DS Smith sees positive Q3 results amid market share growth, SCA synergies

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DS Smith sees positive Q3 results amid market share growth, SCA synergies

March 12, 2014 - 23:50

BRUSSELS, March 13, 2014 (PPI Europe) -UK packaging giant DS Smith (DSS) said its corrugated volume growth in its third quarter ending January 31, was in line with its plans due to market share growth in its packaging business and the benefits from the synergies of the acquired SCA operations. The firm was positive about the outlook for its growth in 2014, saying that it sees its volumes continue to grow and that increased input costs are being passed on through its box price increases.

Growth in market share:DSS said that it managed to increase its market share in the packaging business by winning new orders across all regions in Europe. The firm added that new orders were added primarily on the account of pan-European customers. According to DSS's CEO Miles Roberts, the firm benefited from its added-value offer in service and quality.

He added that the market share increased on account of "smaller, more regional suppliers."

Roberts also said that as smaller box-makers continue to lose market share to large groups, he expects industry consolidation to continue over the medium term. "I certainly expect to see more consolidation. We're seeing bits and pieces, and I think that will continue. [..] There's a lot of activity there," Roberts said.

Box pricing still a challenge:DSS said that although it managed to pass through some of last-years' paper price increases, more effort needs to be done in raising box prices. Roberts would not quantify the box price increase that the firm is set to work on to fully offset higher paper prices.

The group said that it sees pricing in Germany as "competitive" due to increased market offer. Roberts added though that the impact of the new capacity, which he thought was not massive in relation to the market size, is likely to be a short-term issue.

Kraftliner reduction:DSS has reiterated its aim of reducing the kraftliner share in its packaging composition for cost and environmental reasons. Roberts also said that this strategy is strongly supported by some of its customers.

"We've had one of our largest customers say recently they don't want kraftliner in any of their products. [...] What we're focused on [is] trying to give our customer the products that they want, to delight the end customer," Roberts added.

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