Recycled packaging company DS Smith has said it intends to focus on recycled corrugated packaging and collection of fibre once it completes the sale of wholesaling business Spicers.
In a trading update yesterday, the company revealed that it has accepted a binding offer of £200 million for European office products wholesaling business Spicers from Unipapel. Cash will be used to reduce DS Smith’s debt in the short-term, but looking further ahead, the proceeds would be available to reinvest in the group’s recycled packaging business with the aim of expanding its geographic coverage.
In the statement, DS Smith said: “We remain confident in the strength of the refocused DS Smith business model, with long positions in recycled corrugated packaging and in the collection of fibre, and a more limited and (as previously announced) reduced exposure to paper manufacturing. Our focus on FMCG (fast moving consumer goods) customers is an important part of our strategy as the resilient demand for consumer goods reduces the volatility in the demand for our products.”
The company also revealed that it has seen strong like-for-like revenue growth of 13 per cent across its packaging business, which reflects the recovery of substantial cost increases as well as underlying volume growth. Overall, DS Smith remains confident in its trading outlook for the year.