Displaying items by tag: sonoco

Tuesday, 08 November 2011 22:10

Sonoco Completes Acquisition of Tegrant Corporation

Sonoco one of the largest diversified global packaging companies, today announced that it has completed the acquisition of Tegrant Corporation, a leading provider of highly engineered protective, temperature-assured and retail security packaging solutions, from Metalmark Capital for $550 million.

According to Harris E. DeLoach, Jr., Sonoco chairman and chief executive officer, the acquisition of Tegrant has created a North American leader in multi-material protective packaging with more than 40 years of industry experience. Sonoco's Protective Packaging businesses operate nearly 40 manufacturing, design and testing facilities in the United States, Mexico, Puerto Rico and Ireland, with estimated annualized net sales of $540 million.

"We are pleased to welcome Tegrant's businesses and its more than 2,000 employees to the Sonoco family," said DeLoach. "Sonoco's new Protective Packaging segment combines our strong application engineering capabilities and problem-solving expertise to help deliver custom-engineered protective packaging solutions to a variety of growing consumer and industrial markets. Sonoco Protective Packaging now has leading positions in fast growing markets, including medical devices, pharmaceuticals, automotive components and health and beauty products, along with expanded access to a variety of industrial markets."

Sonoco's new Protective Packaging segment includes four businesses. Protexic(TM) Brands, the largest business, is North America's premier manufacturer of molded expanded foam. It serves a number of industries, including high technology, consumer electronics, automotive, appliances and medical devices. ThermoSafe(R) Brands is the world's leading provider of temperature-assured solutions, primarily used in packaging temperature-sensitive pharmaceuticals and food. Alloyd Brands(R) is a leading manufacturer and designer of high-visibility packaging, printed products and blister packaging machines for retail and medical markets. Sonoco's existing protective packaging business is a leading provider of custom-designed paper-based packaging solutions for household appliances, heating and air conditioning units, home and office furniture, lawn and garden equipment, and a variety of other consumer products.

Financings Update

In preparation for completing the Tegrant acquisition, Sonoco previously issued $500 million of new senior unsecured notes consisting of $250 million of 4.375% Notes due 2021 and a reopening of its 5.75% Notes due 2040 for $250 million.

Additionally, the Company recently entered into a $150 million three-year Term Loan Agreement, using a substantial portion of the proceeds to reduce outstanding commercial paper.

Merrill Lynch, Pierce, Fenner & Smith Incorporated; J.P. Morgan Securities, LLC; and Wells Fargo Securities, LLC acted as joint book-running managers for the Notes offering.

The lenders under the Term Loan include Bank of America, N.A.; J.P. Morgan Chase Bank, N.A.; and Wells Fargo Bank, N.A. Bank of America is also the administrative agent and Merrill Lynch, Pierce, Fenner & Smith Incorporated; J.P. Morgan Securities LLC; and Wells Fargo Securities LLC are joint lead arrangers.

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Sonoco Recycling, Inc., a wholly owned subsidiary of Sonoco (NYSE: SON) and one of the largest packaging recyclers in North America, has announced that it has been awarded a 10-year contract to operate the Onslow County, N.C., materials recovery facility (MRF). The Company plans to invest $1 million in facility upgrades.

"We are very excited to work with the County," said Jim Brown, vice president, Sonoco Recycling. "Residents of Coastal North Carolina will now have access to expanded, single-stream, or commingled, recycling, increasing the types of materials they are able to recycle.

"We also plan to build an education center at the County's MRF, developing recycling education efforts in and around Onslow County through partnerships with local schools and public education programs at the facility."

A recycling leader with locations and expertise worldwide, Sonoco Recycling annually collects more than 3 million tons of old corrugated containers, various grades of paper, metals and plastics. In addition, the Company has experts who provide secure, reliable and innovative recycling solutions to residential and commercial customers.

Currently, Sonoco Recycling operates six MRFs and serves more than 125 communities in which curbside-collected residential and commercial materials are processed. The Company also provides recycling programs which identify waste reduction opportunities that reduce operating expenses for many of the largest consumer product companies in the U.S.

SOURCE: Sonoco Recycling, Inc.

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Acquisition of MRF will expand Sonoco Recycling's footprint in the Upstate

Sonoco Recycling, Inc., a wholly owned subsidiary of Sonoco and one of the largest packaging recyclers in North America, announced today that it has completed the acquisition of American Recycling of South Carolina's Greenville location, a large material recovery facility (MRF). The new facility is expected to significantly increase Sonoco Recycling's ability to meet rising demand in the Upstate.

