Packaging and paper group Mondi reported this past week (Friday Aug. 3, 2018) that the company would soon shut down production for one of its uncoated fine paper machines at its mill located at Merebank, Durban (South Africa). Currently, this shutdown is scheduled for the second half of the company's current financial year.

This particular decision could lead to job losses, but Mondi CEO Peter Oswald said that the final decision about a fate for the workforce was still under discussion. Mondi reportedly is considering absorbing affected employees into other areas within the business and the matter is yet to be finalized.

Oswald said the decision was defined by declining margins on unintegrated paper production following the rapid rise in hardwood pulp input costs. This had led to a net special item charge of EUR 18 million in the six months ended June 30. The machine was operating at 70,000 metric tpy production capacity.

Mondi said the EUR 18 million was made up of EUR 13 million in restructuring costs and EUR 5 million for impairment of assets.