DS Smith Suggests Packaging Prices May Rise Due To Online Shopping Boom
Packaging firm DS Smith has warned that higher packaging prices might be on the way, as an online shopping boom during the pandemic has led to a surge in demand for boxes.
In addition, a shortage of raw materials and higher paper prices are also likely to impact pricing, the company said.
DS Smith, which supplies packaging products to companies including Amazon, Nestlé and Unilever, said it plans to invest in new box plants in Italy and Poland, and expand capacity in Germany.
The COVID-19 crisis has accelerated growth in e-commerce and demand for sustainable products, as consumers stuck at home turn to the internet for shopping.
“I am pleased to report continued positive momentum across the business," commented group chief executive Mile Roberts. "I am particularly proud that throughout the challenges of the pandemic, our colleagues have responded magnificently, keeping all of our operations open and maintaining the highest standards in service and quality for our customers."
The FTSE-100 firm said that trading in the second half of the year has 'continued to build positively on the trends and momentum' it reported earlier in the year.
It also said it expects to report annual results in line with expectations, as the online shopping boom helped boost its sales volumes and improved performance in the United States.
"As a purely fibre-based business we are benefiting from accelerating consumer trends in online shopping and the drive for a more environmentally conscious life," said Roberts.
"Environmental sustainability is at the heart of our strategy and we are excited at the significant opportunities this presents for our packaging solutions and, despite the general macro-economic uncertainty, for sustained growth across the business."