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“We want to demonstrate how our circular driven packaging and paper solutions, created by empowered people, taking action on climate, will help us to contribute to a better world” - Mondi's CEO

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An interview of Mondi's group CEO, explains why his optimism for the business has increased despite the challenging environment.

“We want to demonstrate how our circular driven packaging and paper solutions, created by empowered people, taking action on climate, will help us to contribute to a better world” - Mondi's CEO

Mondi is a global leader in packaging and paper, operating across the value chain. The Mondi Way shows how our shared sense of purpose is intrinsically connected to our strategy and culture, enabling us to create best-in-class products for our customers and shared value for our stakeholders. Our four strategic value drivers set a clear roadmap for the future and, together with our resilient business model and manufacturing excellence, give us distinct competitive advantages. Our culture is centred around empowering people to be passionate and entrepreneurial in a respectful and inclusive way, underpinned by our values of Performance, Care, and Integrity

Andrew King took over as Group CEO of Mondi on 1 April 2020. His 18 years’ experience with the Group, 12 years as Group CFO, have ensured effective leadership and insight from the start. In this Q&A, Andrew explains why his optimism for the business has increased despite the challenging environment.

Q1: 2020 was an extraordinary year. What have been the main challenges for you and what have you learned? 

The last 12 months has given us all much to think about. The impact of COVID-19 has been unprecedented, but leadership principles remain the same. I took over as CFO in 2008, at the start of the financial crisis. I learned how important it is to be proactive and communicate clearly, so that everyone knows what is expected of them. This holds true today. We were quick to make bold decisions, some easier than others, including prioritising our operations to ensure we could secure supply to our customers, slowing capital investments, delaying the dividend, strengthening liquidity, while always keeping the safety of our people as our top priority. 

Relationships play a key role. Being able to trust and rely on one another is crucial in a crisis, as is staying visible as a leader. Ramping up digital communication and being more agile in the way we work has enabled us to maintain momentum, however the benefits of connecting inperson cannot be underestimated, and I look forward to replenishing this relationship capital when circumstances allow.

Another key lesson is the value of empowerment without abdicating responsibility. I’m a firm believer that my colleagues around the world are best qualified to understand the nuances of what is required in their respective areas. To be successful into the future we must continue to provide the support, flexibility and space for colleagues to do what they need to do, including exploring new ideas, even though not everything we try will work.

Q2: What support did Mondi give to customers during the pandemic? 

Our focus was on communicating openly to understand customer needs, and taking advantage of our global network to ensure a stable supply despite surges in demand or temporary disruptions in production. In Mexico for example, we supply paper bags for corn flour, which is used to make tortillas – a staple part of the nation’s diet. In Turkey, we were able to respond quickly to a customer’s requirement for additional cement bags by redirecting volumes from our operations in Poland and Spain. There are many examples of Mondi colleagues’ positive action in this report, testament to the benefits of the scale and interconnectedness of our operations, and our culture of decisive action. 
Vertical integration gives us control over some of our key resource inputs, and our customers see us as a reliable partner with capacity to continue designing innovative sustainable solutions.

Q3: Mondi has had a consistent strategy for a number of years. Has COVID-19 exposed weaknesses which will need action going forward? 

As one of the architects of our strategy, it is personally rewarding to see how well the business continues to fare despite the challenges of a global pandemic. I believe that our consistent approach is central to the resilience of our business model. Many of the trends that we identified pre-crisis have merely accelerated during the year, including increased demand for sustainable packaging and the rise of e-commerce. COVID-19 has also shown just how many of our products are essential in meeting the needs of society, from ensuring we have food on our tables to the personal and home care products we use every day. 
We have achieved a lot in the last 12 months. We have continued to run our operations and supply our customers, met almost all of our five-year sustainable development commitments, successfully advanced major capital projects, further developed our portfolio of sustainable products, and maintained strong engagement with our diverse stakeholders. 

