AGM Statement

Smith(David S)(Holdings) PLC
5 September 2001





                        David S. Smith (Holdings) PLC

                             Chairman's Statement

                                    to the

                            Annual General Meeting

                               5 September 2001





The Group has made a satisfactory start to the financial year.  The packaging
and paper businesses have made progress despite further erosion in paper
prices.  The office products wholesaling division has made a fair start
although sales growth has slowed .



Packaging



The European market for corrugated board was flat in the first half of the
calendar year.  Demand in the UK remained weak and has now been in decline for
the past eighteen months.



Despite the slowdown in demand, St Regis Paper's waste based sales volume has
held up well.   Corrugated Case Material prices continued to decline but so
far generally in line with lower waste paper prices. However we think it
unlikely that any further price reductions will be offset by lower waste paper
prices.



David S Smith Packaging's corrugated business has continued its improving
trend from last year against a backdrop of weak UK demand.  Overall volumes
have been reasonable although the heavy-duty operation has been affected by
the strength of sterling and the difficulties of its customers in the
engineering sector. Our Scottish plants have been impacted by the closure of
customers in the electronics sector.  Selling prices across most operations
have remained steady.



The continental European corrugated packaging operations have started the year
well with total volumes  ahead of the same period last year.  The Kaysersberg
conventional corrugated factories in France have increased sales and margins
and in Italy Toscana Ondulati continues to  make excellent progress.  Poland
has made a steady start but Copikas in Turkey is suffering lower volumes due
to the economic turmoil in that country.  Pricing levels overall are holding
up well at present.  The Kaysersberg paper mills have performed  steadily
despite a slight fall in sales volumes and with  selling prices reflecting the
general weakening of markets in Europe.



The Plastics packaging division has made a  strong start to the financial year
with good growth reported at most operations.  The liquid packaging and
dispensing businesses are trading well with Rapak, the US bag-in-box liquid
packaging operation acquired a year ago, making excellent progress.  The
Coating and Laminating business has  substantially increased sales and D W
Plastics, our crate manufacturing operation, is also performing well
benefiting from expansion into new geographic markets.  Growth in the
Kaysersberg extruded plastic sheet businesses has slowed as it has felt the
effects of  weaker markets in Europe.





Office Products



Spicers wholesaling business has had a mixed start to the year.  Sales growth
in Spicers UK and Ireland  has slowed both  for traditional office products
and  for electronic office supplies.    Spicers France has performed very well
and seen strong growth across its range, despite the backdrop of a weakening
market.  Spicers Germany continues to build sales though growth is  a little
slower than expected due to the weakening German economy.  The development of
Spicers Spain is progressing well with trading due to start in Spring 2002.



In the office products manufacturing market John Dickinson Stationery has
improved its performance against this time last year.  However the envelope
market remains very difficult and improvements in this sector will be hard
won.  The book and pad stationery business has benefited from recent
restructuring and should show further gains.





Name change



The shortening of our name to DS Smith Plc is to be put to shareholders today
for approval.  This new name will be adopted on the 17 September 2001 and will
help provide a clearer image for the Group's packaging business in the
different regions and markets in which it operates.





People



I welcome to their first David S Smith AGM Tony Thorne, who joined as Chief
Operating Officer in January this year, Bob Beeston, who was appointed as a
non-Executive Director in December last year and Carolyn Cattermole who joined
as Company Secretary in November 2000.  I am pleased to report that Bob
Beeston has, with effect from today, been appointed Chairman of the
Remuneration Committee.



It is also a time for farewells.  Sandy Stratton retired earlier this year as
an Executive Director of the Group after a remarkable fifty years with St
Regis Paper and today he steps down from our Board on which he has served for
15 years.  We are enormously grateful to Sandy for his energy and devotion and
for the success he has brought to St Regis.  Eric Smith who has been an
Executive Director of the Group since 1993 also retires from the Board today
and will leave Spicers in October after twenty-six years service with the
company.  Our thanks go to Eric for his leadership in developing Spicers into
the foremost European office products wholesaler.  We wish both Eric and Sandy
a happy and well-earned retirement.



As we have commented over the past year we have put in place very capable new
management  to replace those who have recently stepped down.  We are confident
that they will continue the successful development of the Group in the years
ahead.





Outlook



It is evident  that the European economy is continuing to slow down and this,
as  was indicated at the preliminary results in June, will inevitably slow our
growth this year.    However all operations are benefiting from the ongoing
programme of market development, cost reduction and performance improvement,
as well as from the extensive capital investment programme in recent years. As
a result we continue to believe that, unless the downturn in the European
economy is much deeper than anticipated, the Group will make progress this
year.







Enquiries:



Paul Froud

Group Communications Manager

David S. Smith (Holdings) PLC

020 79325000



Richard Mountain

Financial Dynamics

020 7831 3113