DS Smith to Shut PM1 at Kemsley Mill in UK

March 11, 2009 - DS Smithís UK Paper division, St Regis, announced the proposed closure of its PM1 paper machine at Kemsley Mill in Kent, UK.

PM1 produces approximately 75,000 tonnes per year of corrugated case material (CCM), which is used for producing corrugated packaging.

The company proposes to shut the machine by the end of April 2009.

St Regis currently operates four paper machines on the Kemsley site, producing a total of over 800,000 tpy.

PM1 is the oldest of St Regisís paper machines, the company said.

DS Smith said that after looking into the costs to upgrade the machine and considering the decline in demand for CCM in the UK, "PM1 is no longer considered to be viable."

The company said it is currently in talks with employees and their representatives at Kemsley Mill.

"If the machine closure is confirmed, up to 40 roles may become redundant out of the total workforce on the Kemsley site of 575 people," DS Smith said in a written press statement.

"Every effort will be made to assist the employees affected in finding alternative positions within the Group or with other employers in the area'" the company added.

The Kemsley Mill is one of the largest recycled CCM manufacturing sites in Europe. The mill includes the New Thames PM6 machine, which was recently upgraded to enable it to produce high-quality lightweight CCM.

DS Smithís UK Paper division, St Regis, is the leading UK producer of recycled paper, producing almost 1.2 million tons per year. About 70% of its capacity is used in the construction of corrugated boxes and trays.

In addition to Kemsley Mill, St Regis has three other mills with five paper machines. The paper machines at Kemsley recycle over 850,000 tons of waste paper per year, all of which is supplied by DS Smithís Severnside Recycling business.

SOURCE: DS Smith Plc

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