UNTIED KINGDOM (From news reports) -- DS Smith Plc. announced Friday the proposed sale of its De Hoop paper mill in the Netherlands to De Jong Packaging for 50 million euros or about 43 million pounds in cash.

Completion of the sale is subject to customary closing conditions including works council consultation. The deal is expected to take place in the second quarter of fiscal 2022.

As part of the agreement, DS Smith will continue to purchase from and supply to the paper mill a certain amount of containerboard and fibre in support of a smooth and orderly transition.

The mill produces around 370 thousand tonnes of mainly heavier grades of recycled paper per annum.

DS Smith said the sale supports its strategy to have a 'short paper' position in Northern Europe where there is a greater amount of external paper capacity available to the company. It further aligns the company's internal paper production with priorities in light-weight fibre-based packaging solutions for FMCG and e-commerce customers.

The proceeds from the sale will be used to partly offset this year's enhanced investment in packaging capacity, with new greenfield corrugated box plants in Italy and Poland. It will also be used for a significant expansion of Arnstadt packaging facility in Germany.