"With this acquisition, Sonoco Recycling has significantly expanded its single-stream recycling capabilities in the Upstate," said Jim Brown, vice president, Sonoco Recycling. "The Greenville MRF will help accelerate Sonoco Recycling's current goal of doubling the volume of tons collected by 2014."

The acquisition of the Greenville facility as Sonoco Recycling's fifth MRF will expand Sonoco's operations in one of the largest metro cities in South Carolina, securing its position as South Carolina's recycling industry leader. The Company already has operations in Charleston, Columbia and Spartanburg.

Currently, Sonoco Recycling's reclamation rates in South Carolina save approximately 843,000 cubic yards of landfill space, equating to enough landfill space for the annual disposal needs of over one million South Carolinians. The Company is heavily involved in numerous environmental initiatives such as the Carolina Recycling Association and the Southeastern Recycling Coalition; and participates as an environmental partner in local activities such as the S.C. Green Steps school program.

Founded in 2003, American Recycling of South Carolina, LLC is a leading processor of recyclable materials in the Southeast, with plastics and various grades of paper comprising the majority of processed materials. The facility offers services to all types of recovered material generators, including commercial printers, office complexes, municipalities, manufacturing and distribution facilities, commercial shredding companies, paper converters and merchants; providing flexible, customized programs that help clients increase efficiency, reduce waste and optimize their environmental stewardship.

A recycling leader with locations and expertise worldwide, Sonoco Recycling annually collects more than 3 million tons of old corrugated containers, various grades of paper, metals and plastics. In addition, the Company has experts who provide secure, reliable and innovative recycling solutions to residential and commercial customers. Sonoco Recycling operates five material recovery facilities (MRFs) and serves more than 125 communities in which curbside-collected residential and commercial materials are processed. The Company also provides recycling programs which identify waste reduction opportunities that reduce operating expenses for many of the largest consumer product companies in the U.S. 

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Sonoco, one of the largest diversified global packaging companies, has been rated the top packaging company and the top company in the Materials Sectors in Newsweek magazine's 2011 Green Rankings, which assess the United States' largest 500 public companies on their environmental footprint, environmental policies and reputation. Sonoco was also rated 202nd overall, placing the Company in the Green Ranking's top 40 percent for the third consecutive year.

To create the 2011 Green Rankings, Newsweek collaborated with leading environmental research providers Trucost and Sustainalytics to evaluate each company's environmental footprint, management of that footprint and transparency. Trucost used publicly disclosed environmental data to evaluate company performance on more than 700 environmental impact metrics and determine each company's environmental impact score. Sustainalytics also evaluated the policies, programs, targets and certifications each company uses to manage its environmental performance. And, to benchmark each company's performance against its industry peers, Sustainalytics supplemented more than a dozen core environmental indicators with over 40 sector-specific indicators. The 500 companies included in the 2011 Green Rankings are the largest U.S. companies as measured by revenue, market capitalization and number of employees.

"We are extremely pleased to have our commitment to setting the standard for sustainability in the packaging industry recognized again this year and to be ranked the top company in the Materials Sector," said Harris E. DeLoach, Jr., Sonoco chairman and chief executive officer. "It is also very gratifying for our employees and other stakeholders to be rated so highly, given the extensive and detailed research involved in developing the Green Rankings."

More information about Sonoco's environmental commitment can be found at http://www.sonoco.com/sustainability.aspx.

The full list of Newsweek's 2011 Green Rankings can be found at http://www.thedailybeast.com/newsweek/2011/10/16/green-rankings-2011.html.

SOURCE: Sonoco

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Thursday, 20 October 2011 10:00

Sonoco Reports 2011 Third Quarter Results

Sonoco (NYSE: SON), one of the largest diversified global consumer and industrial packaging companies, today reported results for its third quarter ending October 2, 2011.

Third Quarter Highlights

  • Third quarter 2011 GAAP earnings per diluted share were $.76, compared with $.57 in 2010, including a $.10-per-diluted-share gain stemming from a net release of valuation allowances on deferred tax assets, partially offset by restructuring charges and acquisition expenses.
  • Base net income attributable to Sonoco (base earnings) for third quarter 2011 was $.66 per diluted share, compared with $.65 in 2010. (See base earnings definition and reconciliation later in this release.)
  • Third quarter 2011 net sales were $1.12 billion, up 7 percent, compared with $1.05 billion in the third quarter of 2010.
  • Base earnings guidance for fourth quarter 2011 is estimated at $.59 to $.63 per diluted share and $2.41 to $2.45 per diluted share for full-year 2011.