So in summary, I don’t think we need any fundamental shifts in strategy. We are well positioned for future growth and we will maintain our flexibility to remain a strong partner for our customers.

Q4: How did colleagues respond to the challenges of COVID-19? 

It has been inspiring to see how our colleagues have come together when it matters most. My sincere thanks go to everyone for going above-and-beyond to care for one another, to deliver for our customers and support our communities. Our packaging and paper solutions have played a key role in keeping people fed and safe during the pandemic, and our sites largely remained open, thanks to a herculean effort by our people. This includes ensuring the correct protective equipment is available at all times, running operations in line with relevant legislation during national lockdowns, embracing new shift patterns and digital ways of working, securing chemicals and other supplies during a global shortage, getting products across borders, and balancing the many professional and personal pressures we all faced. 

Our teams also continued to support their local communities, with more than €3 million in financial contributions alongside donations of masks and other medical supplies. We provided community relief such as fresh water and food parcels to vulnerable communities in South Africa, as well as the ongoing delivery of essential services such as energy, heat and wastewater treatment at a number of our operations. At Gronau (Germany) we built two new lines to produce melt blown fabric and surgical facemasks, and our team at Korneuburg (Austria) produced packaging for QIAGEN’s SARS-CoV-2 coronavirus test kits. 

All this makes me even more determined to see Mondi become the most admired and trusted sustainable packaging and paper business.

Q5: Sustainability is a key topic for stakeholders. What makes Mondi an industry leader in this space? 

Sustainability has been important to Mondi for a long time and we are widely recognised as an industry leader. In 2020, we were one of only 10 companies in the world with a ‘Triple A’ score from CDP for global environmental leadership on climate, forests and water. 

I am proud of the meaningful progress we have made over recent years guided by our Growing Responsibly commitments, which ran to the end of 2020 and I invite you to take a look at our relationships and resources section for further details. 

In terms of future priorities, I am inspired by the potential of our new Mondi Action Plan (MAP2030) launched at the start of 2021. This is our ambitious new sustainability framework, which defines our commitments and targets for the next decade. Our aim is to be both pragmatic and aspirational by focusing on products, people and climate action to maximise our positive impact. We want to demonstrate how our circular driven packaging and paper solutions, created by empowered people, taking action on climate, will help us to contribute to a better world.

Q6: How is Mondi positioned for growth in 2021 and beyond? 

I am very excited by the growth options we have in the business. Our corrugated and flexible packaging businesses enjoy good structural growth opportunities, supported by increased demand for e-commerce and sustainable packaging. We enjoy a cost advantaged asset base with around 80% of our capacity in the lowest cost quartiles, and we have an enviable financial position and strong cash generation, which enhance our strategic optionality.

Our current project pipeline, including major projects at our mills in Slovakia, the Czech Republic, Russia and South Africa, as well as investments in expanding our packaging converting capacity will further improve our environmental performance, increase our pulp and paper production and deliver enhanced service and product offerings to our customers. We continue to invest in digital technologies that drive efficiencies, and our cross-functional R&D facilities enable us to innovate across product lines. 

We continue to seek selective acquisitions that supplement this organic growth. We are very pleased to have agreed the acquisition of a 90% interest in Olmuksan, a leading Turkish corrugated packaging producer in early January 2021 (subject to certain completion conditions). This expands our geographic coverage and customer offering in a fast growing market. 

We are pleased sustainable packaging continues to be a long-term priority for our customers and wider society. As a leading producer of both paper- and flexible plastic-based packaging, we are uniquely positioned to support our customers’ environmental goals. 

Most importantly, we have a team of passionate people with a shared sense of purpose that gives us our collective strength and advantage as an organisation. It has been great to welcome our new Chair, Philip Yea, and our new CFO, Mike Powell, who very much support the Group’s strategic objectives and share my optimism for Mondi’s future.

The Above Interview is taken from Mondi's Annual Report. The Content is not edited.

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