DS Smith celebrates profit boom and plastics reduction success in 2022 annual report

21 Jul 2022 --- DS Smith has achieved a 100% rate of reusable or recyclable packaging and cut 313 million units of plastic from its product portfolio in the past two years, according to its recent annual report. The UK-based paper packaging company also reports a 29% carbon emissions equivalent cut between 2015 and 2021.

The achievements are matched by significant growth in sales and profit. The company has seen a 71% growth in profit before tax, rising from £231 million (US$275 million) in 2021 to £378 million (US$450 million) in 2022. This figure is drawn from revenue of £7.2 billion (US$8.6 billion), representing a 26% rise from the previous year. 

Geoff Drabble, DS Smith’s chair, says its innovation strategy has been key in achieving these results, which were propelled by the COVID-19 pandemic as e-commerce demand shot up during lockdown restrictions. 

“Our Purpose of ‘Redefining Packaging for a Changing World’ has never been more relevant for our business and society at large. A number of the structural growth drivers have been accelerated by the pandemic, and our assets, strategy and people position us well to benefit,” he remarks. 

“As a fully fiber-based company, our circular model supports our vision to be the leading supplier of environmentally sustainable packaging solutions.” 

The e-commerce boom that started during the COVID-19 pandemic has driven fiber-based packaging sales up.Achieving environment targets 
Speaking to PackagingInsights, Miles Roberts, group chief executive at DS Smith, says the achievements reflected in the report show the company is well ahead of its environmental targets. 

“We have delivered excellent progress on our Now and Next Sustainability Strategy: achieving our targets to manufacture 100% recyclable or reusable packaging and to fund 100 biodiversity projects across Europe and North America.” 

“We are also ahead in our progress of taking 1 billion pieces of problem plastics off supermarket shelves by 2025, having already replaced 313 million units since May 2020.”

“We have also increased our ambition on CO2 emissions, setting a 1.5°C science-based target, as set out in the Paris Climate Agreement and committing to reaching Net Zero greenhouse gas emissions by 2050. Our target is to reduce our Scope 1, 2 and 3 GHG emissions by 46% by 2030 compared to 2019.”

In February, we spoke to the company’s senior R&D director, Susana Aucejo, who explained how her team is developing barrier materials to replace plastics in fiber solutions, which contributes significantly to the sustainability strategies. 

Agro-fiber developments 
The company has pledged £100 million (US$120 million) to product innovation and R&D, in which it is exploring a range of new materials together with customers. One such material is seaweed. The company is exploring the use of agro waste to replace tree-based fibers.

“Seaweed has exciting applications that could become the next generation of sustainable packaging solutions. Our research into alternative fiber sources has the potential to lessen pressure on forests, protecting natural resources,” notes Thomas Ferge, paper and board development director at DS Smith. 

As part of the pledge, the company is also working on other types of natural fibers, including materials such as straw, hemp, miscanthus and cotton, and more unusual sources such as the daisy-flowered cup plant and agricultural waste like cocoa shells or bagasse – the pulp fiber left over after sugarcane is processed. 

Recently, PackagingInsights spoke to Circuthon’s circularity educator Paul Foulkes Arellano, who explained that the use of agro-waste such as this would be essential in avoiding water waste associated with tree-based fiber production in the future. 

Asda’s plastic cuts
DS Smith’s design teams have also been innovating to find solutions for its customers’ single-use and hard-to-recycle packaging, with more than 1,000 recyclable, fiber-based solutions developed for products from wine boxes and ready meal trays to shrink wrap and fruit punnets. 

As part of Asda’s accelerated target to reduce own-brand plastic by 15% by the end of 2021, the retailer worked to make in-store displays more sustainable, cutting down on plastic and non-recyclable materials. 

DS Smith helped the supermarket chain find an environmentally sustainable alternative for shelf edge label holders that will replace 1 million pieces of unnecessary plastic from its displays this year. 

“Removing unnecessary plastic is at the top of our minds and is very important to our customers. This project with DS Smith has enabled us to remove the plastic shelf edge label holder, making it easier for our shipper units to flow through our cardboard recycling stream,” says Lisa Walker, packaging and print specialist at Asda. 

By Louis Gore-Langton