The board of paper and plastic packaging producer and recycler Mpact has given the go-ahead for a R1.2-billion investment project at its Mkhondo paper mill, in Mpumalanga.

Mpact will invest in improvements to the mill’s paper machine, increasing its capacity by about 10 000 t/y to 142 000 t/y.

Upgrades will also be made to the pulping section, which will increase the wood pulping capacity by about 55 000 t/y to 110 000 t/y. This will enable the migration to a higher proportion of Bayplex production, with improved properties, enhancing Mpact’s ability to meet growing customer demand.

The project is aimed at ensuring the mill is able to meet the increasing demand for quality, sustainable, fresh produce packaging solutions, driven by robust growth in the South African export fruit sector.

“Repositioned to become a predominantly virgin fibre mill, with an enhanced and flexible product range, the Mkhondo mill will benefit from improved cost competitiveness and reduced environmental footprint, while enabling it to respond to the strong domestic and international demand for high-quality semi-chemical (SC) fluting,” Mpact points out.

Mpact’s SC fluting, which is marketed under the brand name Bayplex, is a high-performance virgin containerboard grade produced at the mill. Bayplex is needed to produce corrugated cartons for demanding cold-chain applications owing to its high strength, moisture resistance and durability. It is widely used in fresh fruit, other agricultural exports, and specialised applications.

“Our R1.2-billion investment in the Mkhondo mill demonstrates our strong belief in the growth prospects of particularly our fruit exporters who need our containerboard, and Mpact’s successful investment and project management record.

“What’s exciting is that the improved mill also gives us the technical flexibility to expand into new markets by producing pulp by-products for the industrial market such as the sodium lignosulfonate (SLS) powder, most of which we will sell into the export market,” comments Mpact chairperson Tony Phillips.

As part of the project, Mpact will install a new spray drying facility to beneficiate the additional by-product generated from the wood pulping process. This will enable the mill to produce up to 35 000 t/y of SLS powder, which is used as a concrete additive in the construction industry, besides other applications.

The upgrades are scheduled to be concluded during the first half of 2025 and the project is expected to generate an internal rate of return in excess of 20%.

Mpact will fund the project from borrowings.