Third Quarter Review

Commenting on the Company's third quarter results, Chairman and Chief Executive Officer Harris E. DeLoach, Jr. said, "Despite slowing global economic conditions, our third quarter base earnings were essentially flat with last year and up 10 percent from the second quarter of 2011. Compared to the prior year third quarter, volume declined slightly, particularly in our more economic-sensitive industrial businesses, and we continued to see a negative mix in many of our businesses. Even though we faced raw material, energy and freight cost headwinds, the price/cost relationship for the quarter was only slightly negative. We were helped by productivity improvements, although not up to our historic levels, and lower selling and administrative costs.

"Our Consumer Packaging segment's operating profits were 35 percent higher, when compared to the second quarter and slightly better than last year's third quarter. Improved productivity, volume gains and cost reduction efforts offset a negative price/cost relationship. In our Packaging Services segment, results were up year over year; however, results were down sequentially from the second quarter as improved point-of-purchase display volume and fulfillment activities could not offset previously announced lost contract packaging business.

"Our industrial-focused businesses had mixed results, as our Tubes and Cores/Paper segment's third quarter operating profits were down 10 percent year over year and 9 percent sequentially. Results for the quarter were impacted by lower global volume for tubes and cores along with an unfavorable mix of business. These negative factors were partially offset by productivity improvements. All Other Sonoco, which primarily includes industrial-related businesses, showed a 6 percent improvement in operating profits year over year and a 7 percent improvement sequentially, due primarily to productivity."

Third quarter GAAP net income attributable to Sonoco was $77.2 million, or $.76 per diluted share, in 2011, compared with $59.0 million, or $.57 per diluted share, in 2010. Base earnings were $67.1 million, or $.66 per diluted share, in the third quarter of 2011, compared with $67.1 million, or $.65 per diluted share, in 2010. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.

Items excluded from base earnings in the 2011 third quarter include: a net $18.8 million, or $.18 per share, reduction in tax expense resulting from valuation allowance adjustments on deferred tax assets; restructuring expenses of $7.2 million, after tax, or $.07 per share, primarily due to the closures of a tubes and cores plant and a plastics facility; and acquisition-related costs of $1.5 million, after tax, or $.01 per share. Excluded from base earnings in the third quarter of 2010 were impairment and restructuring charges of $6.9 million, after tax, or $.07 per share, primarily related to impairment charges in the Company's Flexible Packaging unit, and $1.1 million, after tax, or $.01 per share, in acquisition-related costs.

Net sales for the third quarter were $1.12 billion, compared with $1.05 billion in the same period in 2010. This 7 percent increase was due to higher selling prices and favorable foreign currency translation, partially offset by a negative mix of business. The impact of higher selling prices was realized primarily in the Tubes and Cores/Paper and Consumer Packaging segments, principally driven by higher recovered paper and resin prices.

The Company's gross profit margin in the third quarter of 2011 was 16.6 percent of sales, compared with 19.0 percent in the same period in 2010. The decline was primarily due to lower volume, a negative shift in the mix of business and higher labor and other costs. The Company's selling and administrative costs declined 12 percent year over year, primarily due to lower management incentive and pension costs, a gain from life insurance proceeds, cost controls and the net impact of foreign exchange.

Cash generated from operations in the third quarter was $100 million, compared with $145 million generated in the same period in 2010. Capital expenditures and cash dividends were $44 million and $29 million, respectively, during the third quarter, compared with $42 million and $28 million, respectively, during the third quarter of 2010.

Learn more downlaod the full report below

SOURCE: Sonoco

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Transaction Will Create a North American Leader in Protective Packaging

Sonoco, one of the largest diversified global packaging companies, today announced that it has signed a definitive agreement to acquire Tegrant Corporation, a leading provider of highly engineered protective, temperature-assured and retail security packaging solutions, from Metalmark Capital for $550 million in cash. The final consideration is subject to a normal adjustment of net working capital.

According to Harris E. DeLoach, Jr., Sonoco chairman and chief executive officer, the acquisition of Tegrant is the largest in Sonoco's history and will create a North American leader in multimaterial protective packaging. Tegrant is projected to generate 2011 sales of approximately $440 million. When combined, Sonoco is projected to generate sales of approximately $5.0 billion in 2012. The transaction is expected to be accretive to Sonoco's 2012 pro forma earnings by approximately $.10 per diluted share, including estimated adjustments for purchase accounting and approximately $11 million of expected synergies, when fully realized.

