DS Smith to restructure loss-making businesses

The international packaging supplier would not elaborate on which businesses this included, following the announcement made in a trading update for the year to 30 April 2009.

DS Smith has already implemented an action programme which is expected to result in a cash benefit of £25m and an up-front cash cost of £23m for the last financial year.

However, the group reported that it remains cash generative.

The company has mitigated the impact of lower CCM prices through its strategy of net buying paper and focussing on the FMCG sector.

It has offset the weaker performance in the UK paper business by a stronger overall performance in corrugated packaging and the strength of the euro.

The plastic packaging business, which specialises in returnable transit packaging, has suffered from weaker demand due to its considerable involvement in the automotive and construction sectors.

DS Smith also continues to work with its Ukrainian associate Rubezhansk to resolve the position in relation to its US dollar denominated loan, which was taken out in November 2007 to increase Rubezhansk's capacity and develop its capability to produce plasterboard liner.