Fedrigoni has reached a joint manufacturing agreement with Mohawk, widely expected to result in the purchase of the struggling US business by the venture capital backed Italian paper.
Mohawk has itself recently secured a new financing agreement with CIT Northbridge Credit, which involved the participation of Fedrigoni via a convertible instrument. This could result in a strategic transaction over the next several years says a joint statement of intent.
For the moment the idea is to expand the availability of Mohawk papers, such as Superfine in Europe, and those from Fedrigoni in North America. This will focus on self adhesive label papers and those for luxury packaging. The label papers will be attractive to the wine market in the US, Fedrigoni CEO Marco Nespolo says.
“This is an important step forward to reinforce our geographical penetration in the United States, where we will directly produce and distribute high value added papers, leveraging all possible industrial and commercial synergies with our group. We will also better support the ESG strategies of our clients, especially those in the luxury sector by giving them the option of moving to near shoring rather than global purchasing,” he adds.
Mohawk’s Superfine papers have been available via Antalis and Premier Paper and GF Smith in addition carries Mohawk Everyday, Mohawk Options and Crane’s Crest, a brand owned by Mohawk since its acquisition of Crane Papers in 2018.
The deal follows a similar agreement announced in 2015 between Mohawk and ArjoWiggins which would allow each to manufacture the other’s papers, including the Stoneywood mill to produce Superfine. That foundered on the insolvency of the Sequana group, ArjoWiggins’ owner, leading to a management buyout of the UK mills at Chartham and Stoneywood. That has now failed with the appointment of administrators last week.
Cost problems exacerbated by the energy crisis have been blamed and as 368 of 463 employees are now redundant, there is little expectation of a rescue, though administrator Interpath will examine an interest “as a matter of urgency”.
Stoneywood has produced Conqueror among other brands in recent years. Chartham is best known for its translucent papers.
Also this year, another US producer of fine and speciality papers Neenah has merged with speciality materials group SWM to create Mativ.
The interest in Mohawk for Fedrigoni will come through increasing access for its packaging grades for high value and luxury packaging in the US. This has been the direction for Fedrigoni since private equity investor Bain Capital took a major stake in the company four years ago and was joined in joint ownership by BC Partners this summer. The opportunity comes with the perceived need for sustainable packaging.