The total purchase consideration, adjusted for expected tax benefits, is approximately 6.8 times Tegrant's estimated pro forma 2011 EBITDA of approximately $74 million1, including synergies. The transaction is expected to be financed from existing cash and debt with an estimated credit leverage ratio of 2.2 times at closing. Sonoco intends to reduce the incremental debt using free cash flow over the next few years. The acquisition is subject to normal regulatory review and is expected to close in November 2011.

Tegrant is headquartered in DeKalb, Ill., and operates three strategic business units. Protexic(TM) Brands, the largest business unit, is North America's premier manufacturer of molded expanded foam. It serves a number of industries, including high technology, consumer electronics, automotive, appliances and medical devices. Tegrant's ThermoSafe(R) Brands unit is the world's leading provider of temperature-assured solutions, primarily used in packaging temperature-sensitive pharmaceuticals and food. Tegrant's Alloyd Brands(R) business unit is a leading manufacturer and designer of high-visibility packaging, printed products and blister packaging machines for retail and medical markets. Tegrant operates more than 30 manufacturing, design and testing facilities in the United States, Mexico and Ireland and employs more than 2,000 employees.

"The addition of Tegrant and its family of businesses significantly advances Sonoco as a protective packaging solutions leader and greatly expands the products, services and capabilities we can offer our customers," said DeLoach.

"Sonoco's combined Protective Packaging businesses will represent approximately 11 percent of Sonoco's projected 2012 sales and further enhance our ability to grow in both consumer and industrial markets globally. As an example, Tegrant brings to Sonoco immediate access to faster growing markets such as medical devices, pharmaceuticals, and health and beauty, while providing us expanded access to a variety of industrial components and automotive markets."

DeLoach said that Tegrant's president and chief executive officer, Ron Leach, has agreed to stay with Sonoco and continue leading Tegrant's businesses. John Colyer, Sonoco's vice president, Global Industrial Converting, will be given expanded responsibility for the Company's global protective packaging, tubes and cores, and wire and cable reels integration leader for the combined Sonoco Protective Packaging businesses.

Macquarie Capital served as financial advisor to Sonoco. Tegrant was represented by Sagent Advisors.

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Sonoco-Alcore S.a.r.l., a wholly owned subsidiary of Sonoco (NYSE: SON), one of the largest diversified global packaging companies, today announced the opening of its new paper tube and core manufacturing facility in Grünsfeld, Germany. The new Grünsfeld plant will focus its production on M-Core(TM) wide-ply paper mill cores used in the high-end segment of the paper industry.

"Investment in this new facility is primarily about responding to the changing market needs in the European paper industry," said Adam Wood, vice president of Sonoco-Alcore. "European printing houses have evolved, using wider printing presses and increased running speeds, which means traditional paper mill cores must evolve also."

"With the Grünsfeld facility, we have invested in bringing this technology to Germany, meeting the needs of Central European paper mills and allowing our customers to better supply print houses with a cost-effective, quality product."

Sonoco-Alcore developed wide-ply paper technology and the M-Core Series to produce a core with improved properties such as increased dynamic strength and e-modulus, meeting the requirements of new printing machines.

Europe's leading paper tube and core producer, Sonoco-Alcore places a strong emphasis on investing in the resources necessary to ensure the continued success of its customers and operates 29 tube and core plants and six paper mills in Europe.

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Sonoco (NYSE: SON), one of the largest diversified global packaging companies, will host its regular quarterly investor conference call on Thursday, October 20, 2011, at 11 a.m. Eastern time, to review its financial results for the third quarter. Participants from Sonoco will include Harris E. DeLoach, Jr., chairman and chief executive officer, Barry L. Saunders, vice president and chief financial officer, and Roger P. Schrum, vice president, investor relations and corporate affairs. Sonoco intends to issue a news release reporting its third quarter 2011 financial results at 7:30 a.m. Eastern time, on Thursday, October 20, 2011.

The live investor conference call webcast can be accessed via the Internet at http://www.sonoco.com, under the Investor Relations tab. Those planning to participate should plan to connect to the live webcast at least 10 minutes prior to the start. Those interested in participating in the live interactive call should contact Sonoco Investor Relations at +843-339-6748 to register. A telephonic replay of the call will be available starting at 2 p.m. Eastern time to U.S. callers at 888-286-8010 and international callers at +617-801-6888. The replay passcode for both U.S. and international calls is 50037713. The archived call will be available through January 20, 2012.

