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Mondi Sees Unchanged Prices in Short Term for Uncoated Paper

Aug. 7 (Bloomberg) -- Mondi Group, Europe’s largest maker of office paper, said the short-term outlook for uncoated fine paper is for unchanged prices, while prices for corrugated paper are increasing as it focuses on demand from emerging markets.

“Sales from emerging markets is 52 percent and growing,” Chief Executive Officer David Hathorn said in an phone interview today. Revenue from packaging products, which account for more than 60 percent of sales, are also expected to increase “over time,” he said.

Mondi plans to boost its consumer packaging business and increase its presence in countries such as Poland, Hungary and China through the purchase of Nordenia International AG, a deal the Johannesburg-based company announced July 11. While demand in a number of emerging markets remains firm, it is soft in certain western European markets, the company said in a statement today.

Mondi shares rose 1.8 percent to 72.60 rand at the close of trading in Johannesburg.

Underlying operating profit fell to 269 million euros ($334 million) in the six months through June, from 354 million euros a year earlier, Mondi said. The company declared an interim dividend of 8.9 euro cents, an 8 percent increase from a year earlier.

The newsprint unit made an operating loss of 3 million euro, even as the Mondi Shanduka Newsprint joint venture in South Africa returned to “a modest level of profitability,” because of price increases. The company continues to seek options for the Aylesford Newsprint business in Europe, Hathorn said.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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