Chairman's AGM Statement

Smith(David S)(Holdings) PLC
6 September 2000
                                       
                                       
                            CHAIRMAN'S STATEMENT TO
                  THE ANNUAL GENERAL MEETING 6 SEPTEMBER 2000
                  AND APPOINTMENT OF CHIEF OPERATING OFFICER

The Group has made an encouraging start to the financial year.  The packaging
and paper businesses have continued to advance, with good volume growth in
most operations.  The office products wholesaling division is performing
strongly with higher sales growth.

Packaging

The European market for corrugated board has remained buoyant with growth in
the first half of the calendar year of almost 7% compared to the same time
last year.  This strong growth in continental Europe has not extended to the
UK market which by comparison appears to be little changed during the same
period.  Waste paper supply in Europe has improved and waste paper prices have
fallen back after sharp increases earlier this year. The corrugated case
materials price increases that took place during the first half of the
calendar year are now fully in place.  Converters have found recovering these
cost increases challenging but are gradually prevailing.

St. Regis Paper has made a strong start to the year, aided by the growth in
corrugated case material demand across Europe.  Waste paper prices in the UK
have remained steady during the quarter.  The division continues to benefit
from improvements in operating efficiencies.  The specialist mills remain
under pressure due to the weakness of the euro and the consequent pricing
pressures from European competitors.

Flat demand in the UK corrugated market has resulted in a mixed first quarter
for David S. Smith Packaging.  The heavy duty, decorative and sheet feeding
operations produced reasonable results but the mainstream corrugated
operations continued to face strong competition.  Against this backdrop it is
taking time to recover the corrugated case material price increases from the
first half of the calendar year and this lag has put pressure on margins.
Throughout the division the focus continues to be on cost reduction and
operational improvement and in June the loss making Bracknell corrugated box
plant was shut.

Kaysersberg Packaging, our continental European corrugated and paper division,
has started the year well, enjoying the benefits of buoyant corrugated demand
in mainland Europe.  Strong growth in sales and profit is being achieved at
Kaysersberg's French corrugated plants and Toscana Ondulati in Italy.  The
Polish operation is now profitable having benefited from the investment
programme which was recently completed.

The Plastics & Logistics division has also started the financial year
positively with good volume growth recorded at most operations.  The
Kaysersberg extruded plastics business in particular has had a good first
quarter and Formative Engineering, our recently acquired US injection moulded
plastic dispenser and tap business, is performing well.  The acquisition of
Rapak, a US supplier of bag-in-box liquid packaging systems, was completed in
August giving our bag-in-box business a much wider geographic presence.

Office Products

Strong sales growth is being recorded in all Spicers' office products
wholesaling operations.  This is mainly the result of higher sales of
electronic office supplies although most other product categories also showed
good increases over the same time last year.  Sales growth has accelerated
slightly in the established UK business whilst strong growth continued at
Spicers Ireland and Spicers France.  Good progress was also made in Germany.

In the office products manufacturing sector John Dickinson Stationery has
struggled in markets that, as a result of import pressure, remain particularly
competitive.  The reorganisation of the production process is largely complete
and efforts continue to improve all aspects of operational performance.

People

I am pleased to announce that Tony Thorne will be joining the Group on 1
January 2001 in the newly created position of Chief Operating Officer.  He
will be a member of the Board and will report to Peter Williams. It is
anticipated that Tony will succeed Peter Williams as Group Chief Executive
early in the next financial year at which time Peter will become Deputy
Chairman of the Group.  Tony was previously President of SCA Packaging's
Corrugated Business Division and prior to that worked for Shell.

It is with regret that I have to announce that Stuart Russell, Corporate
Services Director, has decided not to seek re-election at the AGM.  After
twelve years with the Group, Stuart has decided to take early retirement and
will leave at the end of this financial year.  We are very grateful for his
valuable contribution over this period.

Carolyn Cattermole will be joining the Group in November as Company Secretary
having previously held that  position at Courtaulds Textiles plc.

Michael Pragnell, after more than four years as a non-executive director, is
standing down at the conclusion of the AGM as a result of increased external
responsibilities which require him to reside abroad.  We thank him for his
contribution and wise counsel.

Finally, I can report two key divisional appointments.  Bob McLellan,
previously Managing Director of the Group's Abbey Corrugated operation, has
been appointed Chief Executive of the David S. Smith Corrugated Packaging
Division, reporting to Peter Williams.  Don Coates is appointed Chief
Executive of St. Regis Paper having previously been Managing Director of the
Group's mainstream corrugated plants.  Don will report to Sandy Stratton,
Executive Chairman of St. Regis Paper.

Outlook

We are encouraged by the solid start to the year.  Our paper and European
packaging  businesses and the office products distribution operations should
continue to benefit from the growth of the European economy and from our
investment programme.  Progress at our UK corrugated operations and at John
Dickinson Stationery will be slower.  Overall we believe that the Group is set
to deliver a satisfactory performance in the current year.


Enquiries:

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

Paul Froud, Group Communications Manager, David S. Smith (Holdings) PLC
020 7932 5000

Richard Mountain, Financial Dynamics
020 7831 3113