Mondi to divest its personal care components business

Mondi’s strategic focus to grow in packaging

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Mondi
Mondi to divest its Personal Care Components business. Photo Mondi

Mondi plc is pleased to announce that it has agreed to sell its personal care components business (‘PCC’) to Nitto Denko Corporation (‘Nitto’). For an enterprise value of €615 million (approximately Rs 5246 crore), the approximate cash consideration is payable to Mondi at completion (the ‘Transaction’).

Mondi’s strategic focus to grow in packaging and the limited overlap of PCC with the rest of its business has led Mondi to conclude that the next phase of PCC’s development will be better undertaken outside of the Group.

PCC, part of the Group’s Engineered Materials business unit, manufactures a range of components for personal and home care products needed in everyday life such as diapers, feminine care, adult incontinence and wipes. For the financial year to 31 December 2020, PCC generated an underlying EBITDA of €42 million (approximately Rs 358 crore).

Nitto is a leading global manufacturer of high functional materials for electronics, mobilities and human life applications following its ‘Global Niche Top Strategy’, headquartered in Japan and listed on the Tokyo Stock Exchange. Nitto’s acquisition of PCC is aligned with its stated mid-term management plan, ‘Nitto Beyond 2023’, targeting growth in the field of human life.

Following the planned completion of the transaction, the remaining portion of Engineered Materials, namely functional papers and films, will be merged into the flexible packaging business unit. This will strengthen the kraft paper value chain and foster innovation to continue developing functional papers with the necessary barriers to meet increasing customer demand for sustainable packaging.

“We are pleased to have agreed to the sale of PCC to Nitto, knowing they will be great owners of the business. By simplifying our portfolio, the transaction will enable us to focus on our core packaging and paper businesses and enhance our ability to pursue our strategic priority to grow in sustainable packaging. We remain excited by our opportunity to further serve our customers with innovative solutions that are sustainable by design,” Mondi Group chief executive officer, Andrew King.

The Transaction is subject to competition clearance and other customary closing conditions, with completion expected in the second half of 2022. The proceeds received from the Transaction will be used for general corporate purposes in line with the Group’s capital allocation policy.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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