Business

Sonoco is to close 12 factories worldwide and shed 540 jobs in a move to swing its manufacturing emphasis towards consumer packaging rather than industrial applications.

The multinational refused to say which plants would shut but most of the restructuring would focus on Europe, said Harris DeLoach, chief executive of the South Carolina-based group. The restructuring is due for completion by the end of 2007.

Sonoco has recently said that it would acquire the remaining 35.5 per cent interest of the European-based Sonoco-Alcore joint venture from Ahlstrom.

This joint venture combined the tubes and cores and paper manufacturing operations of Sonoco and Ahlstrom in Finland, which operates around 30 tube and core plants and seven paper mills across Europe.

Meanwhile, Sonoco has bought Cin-Made Packaging Group, the US-based maker of rigid paperboard composite containers and drums in Cincinnati with revenues of around £5.3m ($10m).

“The deal gives us a new rigid paper liner product that we didn’t have, and which we can extend to our existing customer base,” said corporate communications director Roger Schrum.

“This acquisition forms an integral part of our strategy of growing our consumer packaging business. We are working to reverse the 60 per cent to 40 per cent balance in favour of industrial to consumer packaging. The factories due for closure are mainly industrial in focus."


Sonoco results
Sonoco has offset higher energy, freight and labour costs by creating a good balance between the sale prices of its products and materials costs to boast strong third-quarter results. Sonoco is a £1.8bn ($3.5bn) business with more than 300 operations in 35 countries

- Net sales for the quarter rose nearly 6 per cent to £497m ($932m) against last year

- Net income for the quarter rose 33 per cent to £33m ($61m) against last year

- Net sales for the first nine months rose 3.6 per cent to £1.4bn (£2.7bn) against last year

- Net income for the first nine months rose 26 per cent to £83m ($156m) against last year