South African paper and plastics manufacturer, MPact said its board had approved a Section 189A retrenchment process, which could affect around 377 employees.
MPact is the largest paper and plastics packaging and recycling business in southern Africa, employing over 4,557 people across the region.
Business Tech reports that the potential closure centres on the Springs paper mill, the country’s only domestic producer of cartonboard. The operation has struggled to compete amid global oversupply and a strong rand, which has made imports considerably cheaper.
Pressure intensified in January 2026, when the mill’s largest customer notified MPact it would no longer procure locally and would instead rely on imports. “Despite extensive efforts, MPact is unable to bridge the cost gap and unlikely to secure sufficient demand from other customers at sustainable prices,” the company said, adding that these conditions are expected to persist.
As a result, MPact is considering shutting down the mill due to the sustained deterioration in competitiveness. “Subject to the consideration of alternatives, production at the Springs Mill is likely to discontinue once all open orders have been completed,” it said.
Cheaper imports expose manufacturing pressures
The situation deteriorated further in January 2026, when the mill’s largest customer notified the company that it would no longer procure its cartonboard locally, opting instead for imported supply.
As a result, the company is considering discontinuing production at the Springs mill once existing orders have been completed. Based on current information, operations are expected to continue until around the end of March 2026, subject to the outcome of consultations and the consideration of alternatives.
Although the group was established in 2011 following a demerger from Mondi, its industrial roots stretch back to 1877, when a small cabinet-making business was founded in Port Elizabeth. That legacy underscores the broader significance of the potential shutdown.
The developments reflect South Africa’s uneven economic picture. While improved electricity availability, infrastructure reform, and stabilising macroeconomic conditions have supported recovery in parts of the economy, manufacturing continues to face high input costs, weak demand, and rising import competition.
These pressures come as South Africa navigates complex trade relationships, including ongoing uncertainty around access to the US market, leaving local producers increasingly exposed to global pricing dynamics
