Coffee is definitely the flavour of my visit to DS Smith’s paper recycling facility at Uxbridge, west London. As we sip our drinks, UK managing director Mat Prosser and I consider the topics to cover – and the challenge of recycling disposable coffee cups is set to play a significant part.
Others are the diverse issues of material quality, China, technology and the overall DS Smith strategy – including business diversification within the recycling division as a manufacturer.
The brand messaging around the office underlines that DS Smith has been through a period of change in recent years, starting with a smart new look. But, crucially, it is now a more concentrated and focused brand because the wider group has expanded on the continent and into the US.
There are now four divisions: paper, plastics, packaging and recycling, where Prosser sits. The group has a presence in three dozen countries and employs around 27,000. Prosser’s recycling division has 800 of these people at 40 depots and offices in 13 countries.
There are nine recycling facilities in the UK, with sites rationalised after the acquisition of SCA’s packaging arm in 2012. Another purchase, of Duropack in 2015, took DS Smith further into south-east Europe. A key part of the new business is closer integration between the divisions.
“We maximise opportunity internally as much as possible because we want to drive value into our own business working with strategic partners, suppliers and customers in a wider network,” says Prosser. “We also recognised that we needed to grow our market share across a broad section of the UK business.
“We’re not a one-trick pony in terms of the offerings that we have, and we don’t want to be wholly dependent on one sector.
“Our overall strategy in the UK is a balanced one. We’re comfortable in how we grow, our market share, our service offering and protecting our customers from [market] vagaries. If you’ve got the right business model, you can adapt to that and see your way through it.”
Coffee drunk, we go around the site ahead of the formal interview. A commitment to health and safety makes an immediate impression: walkways are not ignored, signage is comprehensive, PPE is insisted on and vehicle movements well regulated. Prosser is clearly aware of his role as a leader in one of the most lethal of UK industries.
“Health and safety has been a key driver of ours for a long time. Yes, we are here to make a profit and provide excellent service – but also to be safe. Embracing health and safety regulations is part of the decision-making process.”
Implementing tough regimes in other areas is clear from Prosser’s drive for quality imposed at the facilities he oversees in the UK since returning from a continental role with DS Smith. An early move was to introduce teams of quality controllers working independently of the existing operations.
“We recognised that, to control quality, we had to do something different,” he says. “They go in, take photographs and carry out physical inspections such as breaking bales. We assess moisture content and plastic content – anything that would make that bale not up to the quality for that product.
“With customers’ approval, they also monitor their quality. If materials are going from one of our customers direct to our mill, then it has to be at that same standard. That’s not a punitive approach. It’s a proactive approach to ensure that we are pushing the quality back upstream into the supply chain.”
It begs a question about whether this arrangement causes conflict, particularly between internal teams.
“The art is communicating effectively and utilising people who have come from within the business. They’ve got an understanding of the different types of grades of material that we handle right across the spectrum. They’ve actually produced that.
“The inspectors have worked in that environment and that helps overcome the initial hurdle. You’ve seen signs posted around the site here: quality, quality, quality. That gives you a sus-tainable business and a more valuable product.”
The consequences of not focusing on quality are great, according to Prosser. Rejected loads and complaints from customers, wherever they are in the world, can be hugely expensive in reputational terms, and his goal is to be the ‘go-to brand’ for long-term partnerships with the likes of Aldi, Tesco, Primark and Ikea, which are already key clients.
The quality drive was planned ahead of China’s Operation National Sword and the country’s new regulatory regime which threatens UK exports of post-consumer plastic and mixed paper grades. It was certainly a timely move from DS Smith, even though at the time of our meeting it was still not clear what level of contamination would be accepted at Chinese ports by the new year. Prosser said it was a satisfying coincidence for himself and colleagues.
“The resource that we’ve proactively put into place, I thought was ahead of the game, but the game nearly caught up.”
We’re back at coffee. The ubiquitous disposable-but-rarely-recycled drinks cup has been exercising the recycling industry, media and politicians alike. There have been TV programmes, parliamentary hearings and many column inches on why only a tiny fraction of the six billion discarded cups every year avoid landfill or recovery.
For Prosser, the coffee cup is a “Trojan horse” as part of a wider issue of tackling value chains for a host of products and lost resources. Disposable cups are typically plastic and paper and, if the design is right, eminently recyclable, with a market for the secondary materials. And that is why he has joined the cross-sector paper cup recycling recovery group.
“It actually brought together a supply chain that did not realise it was an end-to-end supply chain,” he said. “But the group had a clear understanding of the issue and wanted to provide a solution. We know we are going to have to work together.”
Prosser believes this can be extended to sandwich wrappers, porridge pots and any other coated products.
Prosser swears by technological improvements, and the company is actively looking at how artificial intelligence can better sort fibre grades. There has also been investment at its mills in near-infrared monitoring of feedstock.
“You can say: ‘Is it to bash people because their quality is poor?’ No – it is about educating people to produce a better input, a consistent input, that makes everybody’s life better commercially and production-wise. It allows investment because it gives confidence throughout the whole supply cycle that, ‘yes, that’s a good product coming in’.”
So how does a Europe-wide business look ahead 18 months to the UK outside the EU? Ahead of our meeting, it was made clear that Prosser was not going to engage in any political discussion of Brexit. But he maintains that, whatever happens, quality will out.
“I see the opportunity of new markets if we stick with Brexit. Our [wider] DS Smith group has requirements which we can assist with. It sustains itself from within mainland Europe and further afield. We can fulfil some of that need from the UK.”
DS Smith’s acquisition strategy shows how efficiencies of scale are important. There is also a drive to diversify his division, including into manufacturing. The company has just launched an animal bedding product using recycled fibre, based at a packaging plant at Blunham, near Bedford.
“It’s complementary to our fibre mantra and our ethos in terms of utilising fibre and putting it back into an environmentally acceptable route.”
We end as we began – with the coffee cup. Prosser sees a great scope for future recycling with unlikely partners that have different commercial, environmental or production objectives working together.
“There is a degree of realisation in that ‘this isn’t sustainable. We’ve got to come up with something that is facilitating. I can get it past my gate to your gate. You’ve got to do something.’
“It’s a journey and is about education as well: getting out there and not being afraid. Constructively stating what the issues are and fronting them up.”
CV: Mat Prosser
UK managing director for DS Smith’s recycling division; he has worked for the company since 2007.
Before joining DS Smith, he worked at P&O Transport, The Mirror Group, Cadbury’s and Biffa, where he gained 22 years’ experience in the resource management industry.
He lives in Wales and is also a trustee of Keep Wales Tidy.