Additionally, Mondi plans to invest €400m in the development of Hinton, subject to pre-engineering and permitting for a new 200,000 tonnes per year kraft paper machine
UK-based packaging and paper company Mondi has agreed to acquire the Hinton Pulp mill in Alberta, Canada from West Fraser Timber for a total consideration of $5m.
As part of the deal, Mondi will also sign a long-term partnership with West Fraser to access local, high-quality fibre from a well-established wood basket in Canada.
The acquisition of the unbleached softwood kraft pulp mill in Hinton is expected to boost Mondi’s Americas paper bags business.
Mondi plans to invest €400m in the development of Hinton, subject to pre-engineering and permitting. The funds will be used for a new 200,000 tonnes per year kraft paper machine that is scheduled to be operational in the second half of 2027.
By purchasing the mill and investing in the paper machine, the packaging firm will fully integrate operations in the Americas and secure the long-term supply of cost-effective kraft paper into its network of 10 paper bag plants in the area.
This will position the firm to meet the growing demand for industrial and mailer bags.
West Fraser president & CEO Ray Ferris said: “This transaction creates a sustainable long-term future for the pulp mill, while maintaining the integrated fibre supply chain in place with West Fraser’s operations in the region.
“The relationship with Mondi puts the Hinton pulp mill in the hands of a global industry leader, with the vision and experience to maximise opportunities for local employees and the community.”
According to Mondi, the carbon footprint of the firm’s packaging products in the area will be reduced due to a completely integrated and significantly shorter supply chain.
Additionally, the kraft paper produced at Hinton will have the highest quality and strength parameters to satisfy customer demands for sustainable packaging solutions, the packaging company claimed.
Mondi Group CEO Andrew King said: “The acquisition of Hinton is an excellent opportunity for us to secure locally produced kraft paper for our bags customers, helping to meet the current and anticipated future growth in demand for industrial and mailer bags in the Americas.
“This acquisition will also enable us to further strengthen our position as the global market leader in the production of kraft paper and paper bags.”
The deal is subject to customary regulatory clearance and is anticipated to conclude at the end of this year.