South Africa’s only Cartonboard mill to shut down: Mpact Springs plant closure puts 377 jobs at risk
Mpact Springs cartonboard mill set to close by May 2026
South Africa’s only domestic cartonboard producer, the Mpact Springs mill, is set to shut down permanently by May 2026, placing 377 jobs at risk and marking a significant moment for the country’s manufacturing sector.
The decision was confirmed by Mpact Limited, a Johannesburg Stock Exchange–listed packaging company, as part of its 2025 financial results announcement. According to the company, the closure follows years of declining competitiveness and increasing pressure from cheaper imported products.
A formal Section 189A retrenchment process, the legal procedure used in South Africa for large-scale layoffs, has already begun, signalling the possibility of hundreds of job losses at the facility.
The mill will continue operating only long enough to complete existing orders, after which operations will cease permanently.
Why the Mpact Springs Mill Is Closing
The Springs mill, located in Gauteng, is unique in South Africa as the only domestic manufacturer of cartonboard, a paper-based packaging material widely used in industries such as food, retail, and consumer goods.
However, Mpact says the mill has struggled to remain competitive due to significant global overcapacity in the cartonboard market.
International producers have been able to export cartonboard to South Africa at prices up to 20% cheaper than the Springs mill’s cost of production, largely due to economies of scale and favourable currency dynamics.
The situation worsened earlier this year when the mill’s largest customer announced it would stop purchasing locally produced cartonboard and switch to imported alternatives.
This decision dramatically reduced demand for the mill’s output, leaving Mpact unable to sustain the facility financially.
Hundreds of Jobs at Risk in Retrenchment Process
The closure will have a direct impact on 377 employees currently working at the Springs facility.
Mpact’s board approved the retrenchment process in February 2026, citing the “sustained deterioration in the mill’s competitiveness” as the main reason behind the decision.
The company stated that extensive efforts were made to keep the mill operational, but management was ultimately unable to close the cost gap with international suppliers or secure enough new customers to maintain sustainable production levels.
Labour unions and workers are expected to participate in consultations as part of the Section 189A process, which aims to explore possible alternatives to job losses where feasible.
Financial Performance of the Springs Mill
Despite generating substantial revenue, the Springs mill has struggled to remain profitable.
According to Mpact’s financial results:
- Revenue for 2025: R1.753 billion
- Revenue for 2024: R1.739 billion
- Operating profit for 2025: R2 million
- Operating profit for 2024: R32.1 million
The sharp drop in operating profit highlights the mounting financial pressure on the facility, even as revenue remained relatively stable.
Company executives say these figures illustrate how thin margins and rising competition have undermined the mill’s long-term viability.
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Mpact Reports Stronger Overall Revenue Despite Closure
Interestingly, the closure announcement comes alongside relatively solid overall financial results for Mpact.
The company reported revenue growth of 5%, reaching R14 billion for the year ending December 2025.
Net asset value also increased by 6% to R37.76 per share, reflecting improved financial strength across the broader group.
However, headline earnings per share declined slightly to 307 cents, compared with 324 cents in the previous year, indicating pressure on profitability.
Mpact declared a total dividend of 60 cents per share for the year.
Fruit Export Sector Provides Bright Spot for Mpact
According to Mpact CEO Bruce Strong, one of the company’s most promising growth areas has been packaging solutions linked to South Africa’s agricultural export industry, particularly the citrus sector.
Record citrus export volumes in 2025 helped offset weaker demand in other segments of the business.
Strong said the company had strategically invested in export-oriented industries such as fruit packaging, which are less dependent on domestic consumer spending.
This strategy has helped Mpact remain resilient despite economic pressures, infrastructure challenges, and global market volatility.
What the Springs Mill Closure Means for South Africa
The shutdown of the Springs cartonboard mill represents more than just a corporate restructuring, it highlights the growing challenges facing South Africa’s manufacturing sector.
Local producers increasingly face competition from cheaper imported goods, particularly in industries where international production capacity is significantly larger.
The loss of the country’s only cartonboard manufacturing facility could also increase reliance on imported packaging materials, potentially affecting supply chains for various industries.
As Mpact evaluates the full operational and financial implications of the closure, attention will likely turn to how South Africa can protect and strengthen its industrial base in the face of global competition.
FAQ
What is the Mpact Springs mill?
The Mpact Springs mill is a packaging manufacturing facility located in Gauteng, South Africa. It produces cartonboard, a paper-based material used to manufacture packaging for products in industries such as food, retail, and consumer goods.
Why is Mpact closing the Springs mill?
Mpact is closing the mill because it has become uncompetitive due to global oversupply in the cartonboard market and cheaper imports that are about 20% lower than the mill’s production costs.
When will the Mpact Springs mill close?
The company expects the mill to stop operating by the end of May 2026, once all existing customer orders have been completed.
How many jobs are affected by the Springs mill closure?
Approximately 377 employees currently working at the facility are at risk of losing their jobs through a Section 189A retrenchment process.
What does Mpact produce as a company?
Mpact manufactures paper and plastic packaging products used in industries such as agriculture, retail, food packaging, and consumer goods.
How did Mpact perform financially in 2025?
Mpact reported revenue of R14 billion, a 5% increase year-on-year, while net asset value rose by 6% to R37.76 per share.
Which sectors helped Mpact’s performance in 2025?
Strong demand from the agriculture sector, especially citrus exports, helped offset weaker market conditions in other areas of the business.
What impact could the Springs mill closure have on South Africa?
The closure could increase the country’s reliance on imported cartonboard, while also highlighting broader challenges facing South Africa’s manufacturing sector due to global competition.