to reduce the amount of plastic used, meet our customer’s sustainability targets and protect the products for consumers. By liaising closely and asking the right questions from the outset, we have been able to deliver on all of the above.”

By Joshua Poole