Packaging entrepreneurs Dermot Smurfit and Michael Smurfit have led the takeover of a New Zealand paper mill for an undisclosed price, saving the plant from closure and preserving 170 jobs.
The Whakatane mill had been earmarked for closure by the end of June after its owner and biggest customer, Swiss packaging company SIG Combibloc, decided earlier this year that the plant, which made liquid packaging board used for milk and juice cartons, was not longer competitive in this market.
Speaking to The Irish Times, Dermot Smurfit, the main investor in a consortium that also includes unnamed parties from New Zealand and elsewhere, said the plan was to ramp up production in the mill’s two other lines of business: folding box board, a grade of packaging that is safe for direct contact with food, and carrier board, typically used for beer packaging.
“The current output of the mill is 150,000 tonnes. We’ll be looking to increase that by 50,000 to 60,000 in due course,” said Mr Smurfit (76), adding that the consortium could seek in three to four years to float the business in New Zealand or London.
Mr Smurfit said that the hope was that the investment would emulate the Smurfit brothers' successful involvement in Powerflute, a once-distressed Finnish paper mill where they led a takeover in 2005. That business ended up being acquired by US private equity group Madison Dearborn Partners for £268 million (€312m), a deal that resulted in a £65.6 million payday for the Smurfits.
Demand for cardboard is rising globally as product manufacturers shift from plastic to more sustainable packaging, a trend that has been turbo-charged during the Covid-19 pandemic.
The growing role of e-commerce is also helping parts of the industry, including Dublin-listed Smurfit Kappa, the international paper packaging giant founded by the Smurfit brothers' father and currently run by Michael Smurfit's son, Tony Smufit.
