Paper and plastic packaging group Mpact has announced plans to shut down its Springs Paper Mill, a move that could leave 377 workers without jobs next month.
The company said in a statement on Monday that its board approved the start of a formal consultation process under Section 189A of the Labour Relations Act.
Mpact is the biggest paper and plastics packaging and recycling business in the country and operates across 38 sites, including 21 manufacturing sites and 14 recycling operations.
The planned closure comes despite the mill still generating revenue. In the year to December 2024, the Springs operation recorded revenue of R1.74-billion and an operating profit before tax of R32-million.
The mill has plant and equipment valued at R186-million, as well as significant assets. However, Mpact said these figures do not reflect the worsening market conditions and the loss of key customers.
The Springs Paper Mill, which is the only producer of cartonboard in the country, is facing pressure from imported products.
Customers moving to imported goods
Mpact said a global oversupply of cartonboard has pushed prices down and that the strong rand against the US dollar has made imports cheaper.
According to the company, it is losing customers to imported cartonboard and believes the January 2026 results show customers’ intent to permanently move towards imported goods.
Finding new customers has not been easy and Mpact believes it cannot close the price gap or secure enough demand at sustainable prices.
If no viable alternatives are found during the consultation process, production at the Springs Paper Mill is expected to stop once all existing orders are completed. The mill is likely to run only until the end of March.
“The information contained in this announcement has not been reviewed or reported on by Mpact’s independent external auditors.
“Further announcements may be made, as appropriate, regarding the outcome of the Section 189A process and the discontinuation of the mill’s operations,” the company said in a statement.
