Mondi reinforces packaging and paper focus with Personal Care Components sale

18 Feb 2022 --- Mondi has agreed to sell its Personal Care Components business (PCC) to Japanese company Nitto Denko for an enterprise value of €615 million (US$698 million).

The multinational packaging and paper group says it will focus on growing its packaging segment. PCC’s limited overlap with the rest of its business led the company to conclude that the next phase of the business’ development will be better undertaken outside of the group. 

Speaking to PackagingInsights, Kerry Cooper, Mondi’s head of external communication, explains: “Simplifying our portfolio will enable us to focus on our core packaging and paper businesses and enhance our ability to pursue our strategic priority to grow in environmentally sustainable packaging. The proceeds received for the transaction will be used for general corporate purposes in line with our capital allocation policy.” 

“The PCC business manufactures a range of components for personal and home care products needed in everyday life such as diapers, feminine care, adult incontinence and wipes. Mondi’s strategic focus is to grow in packaging.” 

Nitto’s acquisition 
PCC, part of Mondi’s Engineered Materials business unit, manufactures a range of components for personal and home care products for everyday life such as diapers, feminine care, adult incontinence, wipes and face masks. For the financial year of 2020, PCC generated an underlying EBITDA of €42 million (US$47.7 million). The PCC sale will allow Mondi to strenghten its focus on packaging development.

Nitto is a 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. The company’s acquisition of PCC is aligned with its stated mid-term management plan, “Nitto Beyond 2023,” which targets growth in the field of human life.

Future mergers 
Following the planned transaction completion, the remaining portion of Engineered Materials – namely Functional Papers and Films – will be merged into Mondi’s Flexible Packaging business unit. 

This restructuring will strengthen integration along the kraft paper value chain and foster innovation to continue developing functional papers with the necessary barriers to meet increasing customer demand for environmentally sustainable packaging, says the company. 

Mondi Group CEO, Andrew King, reiterates: “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 [environmentally] sustainable packaging.” Mondi recently acquired corrugated packaging facilities in Turkey.

Mondi’s recent moves 
The sell-off follows a series of developments by Mondi this year, including helping customers switch to heavy-duty (HD) corrugated packaging through acquisitions of Turkish production plants. HD corrugated packaging can be used to ship a variety of large or heavy industrial goods and consumer durables safely, efficiently and with increased environmental sustainability.

As one of the largest producers of HD corrugated packaging in Europe, Mondi’s team helps customers design tailor-made solutions that are fully recyclable.

Recently, Mondi received the Cradle to Cradle certification at Bronze level for its uncoated fine papers produced in its mills in Austria, Slovakia and Russia. The company is the first to offer an extensive uncoated fine paper portfolio as Cradle to Cradle-certified, meeting the high standards and demanding requirements of this certification scheme, which marks the step from a linear to a circular economy.

By Louis Gore-Langton