Strategy
Mondi’s strategic positioning demonstrates the required combination of focus and flexibility to deliver results across the business cycle as we:
- build on leading positions in packaging and UFP, particularly in high-growth emerging markets;
- maintain our low-cost, high-quality asset base by selectively investing in production capacity in lower-cost regions and realising benefits of upstream integration (including forestry); and
- focus on performance through continuous productivity improvement and cost reduction, delivered through business excellence programmes and rigorous asset management.
For a more detailed review of the Group’s strategy, please refer to the chief executive’s review in the integrated annual report and accounts 2011.
Leading market positions
Mondi continues to focus on achieving the right product and geographic mix in order to promote sustained profitability. The Group benefits from exposure to faster growing emerging markets such as Eastern Europe, Russia and South Africa, with 71% of the Group’s net operating assets and 50% of revenue by destination based in these geographical areas.
Our bias towards emerging markets is in line with our vision of focusing on low-cost, high-growth regions and on businesses offering leading market positions and operational synergies with existing businesses. While our strategy clearly focuses on emerging markets, Mondi continues to enjoy a uniquely strong market position in the Bags & Coatings business in both Eastern and Western Europe, where the coatings and consumer packaging segment enjoys very attractive growth rates and returns. We will therefore continue to support our market position in Bags & Coatings with our existing Western European assets.
High-quality, low-cost asset base
Over the past 10 years, Mondi has invested more than €4.5 billion in its high-quality, low-cost asset base and our state-of-the-art operations are delivering superior returns across the cycle.
Mondi’s UFP business is reaping the rewards of its integrated low-cost positioning, while the recently restructured Corrugated business delivered strong results. The Bags & Coatings business enjoys good, and in many cases leading, market shares in its key markets.
The Group has approved certain energy related investments across a number of its operations, including a bark boiler in Syktyvkar; a steam turbine in Stambolijski; a new recovery boiler in Frantschach; and a steam turbine in Richards Bay. The focus of these and other projects still under consideration is to improve energy efficiency and self-sufficiency whilst providing opportunities to capture additional benefits in the form of electricity sales.
Focus on performance
Our relentless focus on cost containment ensured that the Group’s fixed cost increases remain within inflation in the countries within which we operate. Ongoing initiatives are directed towards ensuring efficient procurement of our most critical raw materials and operational efficiency. The energy related projects mentioned above will also provide benefits through a reduction of procured energy. Our working capital levels are well contained within the Group’s target of 10-12% of turnover, benefiting from our ability to manage inventory actively amid changing market conditions.
Last change: 22.03.2012