International packaging manufacturer and office products wholesaler DS Smith has announced the sale of its Taplow Mill site in Maidenhead in the UK to commercial property developer Towntalk, for £30.25m in cash.
The company says it has taken the step as part of a “strategic rationalisation” of its UK Paper and Corrugated operations, adding that the St Regis Paper Company mill, which currently produces 95,000 tonnes/year of corrugated case material, has been “adversely affected by difficult market conditions and substantial increases in energy costs”. The site made losses in the 2005/2006 financial year and is “not expected to return to adequate profitability”. Consultation has started with the 85 staff; it is hoped some employees may be offered jobs at other DS Smith sites. The plant is expected to close by late October, with the Group's Severnside waste collection depot, which also operates at Taplow, also set for re-location. A major collector and recycler of used corrugated packaging, Severnside also provides complete facilities management for large users of corrugated and some plastics packaging. Management hope to find a new site for the business, ideally close to Taplow, soon.
The 45-acre site also houses St Regis Paper's divisional headquarters, employing around 50. It is planned to relocate the headquarters within the next18 months.
DS Smith says the sale will result in an exceptional profit in the current financial year of £20.7m, net of its £9m book value and the related disposal costs. The Group describes the planned closure as another important step towards raising the returns of its Paper operations. Following the proposed closure, St Regis' principal mill at Kemsley in Kent will account for 70% of the division's output of over 840,000 tonnes/annum of paper.
