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'European' DS Smith bemoans Defra policy shift

One of Europe’s leading resource management companies has added its voice to fears that Defra’s decision to cut back on directing policy will hurt the waste sector.

Two senior executives of DS Smith said they were concerned at the tone of the first contact between the new resource minister Dan Rogerson and the industry in a letter he wrote to “stakeholders” earlier this month.

The comments from European commercial director Mathew Prosser and national commercial manager Tim Price came as they briefed MRW on the company’s strategy after the recent re-branding, announced earlier in the month, and nearly 18 months after it acquired SCA Packaging for €1.6bn (£1.3bn).

Both were “very disappointed” with the Rogerson letter, which they said appeared to run counter to a communication from his predecessor Lord de Mauley only few weeks earlier offering direction on source-segregated collections with an emphasis on quality.

Partnership approach

Tim Price DS Smith

Price, left, said: “We sympathise with Defra where they are in terms of budget. But if we go back to what de Mauley said about where we want to go in terms of quality and having the UK leading on quality, then planning is absolutely essential.

“I don’t see how Defra can divorce itself from that – as an industry we’ve got to look how we can work with Defra to grow our infrastructure in terms of collection and reprocessing and anything that affects quality.

“We can’t do that as an industry by ourselves it needs a partnership approach,” Price added.

DS Smith annual report 2012/13:

  • revenue up from £1,969m to £3,669m
  • operating profits up from £142m to £251m
  • return on sales fell from 7.2% to 6.8%
  • dividend paid up from 5.9p a share to 8p

Pan-European solutions

 Mathew Prosser

Price and Prosser, left, said the acquisition of SCA in July 2012 gave the new DS Smith brand greater opportunity to offer “pan-European solutions for our customers”.

“We now have a bigger presence in more countries,” Price added. “For recycling, we weren’t in France, Poland or Germany. The market was devoid of anyone offering that pan-European solution. There was a gap in the market to take a holistic approach.”

Prosser explained that the SCA deal doubled the company’s sites across what was now 25 countries. He said on the continent it translated into a leap of more than 60% in its recycling and packaging market.

Supply circles

Although the re-branding has focused on “supply circles”, Prosser felt the company before SCA had always had the ability to address the whole supply chain but the new wider, European business offered more geographic opportunities.

Price explained: “We design a box, sell the box (made with paper from our own mills) into the supply chain; that box is discarded; we collect the box, put it through our own depots into a mill to make paper reels; those new reels go to a box-making plant and are turned into new products delivered back into the supply chain - all without leaving the confines of our group because we own the logistics.” 

The pair insist this was always possible under the ‘legacy’ DS Smith in the UK but this could now be offered in all the countries in which it operates.

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