Shares in paper and packaging giant Mondi have slumped after the firm revealed it is facing soaring costs as a result of the Iran war. The FTSE 100 firm saw its share price drop by five per cent in early trading on Friday, as it warned it has already faced higher energy, raw material and logistics costs because of the Middle East conflict.
Impact of the Iran War on Mondi
The effective blockage of the Strait of Hormuz has sent energy and supply chain costs soaring since war broke out in February. Mondi said on Friday: “Significantly heightened geopolitical tensions in the Middle East further increased volatility in an already complex operating environment.”
Price Increases and Factory Closures
The Surrey-based firm stated: “We are actively responding with pricing actions. While there is a customary lag, we expect the impact of these price increases to take full effect in the third quarter of this year.” Additionally, the company announced that its earlier decision to shut plants in Hungary, Poland, and Germany will cost 450 jobs.
This story will be updated as more information becomes available.
