DS Smith MRF set to close amid material price volatility concerns
DS Smith Recycling is set to close its Southampton materials recycling facility (MRF) following tough trading conditions and a strategic review of its business.
The company has launched a consultation on the closure as it looks to consolidate some of its activity following the acquisition of SCA Packaging last summer.
The MRF has also made significant losses since 2011 due to the high volatility of recovered material prices and the highly competitive nature of the sector.
To alleviate these losses, DS Smith has been concentrating on changing the MRF operation to focus on securing and processing high quality material to increase profit potential.
As a result, it has reduced the MRF operation processing dry mixed recycling to a single fixed shift, operating on average 48 hours per week.
DS Smith Recycling also doesn't operate large scale MRFs in any other part of its business across the UK or continental Europe.
The company's strategy in growing its wider facilities management business has been to secure long term supply partnerships with organisations that operate a diverse range of recycling and recovery facilities.
DS Smith Recycling CEO Peter McGuinness said that he was conscious this period of consultation was unsettling for employees.
"Provision has been put in place to support staff at this difficult time. We are extremely grateful for the staff's dedication and ongoing commitment to delivering a high level of service to our customers," he added.
DS Smith's review of its recycling business following the SCA acquisition has resulted in significant synergies being achieved across sites, with facilities in Croydon and Basildon closed and consultations currently in progress at Stoke-on-Trent and Gosport.
Consultations are also in progress with Silverton and Plymouth, where the opportunity to merge the two facilities into a super depot within the same area is being discussed.