Mondi is enhancing its presence in the paper bags sector in Southeast Asia through a collaborative venture with PT Indocement Tunggal Prakarsa Tbk (“Indocement”), a prominent cement manufacturer in Indonesia.
This partnership, named PT Mondi Indo Prakarsa Kemasan, will be established at Indocement’s Cement Factory Complex in Citeureup, West Java. The initial focus will be on producing paper bags for Indocement, addressing the escalating local demand in the region. Mondi will hold a 60% stake in the joint venture, with Indocement retaining the remaining 40%. Acting as the primary customer for the venture, Indocement ensures a stable volume over the long term.
The Southeast Asian market is known for its robust construction activity, making it a promising avenue for growth in the paper bags segment. This initiative is aligned with Mondi’s strategy to broaden its footprint in the paper bags sector and develop scalable operations in regions with strong market fundamentals, such as Southeast Asia. This partnership allows Mondi to set up a majority-controlled local production facility in Indonesia, enhancing its regional influence while leveraging Indocement’s established market position.
Claudio Fedalto, Chief Operating Officer Paper Bags at Mondi, stated, “This joint venture is an excellent strategic fit for our paper bags business. It allows us to establish a strong local platform in a structurally growing market, underpinned by a reliable long-term customer. At the same time, it provides a clear pathway for scalable growth while applying Mondi’s high standards in operational excellence, safety, and quality.”
The close proximity to the Citeureup Cement Factory will facilitate operational synergies, improve efficiency, and ensure effective execution. Mondi plans to add another production line for paper bags alongside the current one, enhancing operational efficiency and establishing a solid foundation for further growth in Southeast Asia, potentially adding over 200 million paper bags to its overall production capacity. The joint venture is set to commence operations by late 2026, pending the successful completion of all necessary commercial, operational, and legal processes.