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The European Invasion

By AICC Staff

April 2, 2018

DS Smith, the European company, now joins the Canadians, Irish, Australians, Mexicans, and Japanese as having operations in the U.S. While these operations are not currently widespread throughout all regions of the country, that may change: Security analysts state that DS Smith may want to grow their North American footprint by as much as three times.

They purchased a majority stake in an AICC Associate Member, Interstate Resources, which includes two container​board mills and six converting facilities. They have also recently announced the building of two greenfield plants. These are most likely near the U.S. operations of their global customers, which they serve elsewhere. This is not a case of reshoring, but of foreign investment in multinational companies. Seventeen of their top 20 customers have operations here.

E-Commerce

A recent interview that appeared in the Telegraph in the U.K. states that DS Smith is coming to America because of their success in 37 other countries with e-commerce. Their boss believes that the average weight of a box here is 50 percent more than in Europe, and his customers want better solutions. They are the largest recycler in Europe and fully understand the manufacturing of different strength levels of test liners and recycled mediums. But they also have the virgin technology that came from their acquisition of Sweden’s SCA. This has been a seven-year turnaround company that is not slowing down in its investments and innovation. Keep your eyes open for new announcements.

Optimizing Packaging Design

DS Smith’s direction of utilizing optimum packaging design and fiber utilization is driven in part by their customers, the consumer products goods (CPG) and packaged food companies. With actual declining CPG sales in food and beverage against a growing global population, packaging must change, and sometimes more rapidly than in the past. A corrugated supplier must be nimble to serve changing customers’ needs.

DS Smith in Europe has taken an active lead in reduced packaging and leading customers to the best packaging through their PackRight Centres. And with WestRock’s recent announcement of its acquisition of Plymouth Packaging and its Box-on-Demand system, along with being a major supplier of fan fold to Packsize, they have made an impressive penetration into the custom packaging market. Packsize has been a major supplier to e-commerce shipper Amazon; Amazon is not done right-sizing yet!

Be aware of creativity in packaging design and innovative use of very low-grammage substrates. I was personally very impressed by the openness of the company in its transparency of publishing its containerboard specifications for all to see. They report on more physical properties than is common for containerboard suppliers here. The report of MD/CD tensile strength and tensile stiffness are good indicators of combined board bending stiffness and flexural stiffness that, along with ECT, lead to box compression performance.

It has been reported that they equip these local plants with combined board-testing technology used in all their other converting facilities, and import right-weight containerboards, which are not universally produced in North America (i.e., 18#/MSF and below). You may want to do your own investigation of this advanced testing methodology in Dr. Roman Popil’s new book, Physical Testing of Paper.

Refibering in North America

On something of a side note, but still relevant to the DS Smith invasion, is the continued conversion and complete renewal of some domestic mills. The security analysts and the industry media and press releases still talk about tons, and what we really want to know is grade structure. We sell in MSF, not tons! So, the recent announcements by IP, PCA, Green Bay Packaging, Bio PAPPEL, WestRock, and Pratt don’t do much for us when they refer to tons. Realize that a ton of 29# has 21 percent more MSF than a ton of 35#. As we follow these developments, stay with us at AICC and Ask Ralph. Also, challenge your sheet suppliers to look at alternatives and developments globally. Get to know and build a path to a third-party lab if you are not internally equipped. Read!


PortraitRalph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical that impact our industry at askralph@aiccbox.org.