Sunday, August 14, 2022

Mondi, which owns Russia’s largest paper producer, plummets

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Shares in the JSE-listed packaging and paper producer Mondi have been hit hard as the market digested the impact of the Ukraine crisis on its business.

Mondi owns the largest Russian paper producer, Mondi Syktyvkar, and earns around 12% of its revenue from that country.

It has a paper and uncoated fine paper mill located in Russia’s Komi republic, which employs around 4 500 employees.

In a statement on Monday, Mondi said that its Russian businesses are all currently operational.

However, operations at the company’s paper bag plant in Lviv, Ukraine have been suspended. The plant employs 100 people.

Following its invasion of Ukraine last week, Russia has been hit with sanctions from Western countries as well as South Korea and Singapore. Some Russian banks have also been cut off from the SWIFT financial network, while companies, including BP, have announced that they will divest from Russia.

“Mondi continues to closely monitor the situation in Ukraine, the response of international governments and any potential impact on the group,” the company said on Monday.

By late afternoon, its share price was down 9% to R329.94.

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