Chairman's AGM Statement

SMITH (DAVID S) (HOLDINGS) PLC
8 September 1999


             CHAIRMAN'S STATEMENT TO THE AGM - 8th SEPTEMBER 1999

The Group has begun the new financial year satisfactorily.  There has been an
improvement in demand in our paper and packaging markets and in the last few
weeks we have announced price increases.  The office products wholesaling
division has made an encouraging start.  Significant progress has been made by
the Group on our cost reduction programmes.

Packaging

The European market for corrugated board increased in volume terms by nearly
3% in the second calendar quarter of 1999, compared to the same period the
previous year.  The improvement in demand has occurred generally across Europe
and follows two quarters of negative growth.  This positive development has
been accompanied in continental Europe by price increases in corrugated case
materials (CCM) and boxes.  In the UK, price increases for CCM have been
implemented in the past month and price increases for corrugated boxes have
been announced.  We are optimistic that these will be successful.

St. Regis Paper has made a positive start to the year as CCM demand levels
have picked up across Europe.  Waste paper costs have increased during the
period prompting CCM price rises.  The specialist mills remain subdued as the
strength of sterling continues.  Paper production has ceased at Silverton
paper mill and the paper finishing and shipping operations should be wound
down by the end of October.

David S. Smith Packaging continues to operate in an intensely competitive
market.  The division has continued to focus on operating efficiencies and
cost reduction.  Some encouragement has been taken from the recent improvement
in the level of activity.  The improving demand for corrugated boxes and the
CCM price rises have led us to announce box price increases with effect from
mid-September.

The improved corrugated demand in Europe has helped Kaysersberg Packaging to
make a solid start to the financial year, despite very competitive markets.
Corrugated box price increases are being implemented to recover CCM price
rises during the period.  Toscana Ondulati is performing well but the Polish
operations continue to suffer from aggressive competition.  The recently
acquired Turkish plant is performing to expectations.

The newly formed Plastics and Logistics division made a reasonable start to
the year with sales slightly above the same period last year.  The sterling
exchange rate continues to put pressure on the UK businesses; polymer cost
increases are making large price rises necessary.

Office Products

Spicers' UK and Ireland wholesaling businesses have seen growth over the same
period last year, driven by a further increase in sales of electronic office
supplies. Spicers France also experienced strong growth for the first quarter
and Spicers Germany continues to make progress as the operation becomes
established.

John Dickinson Stationery has dramatically reduced its operating costs with
the closure of the Apsley site at the end of the last financial year, although
it is not yet running at full efficiency due to the ongoing reorganisation of
the business.  Market pressures remain as envelope imports continue to grow,
attracted by the high level of sterling.

Outlook

Although we remain cautious we are heartened by the signs of improvement in
the UK and other European economies and in particular by the turnaround in
corrugated markets.  While part of this upturn can be attributed to the
Millennium, our view is that there is a genuine recovery underway in Europe.
This recovery, if sustained, should allow the Group to improve its
performance.

John Stancliffe, who has been associated with the company over 25 years and
joined the board in 1990, has decided not to seek re-election.  We are
grateful to John for his excellent advice and diligence over this period and
he leaves with our best wishes.  As you are aware I am stepping down as
Chairman and as a director of the Group at the conclusion of this meeting.
Antony Hichens will replace me as Chairman - I wish him well.  I have enjoyed
the nearly nine years I have been involved with David S. Smith and am pleased
with the considerable success the Group has had over this period.

Enquiries:   Peter Williams, Chief Executive
             David S. Smith (Holdings) PLC
             020 7932 5000

             Tim Spratt
             Financial Dynamics
             020 7831 3113