DS Smith underlines CEE focus despite Turkish sell-off
The UK packing suppliers announced plans to divest its loss-making DS Smith Copikas business to Olmuksa International Paper for £4.7m (€5.6m). In April 2009, its Turkish subsidiary posted a £8.3m loss. The deal, which is conditional on the approval of Turkey’s competition authority, is expected to be finalised in about six weeks. DS Smith said it would use the cash from the sale to repay debt.
The business consists of two box plants at Corum and Corlu, with a combined capacity of approximately 100,000 tonnes. Its gross assets at 31 October 2009 were £13.2m, with net assets of £0.5m.
Committed to CEE
But D S Smith said the deal in no way signalled a retreat from the Central and Eastern Europe region – which has been targeted by many in the industry as an area ripe for expansion. It added the disposal confirmed its focus of growing core businesses of scale within its portfolio.
“DS Smith will focus on growing in the Central and Eastern European region”, company head of investor relations Liz Christie told FoodProductionDaily.com. “Copikas was a small business and we took the decision that it could be better owned by Olmuksa.”
The UK company confirmed it had corrugated plants in Poland, France and Italy, as well as corrugated sheet operations in the Czech Republic, Slovakia and France.
In February, packaging giant Mondi announced the completion of a switch in the focus of its corrugated and recycled containerboard packaging operations away from western Europe to the CEE in a bid to combat overcapacity in region and cut costs.
The South African-based company said it had successfully completed the revamp to its core positions around Turkey and CEE. The move is part of an ongoing trend that has seen packaging firms seek to establish bases in such emerging markets on lower overheads and the potential for stronger growth.
