DS Smith agrees to sell Dutch paper mill to De Jong Packaging for €50M

19 Jul 2021 --- DS Smith is selling its De Hoop paper mill in the Netherlands for €50 million (US$59 million) to De Jong Packaging. 

The paper mill in Eerbeek produces 370,000 metric tons of recycled paper per year, supplying mainly heavier grades of recycled paper.

DS Smith says the sale supports its strategy to have a “short paper” position in Northern Europe, where a greater amount of external paper capacity is available to the company.

The British multinational packaging business indicates the sale also further aligns its internal paper production with priorities in light-weight fiber-based packaging solutions for FMCG and e-commerce customers.

Offsetting investments
The proceeds will be used to partly offset DS Smith’s enhanced investments in packaging capacity this year, including new greenfield corrugated box plants in Italy and Poland and a significant expansion to the Arnstadt packaging facility in Germany.

The sale’s completion is subject to customary closing conditions, including works council consultation. The sale is expected to complete in the second quarter of DS Smith’s financial year 2021/22.

As part of the agreement, DS Smith will continue to purchase from the mill and supply it with containerboard and fiber to support a “smooth and orderly transition.”DS Smith specializes in e-commerce packaging.

A “good home” for De Hoop paper mill
De Hoop produces recycled paper aligning with De Jong Packaging’s portfolio and growth ambitions.

“Demand for corrugated board packaging is increasing rapidly and this acquisition fits in well with our strategy to be an integrated packaging company,” explains Ad Smit, De Jong Packaging’s CEO.

“We are pleased with this agreement for paper factory De Hoop. It is a factory with a lot of potential that we want to develop.”

Miles Roberts, DS Smith’s CEO, adds: “While this represents another step to further realign our network of paper mills with the needs of our FMCG and e-commerce led sustainable packaging strategy, we have also found a good home for De Hoop in De Jong Packaging.”

DS Smith’s paper-based prowess
DS Smith is a leading provider of recyclable paper-based packaging worldwide, supported by recycling and papermaking operations.

The company plays a central role in the value chain across sectors, including e-commerce, fast-moving consumer goods and industrials.

Through its “Redefining Packaging for a Changing World” and its Now and Next sustainability strategy, DS Smith is committed to “leading the transition” to the circular economy while delivering more circular solutions for its customers and wider society.

Company targets include replacing problematic plastics, taking carbon out of supply chains and providing innovative recycling solutions.

Its bespoke box-to-box in 14 days model, design capabilities and innovation strategy are integral to this strategy.

Last year, PackagingInsights spoke to DS Smith’s Gavin Mounce, e-commerce design manager and Alan Potts, design and innovations director, about the company’s “Sweet Spot” e-commerce packaging methodology, Amazon’s Frustration Free Packaging requirements, “wow factor” unboxing experiences and the rise of connective packaging technologies.

DS Smith operates in 34 countries employing around 30,000 people, and is a strategic partner of the Ellen MacArthur Foundation.

By Joshua Poole