DS Smith said it had sold its De Hoop paper mill in the Netherlands to De Jong Packaging for €50m (£43m).
The proceeds will be used to partly offset enhanced investment in packaging capacity this year, with new greenfield corrugated box plants in Italy and Poland, and a significant expansion of the company’s Arnstadt packaging facility in Germany, Smith said on Friday.
It added that the deal supports the firm’s strategy to have a “short paper” position in Northern Europe where there is a greater amount of external paper capacity available to the group and also “further aligns our internal paper production with our priorities in light-weight fibre-based packaging solutions for fast-moving consumer goods and e-commerce customers”.
The De Hoop mill produces around 370k tonnes of mainly heavier grades of recycled paper a year. Completion of the sale is expected to take place in the second quarter of the 2021/22 fiscal year.
As part of the agreement, DS Smith will continue to purchase from and supply to the paper mill a certain amount of containerboard and fibre in support of a smooth and orderly transition.
