JOHANNESBURG (From the Independent Online) -- Mondi is seeking to acquire more companies making the type of flexible packaging used for items like pet-food pouches, as the South African manufacturer taps growing demand from the consumer-goods industry.

The maker of corrugated boxes and industrial bags has made four "bolt-on" consumer-related purchases in the past two years and has the appetite for more, Chief Executive Officer David Hathorn, 54, said in an interview at the company's Johannesburg office on Thursday. The completed deals include 90 percent of Turkish ice-cream package maker Kalenobel for 90 million euros ($95 million) and businesses in Russia and Germany.

"We continue to look and the opportunity set is quite good," Hathorn said, while emphasising the company won't overpay. Consumer packaging accounted for about 21 percent of Mondi's sales as of end June, compared with 19 percent in 2015, and will probably grow faster than other business segments over a five-to-ten-year time frame, the CEO said.

Mondi, which has its roots in printing paper and was spun out of Anglo American in 2007, now gets at least 75 percent of its revenue from packaging and is seeking to grow further in the industry. As the world's ninth-largest packaging and container maker by sales, according to data compiled by Bloomberg, Mondi has generated the highest returns among the top ten over five years. These include Memphis, Tennessee-based International Paper Company and Australia's Amcor.

While the emphasis on the consumer side has been on films, Mondi would consider expanding in aluminum products that are widely used for food packaging, Hathorn said. The company is focused on complex, so-called multi-barrier products with benefits like extended shelf life and odour resistance.

The balance sheet is strong enough to support further acquisitions even as the company completes a number of upgrades at existing plants, the CEO said. Mondi is most interested in deals that increase access to growing, high-value products and help secure supply relationships with makers of consumer goods, he said.

Alongside deals, the company is targeting sales growth from its existing consumer packaging operations and is seeking to work more closely with customers on developing products. Other uses for flexible packaging include in hygiene and medical applications such as equipment for intravenous drips and blister packs.

Mondi's dual-listed shares have declined 9.2 percent in Johannesburg this year, compared with a 3.5 percent fall on the FTSE/JSE Africa Top40 Index. The stock has gained 18 percent in London.

Prices for some packaging paper grades have fallen in the past year and the company reported a 3 percent increase in operating earnings to 227 million euros ($241 million) for the three months through September, compared with a 25 percent increase for the full year in 2015. There are indications though that packaging prices are turning around, Hathorn said.

In addition to its consumer-related purchases this year, Mondi's announced two corrugated packaging acquisitions. Mondi's corrugated sales in Europe have benefited from rising demand for internet shopping and home deliveries, Hathorn said. While European consumers and retailers have lagged the US in online retail growth, that started to change in the last couple of years, the CEO said.

"We are very nicely positioned, with good proximity to a number of the big e-commerce depots so we are getting a good share of that volume," Hathorn said. "It's great business because it's not a simple box, the box has to be made re-closable and re-sealable."

*****

Join Jim Thompson on the 2nd Annual Papermakers Mission Trip to Guatemala, 22 - 29 July 17. Build houses, talk about the pulp and paper industry. For more information, email jthompson@taii.com with "Guatemala" in the subject line.