DS Smith has agreed to sell its De Hoop paper mill in the Netherlands to De Jong Packaging for 50 million EUR. The divestment is part of DS Smith’s strategy to refocus on lightweight fibre-based packaging for FMCG and e-commerce customers.
The mill currently produces 370,000 tons per annum of quality recycled paper.
As mentioned, the sale is part of DS Smith’s strategy to have a «short paper» position in Northern Europe, where there is said to be a greater amount of external capacity available to the group. Under the terms of the agreement, DS Smith will continue to purchase and supply the mill with a certain amount of board and fibre to support a smooth transition.
Upon completion of the transaction, De Hoop will be the sole in-house paper mill for De Jong’s packaging business, which serves fresh produce and industrial markets.
DS Smith says it will use the proceeds from the sale to partially offset investments made this year to increase packaging capacity, including two new corrugated box plants in Italy and Poland and a significant expansion of its Arnstadt facility in Germany. «We are delighted to have reached this agreement for the De Hoop paper mill,» says Miles Roberts, DS Smith’s CEO «While this represents another step towards further realigning our paper mill network with the needs of our FMCG and e-commerce-driven sustainable packaging strategy, we have also found a good fit for De Hoop in De Jong Packaging». The transaction is subject to customary closing conditions and is expected to be completed in the second quarter of DS Smith’s full year 2021/22.