One of South Africa’s oldest companies shuts down the only machine of its kind in the country

Mpact has announced that the only machine in South Africa capable of making coated cartonboard was shut down on 10 May. 

The machine, located in the company’s Springs Mill, is now classified as a discontinued operation in the company’s financial reports. 

It manufactured cartonboard takeaway packaging for some of South Africa’s most iconic brands, such as KFC, Blitz firelighters, and Freshpak rooibos. 

This was revealed by Mpact in a trading statement for the six months ended 30 June 2026, which revealed a company that is under financial strain. 

Mpact told its shareholders to expect a loss per share for the six-month period for its total operations amid higher input costs due to conflict in the Middle East. 

From its continuing operations, which exclude the cartonboard production at Springs Mill, the company will post a profit. However, its earnings per share will fall by between 47.8% and 57.2%. 

Mpact’s Springs Mill has suffered from several operational setbacks in recent years, ranging from disrupted electricity supply to water shortages from the Ekhuruleni Municipality. 

However, the final straw for the mill’s BM6 coated cartonboard machine was the oversupply of cartonboard globally. 

This oversupply has resulted in imports being extremely cheap, resulting in Mpact’s customers shifting to imports as opposed to its production. 

“Unfortunately, Mpact has reached the conclusion that the BM6 cartonboard operation is no longer viable due to its inability to compete sustainably against imports,” Mpact told Daily Investor. 

The company previously explained that the Springs Mill is the only domestic producer of coated cartonboard and competes directly with imports from several countries. 

Mpact estimates that its customers are able to import cartonboard at prices 20% below its cost of production due to global oversupply. 

As a result, the mill’s customers have turned to imports to satisfy their needs, leaving Mpact with a dwindling client base. 

In January 2026, the largest customer of the mill’s coated cartonboard notified the company that it would no longer purchase products from the mill and would use imports instead. 

The BM3 coreboard machine continues to operate at the Springs Mill. This machine serves a different market from the cartonboard machine and can be run profitably, the company said. 

“Our assessment is that with the import protection, there remains sufficient demand for coreboard to support its continued operation,” Mpact said. 

The company has cut jobs, with its section 189A process at Springs Mill impacting hundreds of staff members. The entire mill employed 377 people before BM6 was shut down. 

In its trading update, Mpact revealed that shutting down the BM6 machine cost it R299 million in once-off restructuring, impairment, and retrenchment costs. 

These costs comprise cash retrenchment and restructuring costs of R104 million, together with non-cash charges relating to the impairment of plant and equipment of R54 million, and capital spares and other inventory of R141 million. 

The cash costs incurred were more than offset by the recoupment of working capital related to BM6.

Mpact made it clear that the Springs Mill is vastly different to its Felixton and Mkhondo mills, which are structurally competitive following more than R2 billion of investment.