Materials

Rising raw material and energy prices and transport costs have put pressure on Smurfit Kappa Group’s corrugated profits.

The group, which was created last December by the merger of Jefferson Smurfit and Kappa Packaging, said it had pushed through price increases for both kraftliner and recycled containerboard, but its energy costs rose by £44m (€65m) in the first nine months of 2006.

As an integrated producer, rising paper prices have put pressure on the group’s corrugated margins. But chief executive Gary McGann (pictured) said it would be able to recover these increases because box prices were continuing to rise.

The merger has resulted in restructuring costs of more than £90m so far.

Smurfit Kappa reported sales of £1.15bn in the three months to 30 September 2006, up 1% on the combined figures of Smurfit and Kappa for the same period last year.