Packaging and paper group Mondi is raising prices and shutting multiple plants as escalating costs linked to geopolitical tensions in the Middle East weigh on its business.
The company says rising energy, raw material and logistics costs have eroded profitability, forcing both price increases and operational cuts.
Plants shut as 450 jobs affected
Mondi has announced the closure of three facilities: a consumer flexibles plant in Hungary and two corrugated packaging plants in Poland and Germany.
Around 450 employees will be affected during the year. This brings the total number of recently announced plant closures to six.
The measures are part of an effort to adapt production capacity to weaker market conditions while tightening cost control.
Margins under pressure despite higher volumes
In the first quarter of 2026, Mondi reported underlying EBITDA of €212 million. This represents a slight decline compared with the previous quarter, despite increased sales volumes.
The volume growth was offset by lower average selling prices and rising input costs, particularly energy-related costs towards the end of the quarter.
Within converting operations, margins were squeezed in both corrugated solutions and paper bags. The consumer flexibles segment delivered a broadly stable performance, supported by relatively resilient end markets.
Price hikes to take effect later
Mondi expects its pricing actions to take full effect in the third quarter due to a natural delay in passing on higher costs.
– Against a backdrop of challenging market conditions, sales volumes increased, although lower selling prices and cost pressures linked to escalating geopolitical tensions weighed on underlying EBITDA, said CEO Andrew King in the company’s report.
He added that cost pressures are expected to persist into the second quarter.
– We are taking pricing actions to mitigate their impact. While there is an inherent time lag, we expect these measures to take full effect in the third quarter, he said.
The company also emphasised its focus on cost discipline, operational efficiency and cash flow management as it navigates continued uncertainty.
Future performance will largely depend on how energy prices and geopolitical tensions develop – factors that remain outside the company’s control.
Source: Mondi
Fact check:
Mondi is a global packaging and paper company operating in multiple markets. Its performance is highly sensitive to energy prices and raw material costs.
