Mondi Warns of Rising Costs from Iran Conflict, Accelerates Plant Closures in Europe

Packaging group Mondi has warned that escalating geopolitical tensions linked to the Iran conflict are driving up operating costs, as the company moves to shut plants and raise prices to protect margins.

The FTSE 100-listed firm said higher energy, raw material and logistics expenses—largely tied to the Middle East crisis—have added pressure to an already challenging trading environment. The company indicated it is responding with price increases across its product lines to offset these cost rises.

Mondi also confirmed further restructuring measures, including factory closures across Europe and job reductions, as part of efforts to streamline operations and strengthen competitiveness. Reports indicate around 450 roles are being cut this year, alongside multiple site closures in countries including Hungary, Poland and Germany.

The company said trading in the first quarter of 2026 remained difficult, reflecting broader industry pressures such as weak demand and inflationary input costs. These challenges have been compounded by surging oil prices and supply chain disruptions linked to the Iran war, which have affected manufacturing and transport expenses across global markets.

Mondi’s warning comes as businesses across sectors report similar cost inflation tied to energy price volatility and geopolitical instability. The company noted that while pricing actions are underway, there is typically a lag before these measures are reflected in financial performance.

Shares in Mondi fell sharply following the update, making it one of the biggest decliners on the London market, as investors reacted to the outlook for continued margin pressure and uncertain recovery timing.

The update highlights the growing impact of geopolitical risks on industrial manufacturers, particularly those with high exposure to energy and raw material inputs.