DS Smith has increased packaging prices to compensate for OCC price increase

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DS Smith

Paper packaging manufacturer DS Smith has revealed that it has increased packaging prices due to the fact that its OCC input prices have risen.

In its Q3 financial year trading update, the company said that it was seeing particularly strong box volume performance and that although input costs have increased, overall trading was in line with expectations.

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Its statement added: “Group like-for-like corrugated box volume growth has accelerated compared to Q2 of our financial year, with the expected e-commerce and FMCG strength over the Christmas period continuing into 2021, together with some encouraging signs of recovery from our industrial customers. Our Northern European and North American regions have seen the most positive performance, reflecting continued strong growth with our largest customers and increasing utilisation of our plant in Indiana.

“Our North American business continues to deliver significantly improving results as a consequence of good domestic volume growth, with corresponding reduced exports of paper, and increasing pricing.

“The volume growth reflects our strong performance across many sectors and customer groups. We are providing our customers with more ways and easier options to do business with us via our leading digital platforms that are proving to be very popular. These platforms are fully aligned with our unique Circular Design principles, to enhance recyclability and reusability of our products.

“Input costs, including OCC, have increased during the period which, together with high demand, continues to drive higher paper prices. We have started to recover these additional costs through higher packaging prices and our expectation is, with the customary lag, they will be fully recovered and underpin continued momentum into FY22.”

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