Mondi well worth its paper

Robert Laing

Robert Laing

Cheap South African and Russian wood helped global paper maker Mondi post a 33percent leap in profit on 9percent higher revenue.

Half of Mondi's revenue came from its western European operations and less than 10percent from its South African operations in the year ended 31 December.

Though South Africa is no longer Mondi's major market, the low costs of operating forests here are a key ingredient of its high profitability.

"Our low-cost position is supported by our high level of vertical integration, being self-sufficient in wood, our primary raw material, in two of the lowest cost timber regions of the world," the results statement said.

Mondi switched from being a wholly-owned subsidiary of Anglo American into a separate London and Joburg-listed company in July. Its strategy of focusing on emerging markets and packaging seems to be working better than Sappi's focus on the US and fine paper.