Local Production Costs Force Mpact to Lay Off 400 Employees: Closure Set for March 2026

• Mpact faces layoffs as 400 jobs are threatened due to uncompetitive local production costs
• The JSE-listed company, spun off from the Mondi Group over 10 years ago, is set to close in March 2026
• Mpact said it was unable to bridge the cost gap and unlikely to secure enough demand from other customers at sustainable prices.

Justin Williams, a journalist at Briefly News since 2024, covers South Africa’s current affairs. Before joining Briefly News, he served as a writer and chief editor at Right for Education Africa’s South African chapter.

Packaging manufacturer Mpact has issued retrenchment notices at its carton board business, putting nearly 400 jobs at risk. The company said cheaper imports and a stronger rand made local production uncompetitive.

Mpact set to close in March

The JSE-listed company, spun off from the Mondi Group more than a decade ago, said on Tuesday, 3 February 2026, that it could not compete with the flood of imported carton board. Mpact said it is not considering mothballing Springs Mill, operated by its subsidiary Mpact Operations, which employs 377 people. ENCA stated that the mill, South Africa’s only cartonboard producer, is set to close in March 2026.

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According to BusinessDay, the company said global overcapacity in the cartonboard market is expected to continue for the foreseeable future, and the rand’s value allowed its largest customers to import cartonboard at prices about 20% below the mill’s production cost. This, Mpact said, led to declining demand for its products. In January 2026, its largest customer informed the company that it would source future cartonboard requirements through imports rather than the mill.

Unable to bridge the cost gap

Despite extensive efforts, Mpact said it was unable to bridge the cost gap and unlikely to secure enough demand from other customers at sustainable prices. The company’s decision makes Mpact the second South African manufacturer this year to halt local production and rely on imports, highlighting further declines in the country’s manufacturing capacity.

Last month, British American Tobacco said it would close its only South African plant, shedding thousands of jobs. The company said the proliferation of illegal cigarettes contributed to the decision and that it would no longer manufacture locally for the first time in more than 50 years, instead relying on imports to serve the South African market.

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Unemployment in SA

Employment conditions in South Africa have worsened, Statistics South Africa (StatsSA) reported. In its Quarterly Employment Statistics released on 24 June 2025, the agency said 95,000 jobs were lost between March 2024 and March 2025. The trade industry recorded the largest losses, shedding 52,000 positions. StatsSA also reported that 74,000 jobs were lost in the first quarter of 2024.

The agency released further employment figures on 12 August 2025, showing that the unemployment rate climbed to 33.2% in the second quarter of 2025. According to StatsSA, the number of unemployed South Africans reached 8.4 million, highlighting a growing employment crisis.

Coca-Cola reacts to job cuts

In a previous article, Briefly News reported that Coca-Cola has spoken up after reports surfaced that over 680 employees in South Africa could lose their jobs as part of a restructuring process.

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These changes could result in job losses. It is allegedly planning on closing its manufacturing plants in East London, the Eastern Cape, and Bloemfontein in the Free State.

Source: Briefly News