MM Group: Capital expenditures in 2025 will focus primarily on improving competitiveness and increasing the share of renewable energies

MM Group: Capital expenditures in 2025 will focus primarily on improving competitiveness and increasing the share of renewable energies

- MM Food & Premium Packaging has successfully increased its sales figures despite weak demand
- Over the past four years, MM Group have significantly increased its profitability in the Food & Premium Packaging division
- In Pharma Packaging MM faced a slightly declining market and decided to exit some businesses for margin reasons

The Pulp and Paper Times

The MM Group (MM) is a global leader in consumer packaging. The Group provides packaging solutions for cartonboard and folding cartons with an attractive offer in kraft papers, uncoated fine papers, leaflets and labels. MM has a long-term orientation and promotes sustainable development through innovative, re cyclable packaging and paper products.

In 2024, MM Board & Paper supplied around 15 % of its cartonboard sales to the two Packaging divisions. The majority of cartonboard and paper production is sold outside the Group. The main reasons for this are the lower total purchases of the two Packaging divisions, direct cartonboard purchases by consumer goods producers (direct deals), MM's limited range of speciality cartonboard grades, and geographical positioning. Overall, the two Packaging divisions bought around 31 % of the tonnage processed internally from MM Board & Paper in 2024.

“Over the past four years, MM Group have significantly increased its profitability in the Food & Premium Packaging division and are proud of this development. The priority here is to maintain a good margin level by high efficiency, innovation and excellent service. In Pharma & Healthcare Packaging, we are a leading provider of secondary pharma packaging in Europe and the US, with a strong market position in GLP-1 analogues (for diabetes and obesity). Currently we are midway through the successful turnaround of the former Essentra Packaging, with a strong focus on further performance improvement and growth acceleration,” Mr. Peter Oswald, Chairman of the Management Board, MM Group said in the annual report for FY 2024.

Within the paper industry, the European cartonboard market is struggling with high overcapacity, weak customer demand, export dependency and higher imports. Higher European energy costs and the stop of wood imports from Russia and Belarus have negatively impacted competitiveness.

“At MM Board & Paper, we have concentrated production on the most competitive machines, several of which have recently been thoroughly modernised. As a market leader our goal is to ensure profitable high utilisation of our asset base through further cost reductions, flexibility in production and products, market development as well as targeted structural adjustments,” Mr. Peter Oswald said.
Mr. Roman Billiani Member of the Management Board, added,  At MM Board & Paper, customers rewarded us with significantly higher volumes in 2024 due to the overall recovery of the market, but mainly due to the superior quality of our products and services following our capex program. We also got additional business in Food & Premium Packaging, which experienced a flat market in 2024. In Pharma Packaging we faced a slightly declining market and decided to exit some businesses for margin reasons.

MM Pharma & Healthcare Packaging

MM Food & Premium Packaging is a leading global producer of folding cartons and covers a wide range of sectors in the field of packaging for everyday consumer goods. Business is conducted with large multinationals as well as local consumer goods producers. With broad market expertise and technologically dedicated locations in Europe, the Americas and Asia, we produce for the large volume market of food as well as premium market.

In 2024, MM Food & Premium Packaging has successfully increased its sales figures despite weak demand. Due to extensive investments in more efficient machinery in the previous years, productivity has increased further. In order to protect profitability and cash flow, we have also implemented a comprehensive profit & cash protection program, which has enabled us to operate successfully even in economically difficult times and with inflation related cost increases. Since price has become the decisive factor for many end customers, we have also expanded our business in the increasingly important area of private labels.

Transformation program on track – focus on new machines, cost improvements and innovation

In 2024, MM especially focused on completing the investment program and accelerating operational improvements. In total, It invested more than EUR 120 million in new machinery and installed and ramped up more than 40 new machines. In addition MM deployed operational efficiency measures based on MM standards in its global pharma operations. Though our results in this year were affected by higher costs from trainings and machine ramp-ups, we are now well set up to deliver leading operational performance as a technology leader in the industry. In addition, we made good progress to establish in the market our integrated offering with virgin fiber-based cartonboard from MM Board & Paper.

“We further invested in our commercial and innovation teams to accelerate growth and pioneer innovations in areas that matter most to our customers, like anti-counterfeiting and plastic replacement. Also, we developed our mid-term growth strategy and filled up our sales pipeline to achieve above market growth in the future,” Mr. Andreas Koppitz, CEO Pharma & Healthcare division, said in the annual report.

MM Board & Paper

As a leading European producer, MM Board & Paper offers both recycled and virgin fibre-based cartonboard. It offer an attractive range of kraft papers and uncoated fine papers.

Recent major investments prove their worth 

The major investments made in 2023 proved their worth in 2024. They not only increased overall output and reduced product-specific emissions but also improved the quality of our recycled fibre-based cartonboard products. Attention was also paid to the possibility of producing the most important products on several machines with maximum security of supply for our customers (multi-mill concept).

MM Board & Paper is a leading European cartonboard producer for the packaging industry (excluding liquid packaging cartonboard). The comprehensive fibre-based product portfolio, which includes various types of cartonboard and paper as well as pulp, is manufactured at seven locations in Europe. In 2024, the division generated sales of approx. EUR 2.0 billion with 4,285 employees. 56 % of the production volume was accounted for by cartonboard, 16 % by paper and 28 % by pulp. Recycled fibres, which are purchased from external suppliers, account for approx. 53 % of the fibres used per year. Another 15 % of the fibres used are mechanical pulp, most of which we largely produce ourselves at our cartonboard mills and in the fibre mill FollaCell in Norway. Pulp, which accounts for 32 % of the fibre demand, is produced to 91 % internally, while 9 % is purchased externally.

MM aims to strengthen and expand its market position in the three divisions by pursuing cost, technology and innovation leadership in the core competence areas of packaging and cartonboard. The sales focus is placed on a broadened distribution approach, innovative solutions and the substitution of plastics. Furthermore the objective is to improve profitability through cost management and structural optimisation measures. Based on the encouraging progress made to date, a comprehensive efficiency program called “Fit-for-Future” is being rolled out for the entire Group.

Capital expenditures in 2025 will focus primarily on improving competitiveness and increasing the share of renewable energies and are expected to amount to around EUR 300 million. The annual maintenance shutdowns for Board & Paper, which mainly affect the pulp mills in Poland and Finland, will take place primarily in the 3rd quarter of this year. The related expenses are currently estimated at around EUR 41 million (2024: EUR 26 million).
 

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