Smurfit Kappa unveils 110m cost-cutting programme

Despite the loss in the fourth quarter, the Dublin-based group reported a €282m profit for the year ending 31 December 2008, half the profit reported in 2007.

However, group sales for the year fell only by 3% on 2007 to €7.1bn, despite sales dipping in the fourth quarter.

Consequently, the group took 95,000 tonnes of downtime during the fourth quarter. In 2008 it reduced its recycled containerboard output by approximately 230,000 tonnes, equating to 7.5% of capacity.

Smurfit Kappa chief executive Gary McGann said the group expected a continuation of difficult operating conditions into 2009.

He said that in response the group would “continue and deepen” its cost reduction programme into 2009 and 2010 with a target of €125m. A total of €75m cost savings were targeted for 2009.

A company spokesman said “every aspect of the group’s cost base is under review”.

The group had already announced that it would suspend dividend payments in 2009.

Smurfit Kappa Group operates across 22 European countries and nine in Latin America.

In December last year, Smurfit Kappa appointed a new chairman after former chairman Sean Fitzpatrick resigned over an £80m loan scandal at Anglo Irish Bank where he was chairman.

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