Smurfit Kappa Envisions Strong Demand Growth in Europe and Americas in 2018

SEATTLE (Scrap Monster): The Annual Report 2017 published by Smurfit Kappa states that the company is likely to see continuous demand growth from Europe and Americas regions in the medium term. The report outlines the achievements made in 2017 and also lists out exciting and innovative plans to develop its business, so as to maintain its leadership position in the industry.

According to the report, the Smurfit Kappa Group of companies reported new record full-year EBITDA of €1,240 million, even in the midst of challenges on account of high recovered fibre costs, elevated raw material costs and highly volatile currency movements. The EBITDA margin stood at 14.5%.

In Europe, EBITDA increased by 3% to €955 million, despite 14% jump in average recovered fiber input prices. The recycled containerboard prices were up by €100 per tonne over the previous year, backed by strong demand. Tight supply led to price increase of nearly €150 per tonne during the year.

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The EBITDA of Americas region stood at €311 million in 2017, significantly down by 8% when matched with 2016. The EBITDA margin too declined from 16.8% to 14.4%. The increased export prices for containerboard from the US to Latin America badly impacted the results. The report states that the recent investments in Los Reyes, Mexico and Papelsa, Colombia will help the company to recover the input cost pressures in 2018.

The Group completed three key acquisitions during the previous year, primarily in Russia and Greece, which were valued at around €55 million. The acquisition of the Soyuz, Moscow plant helped the company become the largest international corrugated packaging producer in Russia. Also, the acquisition of the paper plant near Thessaloniki in Greece was the company’s first entry into the Greek market. In addition, the group also completed acquisition of assets of Litbag, a Portuguese producer.