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Mpact's Felixton Mill unveiled

26 January 2016

KZN MEC for Economic Development, Tourism & Environmental Affairs, officially opens Phase 1 of Mpact's Felixton Mill upgrade

Today KwaZulu-Natal (KZN) MEC for Economic Development, Tourism & Environmental Affairs, Mr. Michael Mabuyakhulu unveiled Phase 1 of Mpact's Felixton Mill R765 million expansion. The upgrade of the paper mill will enhance itsproduct offering, enabling it to produce advance lightweight containerboard to cater for the increasing demand for packaging weight reduction.

Commenting on the project, Mpact CEO Mr Bruce Strong said; "Capital investment across the Group is critical for us to take advantage of growth prospects in our markets. In the case of the Felixton Mill, the upgrade will increase capacity by 60,000 tonnes to 215,000 tonnes. Notably, the significant investmentin the latest paper machine technology and machinery will improve the quality of our paper products; enhance operational efficiencies and the mill's overall competitiveness in line with global trends.On completion of the project, the mill will no longer utilise bagasse fibre in its products, moving towards fully recycled fibre usage. Environmental benefits of the upgrade also include significant specific reductions in CO2, and the usage of energy, water, and solid waste.

The Felixton Mill's upgrade is also expected to contribute to job creation through increased collections of waste paper which will be required by the mill.

Speaking at the unveiling ceremony, MEC. Mabuyakhulu said the Felixton Mill upgrade augured well for the province's plans of using infrastructure projects as a tool for skills transfer and job creation. "It is our view that whatever occurs in the province of KwaZulu-Natal needs to be connected to our to broader strategy of undermining inequality, poverty and unemployment and we believe that this R765 million upgrade to Felixton Mill's operations will create some much needed job opportunities in the province as well as contribute to a skills transfer to local communities.

As part of the Felixton Mill upgrade, Mpact secured an 8-year structured loan facility of R200 million with the KZN Growth Fund.

KZN Growth Fund CEO, Mr. Siddiq Adam said: "This is a landmark transaction for the KZN Growth Fund and the province. The Fund's aim is to invest and support sustainable growth projects in the private sector that stimulate job creation, promote B-BBEE and reduce inequality. We are particularly pleased with Mpact's progress in priority focus areas of B-BBEE and the creation of job opportunities. The investment into the Felixton Mill upgrade demonstrates our confidence in a partnership with Mpact in meeting the province's developmental goals. 

Situated near Empangeni, Felixton Mill was established in 1953. The mill produces containerboard for local and export corrugated markets utilising waste paper and bagasse, a fibre residue of sugar cane, as primary raw materials. In June 2015, Felixton Mill successfully commissioned Phase 1 of the upgrade, with the completion of a new state-of-the-art recycled fibre (RCF) plant and an upgrade to the paper machine.

The second and final phase of the upgrade is on schedule to be commissioned in 2017.

Notes to editors

About Mpact

Listed on the JSE Mpact, is a leading manufacturer of paper and plastics packaging in southern Africa. The Paper business is integrated across the recycled paper-based corrugated and converted paper products packaging value chain, comprising three divisions: Recycling, Paper manufacturing, and Corrugated and Converted Paper Products.

The Plastics business manufactures rigid plastic packaging for the food, beverage, personal care, home care, pharmaceutical, agricultural, and retail markets. Products include PET preforms, bottles and jars; plastic jumbo bins, wheelie bins, pallets and crates; plastic containers for the Fast Moving Consumer Goods (FMCG) market; styrene and PET trays, fast food containers and clear plastic films.

Mpact employs 4,366 people across its 33 operations in South Africa, Botswana, Namibia, Mozambique and Zimbabwe.

About KZN Growth Fund

The KZN Growth Fund Trust ("KGF") is a uniquely structured public entity that finances private financial initiatives that are dedicated to sustainable business in South Africa. The KGFT is aligned to the province's economic and social mandate of driving growth and is driven by the success of the KwaZulu-Natal region and its people.

The KGFT is unique in the world of finance in the way it supports and funds projects; acting in a highly entrepreneurial capacity, taking on high risk projects either in its private equity fund (since the 1st April 2015) or through issuing custom debt financing solutions for its clients. These flexible finance solutions position the KGFT as one of the most innovative project funding initiatives nationally.

Issued by:       PR Worx

                        Chantel Riley

                        Tel: +27 (0) 11 896 1818 / +27 (0) 82 771 7441

                        Email: chantal@prworx.co.za

 

On behalf of:    Mpact Limited

                        Nthabiseng Chapeshamano, Group Communications Manager

                        Tel: +27 (0) 994 5500

                        Email: nchapeshamano@mpact.co.za

Source: MPACT