If you'd hung on to plastics and paper packaging group Mpact after its unbundling from Mondi in July 2011, you'd be sitting on some substantial returns: a rise of 248% in its share price, excluding dividends, against the JSE All Share's 57% gain over the same period. Mpact produced a 27% rise in first-half operating profit this week, despite the fact that almost all of its sales are in South Africa. But it has warned investors that subdued conditions here will make it more difficult to maintain its volumes, and it is fretting about rising prices. BT asked CEO Bruce Strong...You seem to be pretty worried about rising input costs-I would have thought that the weak oil price, for example, would be a major boon for you, so what else is a worry?The oil price was 42% lower in the first half against the first half of last year and polymer prices took a long time to actually follow ... they certainly didn't come down 42%. The oil price is staying low, but the polymer prices are starting to increase. In the paper business in South Africa there's an increased production of recycled-based packaging and paper, and that has led to an imbalance in waste-paper supply and demand. So the waste-paper situation remains constrained, and there'll be pressure on prices.story_article_left1On the labour side, you're still seeing settlements above CPI inflation.To offset all of that, we have an investment programme and [that includes] the R350-million recycled polyethylene terephthalate (PET) plant. It's got a recycling stream that's underexploited - of bottles going to landfill - so if there's consumption of bottles, there's a raw material flow that's not currently being beneficiated.Another one is the R765-million upgrade in our Felixton mill in northern KwaZulu-Natal. At the end of that project we'll use 100000 tons more waste paper, hence the constraint, but that'll be a short-term constraint, because we think that over time the recovery rate of waste paper will increase to match demand.Your shares have done well since the unbundling. Presumably there's no hindrance to you striking deals using your scrip? Was it one of the reasons you were spun off?Going on our own was related to Mondi's interest in pursuing avenues outside South Africa and Africa. And our focus for the time being has been on South Africa and the rest of Africa, but we're not stuck in any place. We've got a good balance sheet, we've got a good understanding of the markets in which we operate, geographically and product-wise, and we would look for any opportunity anywhere that would bring value. But we are quite conservative and we would do it with due diligence - which is pretty obvious, but not everybody applies due diligence always. (Laughs)Have there been any lines of product that have been particular winners for the group? Last set of results you mentioned the rubbish wheelie bins, for example...The PET plant is one that without our combination of expertise would have been more difficult to bring to fruition, and there are more failures than successes of those plants in the world.But what I would say we do innovatively is our business processes. They're uncluttered.block_quotes_start There's just this air of pessimism which is sucking us right down. Corruption is going to harm us if we don't deal with it block_quotes_endThe guys who are successful here in plastics, they're frugal. And they have a history of great performance. In an industry like this you have to ... make sure the money is going to areas of productivity. One colleague used to say: "If you don't hear a machine, in your business be worried about your job!" ... And I sit in a place where the coffee machine's the only thing I hear. (Laughs) ... You've got to keep the people that are costing and not contributing to an absolute minimum.Is it inevitable that Mpact will do well out of a weak rand - you supply packaging to fruit exporters, for example.We're obsessed with competitiveness. Competitiveness is determined by a number of factors, of which the rand is one, but it's not the ultimate. A weak rand means more expensive capital equipment, for example. Stability in the rand is vital. If anybody ever had to put the rand forward as their reason for not performing, we'd frown upon them. It's there, you've got to deal with it.story_article_right2Does it frustrate you that organised labour takes such a demanding line on wage increases?The bottom line is that everybody must come to the realisation that without competitiveness there's no great future. With labour, forget about the wage rate for the moment; the output has to be competitive at whatever rate.I'm not as pessimistic as many other people, but I'm not a lunatic: I realise there are many challenges. But there's just this air of pessimism which is sucking us right down. Corruption is going to harm us if we don't deal with it. But the other things we can deal with. In relative terms, South Africa is not a bad place.What about power constraints?We're concerned, and we are affected by Eskom's outages . Every single manufacturer is looking at the way they can generate power. South Africans are remarkably resilient and remarkably innovative. They will find a way. And that comes back to the competitive environment: we must have an environment in which we can exploit opportunities to generate and share the power that's there.In the short term, we've got a crisis. In the long term ... [power] generation can be left to a multitude of people. If you add all those things together, I think there's probably a huge opportunity here. What we need to attend to is the decision-making process that got us here...