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Sonoco (SON) Unit to Raise Paperboard Prices Across Europe

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Sonoco Products Co.’s SON wholly owned subsidiary, Sonoco Alcore S.a.r.l. has announced a price hike by $44.67 (€40) per ton on all recycled paperboard grades sold in the company’s Nordic, Central European and Greek regions. The price rise will be effective on shipments from or after Oct 17, 2016.

The price increase has been driven by the continuous rise in raw material costs. Sonoco is experiencing the price effect across all European countries. This price hike will help combat rising cost as well as in passing it through to the market.

In 2015, Sonoco had the capacity to manufacture approximately 1.8 million tons of recycled paperboard. The company’s Paper and Industrial Converted Products segment, Europe manufactures paperboard tubes and cores, fiber-based construction tubes and forms, and recycled paperboard and linerboard.

SONOCO PRODUCTS Price

SONOCO PRODUCTS Price | SONOCO PRODUCTS Quote


Over the past few years, persistently high unemployment and a slowdown in China and other developing countries, along with geopolitical developments/conflicts in Eastern Europe and the Middle East, have negatively affected European demand in both the continental and export markets.

Despite the resultant pressure on the operations of this reporting unit, management has been able to hold local currency financial performance relatively steady. In addition to its ongoing efforts to optimize plant footprint and cost structure within Europe, management believes the company should be able to grow at or above the Eurozone’s projected GDP growth rates and continue to mitigate the impact of these factors.

In early September, Sonoco Alcore announced a price hike for paper-based tubes and cores by up to 8%, depending on product category, for all customers in Europe. The hike will be effective from shipments beginning Oct 1, 2016.

South Carolina-based Sonoco is a global provider of a variety of consumer packaging, industrial products, protective packaging and packaging supply chain services. The company is also the largest producer of paper-based tubes and cores in North America.

At present, Sonoco carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same industry include Berry Plastics Group, Inc. BERY, Packaging Corporation of America PKG and UFP Technologies, Inc. UFPT. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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