Mpact considers Springs mill closure amid import competition

Mpact said global oversupply in the cartonboard market, combined with a strong rand, has undermined the viability of its local production. Customers are now able to import cartonboard at prices about 20% below the Springs mill’s cost of production, a gap the company said it cannot close.

Pressure escalated in January 2026, when the mill’s largest customer informed Mpact that it would stop procuring cartonboard locally and would instead rely on imports. Mpact said it has explored options to address the cost disadvantage but has been unable to secure sufficient alternative demand at prices that would support continued operation.

As a result, the company is considering discontinuing production at the Springs paper mill, South Africa’s only domestic producer of cartonboard. Subject to consultation and the review of alternatives, production is likely to stop once existing orders have been completed. On current timelines, operations are expected to continue until around the end of March 2026.

Retrenchment process and manufacturing impact

Mpact confirmed that its board has approved a Section 189A retrenchment process, which could affect approximately 377 employees. The group employs more than 4,557 people across southern Africa. The retrenchment process remains subject to consultation with affected employees and stakeholders.

Mpact was established in 2011 following a demerger from Mondi, although its industrial operations date back to 1877. The potential closure adds to a growing list of manufacturing operations that have reduced output or shifted to imports as pricing pressure intensifies.