DS Smith Invests £104 Million in Light-weight Corrugated Case Material

The acquired facility currently produces fine uncoated paper and, using the latest paper-making technology, DS Smith intends to invest, over the next 12 months.

07/02/08 DS Smith, the international packaging manufacturer and office products wholesaler, announces that it is substantially strengthening the competitiveness of its UK Paper and Corrugated Packaging business through an investment to produce high-quality lightweight corrugated case material (CCM) at its prime UK paper mill at Kemsley in Kent.

It has agreed with M-real Corporation the terms of the acquisition of the adjacent New Thames Paper Mill (NTPM) as well as the 50% balance of Grovehurst Energy Limited, the mills’ energy and services supplier, not already owned by DS Smith. The consideration for the transaction is £60 million in cash. In addition, DS Smith will incur a net cash cost of £7 million from a one-off payment, net of tax, towards the costs of the transfer of the associated pension scheme to a third party.

The acquired facility currently produces fine uncoated paper and, using the latest paper-making technology, DS Smith intends to invest, over the next 12 months, a further circa £37 million in the modification of the acquired facility to enable it to produce high-quality lightweight recycled CCM with effect from January 2009.