Strong demand for cardboard packaging helping DS Smith to offset higher OCC, transport and energy costs

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Miles Roberts DS Smith
Miles Roberts, chief executive, DS Smith

DS Smith has said that strong demand for cardboard boxes has helped it to recover higher input costs for OCC, transport and energy.

In a trading update for the period from 1 May 2021, the company said that box volumes have grown very strongly versus the comparable periods in both 2020 and 2019. In particular, the strongest growth has been seen from US and Southern European FMCG multi-national customers, but growth has been seen across all parts of the group.

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On input costs, the company said that there had been a notable rise in the cost of energy and transportation, and when combined with the continued high cost of OCC, this had resulted in further significant increases in the cost of paper. But given the strong demand for its packaging, it had made good progress towards recovering these increases.

DS Smith chief executive Miles Roberts said: “I am very pleased with the progress made during the financial year to date. We have continued to build on our strong customer relationships resulting in excellent volume growth and good progress towards recovering the significant increasing costs of production through higher prices. Consequently, overall trading continues to strengthen in line with our expectations.

“The long-term structural growth drivers of e-commerce and sustainability have been accelerated by the effects of Covid. Over many years, we have built a business that is ideally positioned to benefit from these growth drivers. Accordingly, while the macroeconomic environment remains uncertain, we remain confident about the prospects for the business in the financial year and beyond.”

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