Paper and plastics manufacturer Mpact has declared force majeure due to an explosion and fire at a municipal substation in Ekurhuleni, which resulted in a loss of electricity to the company’s Springs paper mill.
Force majeure is a legal term that is declared when a company is unable to meet its contractual obligations due to unforeseen circumstances.
The explosion and fire occurred about a month ago and the mill has been without electricity since.
In an update to shareholders on Wednesday, the company said that due to the loss of electricity there has been an interruption in production for packaging foodstuffs such as specialty core board used for toilet rolls, paper reels and cling wrap rolls.
According to the company, it is anticipated that the electricity supply could be restored to the mill by the end of this week.
The Ekurhuleni mill has a production capacity of approximately 140 000 tons per annum and its total revenue in 2019 was approximately R1.3 billion. Mpact now says the company’s earnings are uncertain.