DS Smith buys out Italian recycling firm

The purchase of Italmaceri, which was founded in 1990, gives DS Smith a very strong presence in the Italian market where it is will be handling more than 500,000 tonnes of paper for recycling.

DS Smith is already the largest paper recycler in Europe, and will be collecting over 5.4 million tonnes annually and its paper mill operations include one it owns at Lucca in Tuscany which it says is an Italian market leader in containerboard production. The site produces 385,000 tonnes a year of recycled corrugated case material; PM1 165,000 tonnes and PM2, 220,000 tonnes. [updated 21 July 2014]

Crucial to the development of the Italian business is a closed-loop approach securing the whole business chain for cardboard boxes. This has seen DS Smith in the UK buying used cardboard back from major retailers and then recycling it into new boxes for use by the same retailers. Now, this approach is expected to be developed further within Italy both in the north of the country and the more agricultural south for fruit packaging.

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Costs of the deal have not been disclosed. DS Smith bought the final 50% of the business from graphic papers producer Burgo Group. Italmaceri is the second largest recycling company in Italy, handling in excess of 500,000 tonnes of recovered fibre per annum. It has its headquarters in Turin, with operations in Ancona, Casarile and Novara.

Commenting on the deal, Miles Roberts, chief executive of DS Smith said: The purchase of Italmaceri is consistent with DS Smiths strategy to lead the way in recycling. It builds on our market leading position in Europe and will allow us to grow our closed loop recycling model in Italy, where we already have packaging and paper operations. We want to provide our customers not only with excellent packaging, and a world class recycling service, but solutions to all elements of their supply cycle.

Potential

The Italian recovered fibre market is the fourth largest in Europe, but has a recycling rate of 63.3%, lower than the European average of 71.7%. DS Smith said that this offers potential for DS Smith to target and grow volumes through the commercial / industrial (including retail, wholesale and manufacturing) and municipal markets.

Peter McGuinness, chief executive of DS Smith, Recycling Division, said: This is another exciting chapter within our European growth strategy. The recovered fibre from Italmaceri will secure a fibre supply stream for our recycling network, including the DS Smith paper mill at Lucca. We have taken the opportunity to invest further in an innovative business that will help deliver our vision; the power of less, which helps our customers achieve more, with minimal impact to the environment; while realising maximum efficiency and cost gains.