Speaking to letsrecycle.com, Peter McGuinness, Severnside Recycling managing director, said the acquisition “is very important to us. It means that we can offer national coverage to the major companies with a one stop shop approach.”
The acquisition of BPB Recycling from plasterboard group BPB was completed yesterday following approval for the deal by the Office of Fair Trading. BPB Recycling was acquired by DS Smith, the parent company of Severnside as well as the St Regis group which manufactures and converts cardboard in the UK. The name BPB will now disappear as operations become part of Severnside.
Market leader
With Severnside handling more than one million tonnes of recovered paper annually, the addition of an estimated 250,000 tonnes from BPB means it consolidates itself as UK market leader, well ahead of major competitors such as Smurfit and SCA Recycling.
BPB Recycling is seen as a good fit for Severnside's activities as it has previously operated primarily in areas around its six mills which are mainly in the south of England. However, the acquisition will give Severnside access to an increased tonnage of material. Mr McGuinness said: “With the growth of St Regis we need an expanding infrastructure which will fit in with their plans for growth.”
New mill?
There has been strong speculation over the past few years that St Regis would like to build a new board-making mill within the UK, possibly on Teesside. The last new machine installed by the company was in the early 1990s at its large Kemsley site in Kent.
Mr McGuinness said he could not comment on such a move or future plans by St Regis. However, industry analysts have suggested to letsrecycle.com that by securing BPB Recycling, which has a good base in the north of England, this would fit in well should St Regis decide to go ahead with a plant on Teesside.
For Severnside, the purchase also marks a move by the company into Scotland where BPB Recycling has an important supply contract with the Davidson mill in Edinburgh.
Mr McGuinness said that there was no intention at present to make staff redundant, emphasising that the “company is looking for expansion”. He said: “What we have got is a very experienced management at BPB and a very committed workforce. We are looking to expand the business and need the skills of the workforce.”
Independents
Although Severnside now has a stronger position in the marketplace, Mr McGuinness spoke of the importance of the independent merchants in the UK recovered paper sector. “We view the supply into UK mills as very important and part of the infrastructure for this is the independent sector. It is very important that we retain their good will to supply the mills. They remain part of the supply chain and we need to ensure that we have no loss of papermaking capacity within the UK.”
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