Rising demand for alternatives to plastic packaging has boosted profits at Mondi, as the company concentrates on offering new environmentally friendly products to its clients.
Chief executive Peter Oswald said Mondi was working on a number of alternatives to traditional plastic packaging, including paper-based products and plastic pouches.
Manufacturers have been scrambling to find ways to reduce their plastic packaging use amid concerns that excessive consumption is threatening the world’s oceans.
“There’s nobody in the industry who is really coming close to doing this,” Mr Oswald said, adding that the changes in consumer and business behaviour were boosting demand.
Mondi’s pre-tax profits rose 6.3pc to €490m in the first six months of the year, even as the company struggled with currency changes and higher costs of raw materials.
Mondi has been battling the negative effects of a weaker US dollar and a weaker Russian rouble alongside the impact of maintenance shutdowns across its plants.
But revenue rose from €3.58bn to €3.72bn in the period, driven by higher selling prices for products. The company said that its fibre-based packaging business, which is made up of packaging paper and fibre packaging, was the main contributor to the improved performance.
Shares in the company were up 5.84pc on Friday to £21.93 on the back of the results, which were better than the market had expected.
Russ Mould, of AJ Bell, said: “It may be one of the lesser-known names in the FTSE 100 but first half results from paper and packaging business Mondi are particularly impressive given the currency and cost headwinds facing the business.”
Mondi said it was making good progress on its plans to improve parts of the business through a €750m improvement programme which includes updating a number of its manufacturing facilities. Mr Oswald said the business was “making good progress in securing future organic growth” by improving its existing capabilities.
During the six month period the company also completed €415m of acquisitions.