Packaging firm sold over competition concerns

Packaging company DS Smith has sold its corrugated packing business in Darlington formerly known as SCA Branded Packaging to Rotherham-based Cepac for an undisclosed sum.

SCA Branded Packaging was previously owned by Swedish giant SCA Packaging before the whole group covering 21 countries and employing 12,600 people, was acquired by DS Smith in a £1.4bn reverse takeover in June.

DS Smith had to agree to sell the Darlington business – along with another UK site and a French site – to satisfy the European Commission’s concerns over competition before it would approve DS Smith’s acquisition.

The sale of the Darlington business, on the Faverdale Industrial Estate, to Cepac will be subject to EU clearance, pending which it is expected to be completed by early 2013.

The company produces branded and display packaging from its Darlington headquarters and plants in Killingworth, Leeds and Staffordshire. It has around 900 staff.

DS Smith said the workforce would transfer to the new ownership under existing terms and conditions of employment and there would be a planned process of employee communication and consultation.

Rod Ainslie, managing director of Cepac, said: “We are delighted to have reached agreement with DS Smith to acquire this prestigious operation. We very much look forward to welcoming our new colleagues so that we may share a successful future together.”

Chris Brereton, UK Packaging managing director, DS Smith, said: “I would like to thank everyone at the Darlington plant for their service to DS Smith and for continuing to put their customers first during this transitional period.”

The European Commission had argued that DS Smith’s original takeover proposal could have caused competition concerns in the UK for heavy duty and offset litho laminated packaging.

Yesterday DS Smith reported a 62.5% rise pre-tax profits to £106.1m and a 62% rise in revenues to £1.67bn for the six months ended October 31.