DS Smith Proposes Closure of its UK Sudbrook Mill

Feb. 20, 2006 - London-based DS Smith Plc said that it has proposed the closure of its Sudbrook mill in Monmouthshire by the end of May. The Sudbrook mill operates under the Group's UK Paper division, St Regis.

The announcement comes on the heels of the company's Interim Results, which stated that "a number of the Groupís operations are under close scrutiny as a result of the difficult trading environment and high energy costs."

According to DS Smith, the Sudbrook Mill is the most energy-intensive production operation within the Group and its annual energy costs have approximately doubled over the last three years. St Regis has been unable to pass this increase on to its customers and the mill is now making annualized operating losses of approximately £3 million.

The decision to propose the closure of the mill was also driven by declining demand for the mill's speciality product as customers switch to alternative, lower-cost types of paper, the company said.

DS Smith said that it has started talks with the mill's 135 employees and their representatives, "with a view to reducing and mitigating the effects of the proposed closure."

The Sudbrook mill produces approximately 150,000 tonnes per year of semi-chemical fluting paper, a speciality form of corrugated case material (CCM).

DS Smith Plc is an international Group focused packaging and office products. The Group produces corrugated packaging in the UK and France, recycled paper board (UK), and is one of the largest collectors and merchants of recovered paper in the UK. The Group is also a leading worldwide supplier of bag-in-box packaging and a wholesaler of office supplies in Europe

SOURCE: DS Smith Plc

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