Annual New York Analyst Meeting Information

Sonoco's 2011 meeting with the financial community will be held at the Grand Hyatt in New York City, on Friday, December 2, 2011, at 7:30 a.m. Eastern time. To register for this event, call +843-339-6748.

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Sonoco (NYSE: SON) announced today that its Trident division, which provides print tooling and global graphics management, has entered into a strategic alliance with Janoschka, a German-based global supplier of prepress solutions and tooling, to provide global consumer products goods companies and rotogravure printers with the widest coverage area available in the market.

According to Bob Carroll, Trident general manager, the two companies will share technologies and communication systems to ensure global consumer products goods companies with fast, effective and consistent management of all their rotogravure tooling requirements.

Based in Hull, England, Trident and its 450 associates operate global graphics management systems from nine locations across Europe, Asia and North America, and have print tooling capability in three locations in the United States and Canada.

Janoschka, headquartered in Kippenheim, Germany, has significant expertise in the prepress area and, with more than 1,400 employees plus an annual turnover of 115 million euros, is among the global market leaders in its sector. Specializing in the packaging, tobacco and décor market, Janoschka's client base includes renowned global printing companies and international brand owners. As a full-service prepress provider, Janoschka has a comprehensive product range, and based on wide-ranging technical know-how and long-standing experience, offers printing tools for gravure and flexo printing, embossing rollers, artwork and reproduction, color management, cylinder bases and more. The company, which was formed in 1976, and continues to be family run, is represented globally through 26 subsidiaries in 12 countries across Europe, Asia, and South and Central America. More information on the company is available at http://www.janoschka.com.

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Sonoco Recycling, a wholly owned subsidiary of Sonoco (NYSE: SON) and one of the largest packaging recyclers in North America, today announced the launch of its Sonoco Sustainability Star Award program.

Created to recognize customer and Sonoco facilities for achieving significant milestones in landfill diversion and waste stream reduction, the program is comprised of three tiers:

  • Gold recognizes facilities that have achieved 99% landfill diversion.
  • Silver is awarded to facilities achieving 95% landfill diversion.
  • Bronze recognizes facilities that have made significant waste reduction achievements, such as drastically reducing their waste streams or implementing a new composting system.

"With the increasing importance placed on sustainability by both Sonoco and our customers, we felt compelled to create a program that would recognize those facilities that take considerable steps to achieve higher levels of sustainability," said Jim Brown, vice president, Sonoco Recycling.

"To date, we've experienced great success in helping our customers - in targeted facilities - significantly reduce their landfill waste or become landfill free. We fully expect this program will encourage even more of our customers to strive for significant reductions in landfill waste. Additionally, by recognizing the efforts of our own facilities, the new Sonoco Sustainability Star Award program furthers Sonoco's goals of achieving landfill-free status at 10 percent of our plants by 2015."

Plants and customers who have achieved landfill-free status prior to the program's implementation will be recognized retroactively. Sonoco Sustainability Star Award winners to date include the following plants, all at Gold level:

Boeing, North Charleston, S.C.

Kraft Foods, Suffolk, Va.

Cascades Sonoco, Birmingham, Ala.

P&G, Auburn, Maine

Kraft Foods, Philadelphia, Pa.

Unilever, Suffolk , Va.

Kraft Foods, LeHigh Valley, Pa.

The Sonoco Sustainability Award program will be administered through Sonoco Recycling and Sonoco Sustainability Solutions, LLC (S3). With a knowledge base informed by more than a century of experience as a global packaging leader and innovative recycler, S3 is uniquely qualified to find alternative recycling solutions for waste that was previously thought to be unrecyclable. Today, some of the world's most successful manufacturers and retailers rely on S3 to create and implement sustainable business solutions in their facilities.

A recycling leader with locations and expertise worldwide, Sonoco Recycling annually collects more than 3 million tons of old corrugated containers, various grades of paper, metals and plastics. In addition, the Company has experts who provide secure, reliable and innovative recycling solutions to residential and commercial customers. Currently, Sonoco Recycling operates three material recovery facilities (MRFs) serving more than 125 communities in which curbside-collected residential and commercial materials are processed. The Company also operates recycling programs which identify waste reduction opportunities that reduce operating expenses for many of the largest consumer product companies in the U.S.

Learn more about the Sonoco Sustainability Star Awards program at http://www.sonoco.com/productsservices/sonocorecyclinginc/sustainabilitystarawards.aspx.

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