The packaging and office products firm said in a trading update this morning that European demand for corrugated was recovering and it continued to increase box and case material (CCM) prices to help mitigate costs.
“Combined, these actions are progressively allowing us to recover the significantly higher input costs incurred in the second half of 2009,” DS Smith said.
“The cost of our key raw material, waste paper, has continued to move up and we have advised our customers of a further increase in CCM prices.”
In plastic packaging, DS Smith said profits continued to recover on the back of restructuirng, cost cutting and new market sales.
The office products division has been affected by slowdown in the European economy although the UK business is improving its performance. Sales in both divisions are better than anticipated.
DS Smith said: “We continue to be faced by both the uncertainty surrounding the strength of the economic recovery and the need to recover rising input costs.”
DS Smith results for the 2009/10 financial year will be announced on 24 June.
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