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Paper and packaging is vital to SA economy

25 June 2012

The paper and packaging industry plays a vital role in stimulating growth in the local manufacturing sector, thereby contributing significantly to the South African economy as a whole. The industry is a key driver of employment, sustainability and food security.

“Paper and plastic packaging is almost always manufactured locally from raw materials such as wood or recovered paper and plastic polymers. Because the beneficiation of these products takes place in South Africa, it reduces the need to import finished products, contributing to local employment,” says Bruce Strong, CEO of Mpact, one of southern Africa’s largest paper and plastic packaging companies.

Mpact, which listed on the JSE on 11 July 2011, has the leading market position in corrugated packaging, recycled-based cartonboard and containerboard, recovered paper collection, PET preforms, styrene trays and plastic jumbo bins Strong adds that the South African economy is further stimulated by opportunities for beneficiation within the paper recycling industry.

As the largest paper recycler in South Africa, collecting over 450,000 tonnes of recovered paper annually, Mpact’s recycling business provides employment opportunities and environmental benefits. Recycling considerably decreases the reliance on virgin fibre in the production process, which indirectly reduces greenhouse gas emissions, and prevents the landfilling or incineration of this recycled paper. It also creates jobs in the industry. There are approximately 10 000 people currently involved in this business within South Africa.

“Many people are self-employed, having started their own enterprises where valuable raw materials are diverted from waste sites into a sustainable recycling process,” says Strong.

In terms of job sustainability in the paper and packaging industry, recycling also contributes to the development of SMMEs and Mpact Recycling has a model whereby over 40 entrepreneurial companies have been empowered to facilitate the company’s collection strategies. Mpact Recycling boasts seven of its own recycling operations in major centres around the country and 42 buy-back centres. It also supports 67 independent dealers throughout the country.

In addition to job creation in packaging and recycling, Mpact is an important contributor to the nation’s export industry.

“South Africa is a significant exporter of fruits, such as citrus, in the world. The packaging industry is vital to the export process because without effective protective packaging there would be substantial amounts of damaged produce reaching international destinations,” says Strong.

The industry also has a role to play in terms of food security. “While some consumers tend to dismiss packaging as an unnecessary burden, the sector plays a very important role in ensuring food security, particularly in developing countries.

“According to the Packaging Council of South Africa (PACSA), in less developed countries where the packaging and food processing industries are not as sophisticated, 40% percent of all produce never reaches the consumers in a state fit for consumption,” says Strong. “Packaging therefore plays a key role in food security and, consequently, in the long-term sustainability of food resources.”

While there is a debate around the overuse of packaging, products without protection would invariably be destroyed before getting to the market. However, the company has to consider more than just the protective quality of the packaging. Mpact is on a constant drive to reduce the packaging weight associated with its products, wherever possible.

“The immediate benefit is that less packaging is achieved to meet the same requirements for a product, and this ultimately results in less landfill and hence, less potential damage to the environment,” says Strong.

“Moreover, reducing the packaging weight, particularly in plastics packaging, is an important consideration as it reduces the cost of transport. This is particularly important in South Africa, where transport costs are considerable given not only the size of the country, but the sharp escalation of associated costs such as petrol and diesel, amongst others.”

Strong adds that the ongoing investment by Mpact in modern technology, plants, people and infrastructure provides continuous improvement to its products.

The company recently won the overall Gold Pack Trophy at the 2011 Institute of Packaging SA Gold Pack Awards for its RAPPET™187ml Burgundy wine bottle. The wine bottle received the award for the best overall packaged product with the bottle’s environmental benefits, significant cost saving and practical functionality. Mpact also received a Gold Pack Award for its Preform and Closure Light weightings for 500ml, 1-litre and 2-litre carbonated soft drinks products amongst others.

“A robust and growing packaging industry, with significant focus on sustainability efforts such as recycling and job creation, is certain to stimulate economic growth,” concludes Strong.

Notes to editors:

Mpact is a leading southern African paper and plastics packaging group with revenues of R6.2bn in 2011. Mpact employs 3,500 people at 29 sites, of which 22 are manufacturing sites. Mpact earns approximately 10% of its sales outside of South Africa. It also has plants in Mozambique, Namibia and Zimbabwe.

Mpact has the number one market position in corrugated packaging, recycled-based cartonboard and containerboard, recovered paper collection, PET preforms, styrene trays and plastic jumbo bins. These accounted for approximately 90% of its revenue in 2011.

Issued by:

FTI Consulting – Strategic Communications
Lianne Osterberger +27 (0) 11 214 2414 / +27 (0)83 27 27 313
Chloe Webb +27 (0) 11 214 2421 / +27 (0)83 305 0144

On behalf of:

Mpact Limited
Deborah Chapman
Communications Manager, Mpact +27 (0) 11 994 5500 / +27 (0)76 650 4155

Source: Mpact