MPACT LIMITED - Contemplated Discontinuation Of Operations At Mpact's Springs Paper Mill

Contemplated Discontinuation Of Operations At Mpact's Springs Paper Mill

Mpact Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/025229/06)
JSE and A2X share code:MPT ISIN:ZAE000156501
("Mpact" or "the Company")

CONTEMPLATED DISCONTINUATION OF OPERATIONS AT MPACT'S SPRINGS PAPER MILL ("SPRINGS
MILL" or the "MILL")

Shareholders are hereby advised that on 2 February 2026, the Mpact board of directors approved
the commencement of a section 189A process in terms of the Labour Relations Act ("LRA") in view of
the contemplated discontinuation of operations at Mpact's Springs Mill (as owned and operated by
Mpact's subsidiary, Mpact Operations Proprietary Limited), which forms part of Mpact's Paper
reporting segment.

This decision follows a sustained deterioration in the Mill's competitiveness. The Mill is the only
domestic producer of cartonboard and competes directly with imports from several countries. Due
to significant overcapacity in the global cartonboard market, a condition expected to persist for the
foreseeable future, and the current value of the rand, the Mill's largest customers are able to import
cartonboard at prices approximately 20% below the Mill's cost of production. This has led to a
decline in demand for the Mill's products and in January 2026, the Mill's largest customer notified
Mpact that it will no longer procure its cartonboard requirements through the Mill and will instead
procure through imports going forward. Despite extensive efforts, Mpact is unable to bridge the
cost gap and unlikely to secure sufficient demand from other customers at sustainable prices.

Subject to the consideration of alternatives, production at the Springs Mill is likely to discontinue
once all open orders have been completed. Based on current information, the Mill is likely to run
until the end of March 2026. The Mill currently employs 377 people.

An extract of the key audited financial information relating to the Springs Mill for the year ended 31
December 2024 is set out below:

    •   Plant and equipment (including capital spares): R186 million

    •   Current assets (inventories, trade and other receivables, cash and cash equivalents): R469
        million

    •   Current liabilities (trade and other payables): R297 million

    •   Revenue: R1,739 million

    •   Operating profit before tax: R32 million

The audited financial information for the year ended 31 December 2025 is expected to be
announced on or about 9 March 2026.

The information contained in this announcement has not been reviewed or reported on by Mpact's
independent external auditors.
Further announcements may be made, as appropriate, regarding the outcome of the section 189A
process and the discontinuation of the Mill's operations.

Melrose Arch

3 February 2026

Sponsor: The Standard Bank of South Africa Limited

Date: 03-02-2026 09:10:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.