Mondi to continue with production downtime

International packaging and paper firm Mondi Group will continue to take production downtime where appropriate in response to demand weakness in some product areas.
 
In an interim management statement released on Monday October 31, updating its performance and financial position since the end of the first half on June 30 based on management accounts up to September 30 and estimated results for October, Mondi Group said broader macroeconomic weakness is giving rise to some slowdown in demand and moderate pricing pressure across certain of the Group’s product areas.
 
Downtime has already occurred in its Bags & Coatings business, where some weakness in demand, due to a combination of mildly weaker end user demand resulting from the European macroeconomic slowdown and destocking in the value chain, led to lower kraft paper sales volumes. Flexibility will be retained to bring this capacity back on stream, it said, as the destocking process comes to an end. Export demand for kraft paper is reported as good with sale prices generally stable through the third quarter.
 
The Group statement read: ‘In large part, the current demand weakness would appear to be driven by destocking, making predictions on near-term underlying demand trends difficult. We will continue to respond decisively by taking production downtime where appropriate. Supply side fundamentals for the Group’s core grades remain good. Furthermore, the Group’s robust financial position, low-cost operating model and focus on performance leaves the Group well-positioned to deliver strong returns through the business cycle.’
 
Click here to read the full Mondi Group interim management statement.