Only factory of its kind in South Africa closing for good, taking hundreds of jobs with it
JSE-listed packaging giant Mpact is shutting down its Springs mill, with a Section 189A process placing over 300 jobs at risk.
In its latest financial results for 2025, Mpact said the discontinuation of the Springs mill is likely to occur once all open orders have been completed.
The paper mill is thus expected to run until the end of May 2026. The mill currently employs 377 people.
The board of directors approved the retrenchment process in February 2026 following the sustained deterioration in the mill’s competitiveness.
The mill is the only domestic producer of cartonboard and competes directly with importers from several other countries.
Due to the large overcapacity in the global cartonboard market and the value of the rand, the mill’s largest customers can import cartonboard at prices about 20% below the Mill’s cost of production.
This led to a decline in the mill’s output, with its largest customer notifying the mill in January 2026 that it would no longer procure its cartonboard requirements from the mill and would instead use imports.
“Despite extensive efforts, Mpact is unable to bridge the cost gap and is unlikely to secure sufficient demand from other customers at sustainable prices,” it previously said.
For the 2025 financial year, Springs Mill recognised revenue amounting to R1,753.3 million (2024: R1,739.5 million) and an operating profit of R2.0 million (2024: R32.1 million).
The group’s management will continue to evaluate the full financial and operational implications of the mill’s closure.
Financial results
“2025 was a demanding year, marked by sustained economic pressure and difficult trading conditions across several of our markets,” said Bruce Strong, Mpact’s Chief Executive Officer.
“While overall performance was mixed, we made progress in strengthening Mpact’s strategic position through disciplined capital investment, portfolio optimisation and operational improvements.”
With most of its investment cycle finished, the group is shifting its focus to converting the asset base into stronger earnings, cash generation and improved returns.
Strong said that portfolio actions, capital discipline and operational efficiency are intended to strengthen the balance sheet and support sustainable shareholder returns.
During 2025, the group said that a weak domestic economy, persistent infrastructure constraints and elevated geopolitical uncertainty characterised macroeconomic conditions.
As noted, the global oversupply of containerboard and cartonboard led to lower margins and intensified competition from importers.
“These headwinds were offset by robust growth in the fruit sector and improved efficiencies
across most of Mpact’s businesses,” said the group.
“Record citrus export volumes in 2025 reinforced the structural attractiveness of this market and validated the group’s strategic focus on investing in export-oriented growth sectors.”
The group’s financials showed that net asset value per share increased by 6% to R37.76 from December 2024, while revenue was up 5% to R14 billion.
Headline earnings per share did, however, decline to 307 cents (2024: 324 cents). The group’s total dividend per share was 60 cents.
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