Mondi is cutting its carbon footprint across the Americas with its purchase of an Alberta, Canada, pulp mill.
The U.K. sustainable packaging supplier finalized its acquisition of Hinton Pulp mill from West Fraser Timber Co. in February, totaling $5 million, the company says in a release. The transaction also includes a long-term partnership between the two companies, as West Fraser will provide access to local fiber from its established wood basket.
“We are delighted to be making this investment in Canada and look forward to working with Hinton colleagues, West Fraser as a long-term partner, and other local stakeholders toward improving the mill’s environmental footprint and securing its sustainable future,” Andrew King, Mondi Group CEO, said in the company’s first announcement of the purchase.
The plant currently has capacity to produce about 250,000 metric tons of pulp annually, but Mondi is planning further investment to improve sustainability and performance. That includes a potential purchase of a new kraft paper machine, which would produce 200,000 metric tons of kraft paper annually.
The investment plans, subject to pre-engineering and permitting, would cost €400 million ($432.7 million) and could be operational as soon as Q3 2027, Mondi said in its announcement.
Shortening the supply chain
Mondi’s purchase of the mill and potential kraft paper machine investment integrate its paper bag operations in the Americas and secure a reliable supply of kraft paper for its network of 10 paper bag plants in the region.
The integration will provide a shorter supply chain and smaller carbon footprint for customers, compared to the previous method of importing materials for Mondi’s packaging products.
“Strategically, we are focused on investing to support the growing market demand for our sustainable packaging products, while delivering attractive mid-teen returns through cycle,” King said. “The acquisition of [the Hinton mill] 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.”
Supporting the town of Hinton
The 10,000-resident town of Hinton welcomes the acquisition to continue operations of the mill, Hinton Mayor Nicholas Nissen said at a launch event, as reported by CBC.
“The mill, everyone can tell, was coming up at the end of its life,” Nissen said, according to CBC. “It breathes new life both into the mill, [and] into our town. It’s a great long-term commitment for both us and Mondi.”
The mill also supports Hinton through treatment of civic water and wastewater, and that partnership will continue after the town and Mondi signed 20-year agreements with the company, CBC says. Mondi will continue to treat Hinton’s wastewater and send the town its process water to treat for drinking.
