Sonoco-Alcore, a wholly owned subsidiary of Sonoco Products Co. (SON) announced additional investment in three of its European uncoated recycled paperboard (URB) mills. The investment has been done in order to improve their energy efficiency, product range and environmental performance. The time scheduled for the completion of the project is August and September.
The investment is a part of the company’s long-term program to improve the product quality and make the mills cost-competitive, as these mills are the largest producers of coreboard in Europe. The company keeps sustainability and customer satisfaction at the forefront of its thinking and planning process.
Cirie mill in Italy will witness an installation of a new energy-from-biogas system, and CHP upgrades and an improvement of effluent treatment system. Also, there will be additional investment at its Kilkis, Greece, and Nordhorn, Germany, mills this summer.
Kilkis will receive a new high-efficiency boiler, heat recovery system and drive upgrades that will significantly lower energy costs and provide some capacity expansion. While at Nordom refining and press sections will be upgraded to further reduce the steam and electricity consumption for each ton of the high quality specialty board produced there.
Sonoco recently reported its fiscal 2011 second quarter results, delivering an EPS of 52 cents versus 58 cents in the year-earlier quarter. The quarter noted some special items including restructuring and impairment charges amounting to 7 cents and a cent pertaining to other adjustments.
Excluding these one-time items, adjusted EPS amounted to 60 cents versus 59 cents in the year-ago quarter, falling short of the Zacks Consensus Estimate of 63 cents. The earnings were more or less flat compared with last year; the company witnessed weaker-than-expected results in its industrial and consumer businesses.
Net sales increased to $1.13 billion in the reported quarter from $1.01 billion in the prior-year quarter. Though volume growth was modest, productivity improved marginally. We currently have a Zacks #4 Rank (short-term Sell recommendation) on the stock.
Hartsville, South Carolina-based Sonoco is a global manufacturer of consumer and industrial packaging products. The company has more than 300 operations in 35 countries throughout North and South America, Europe, Australia and Asia.
It operates through four reportable segments: Tubes and Cores/Paper, Consumer Packaging, Packaging Services and All Other Sonoco segment. Sonoco competes with Bemis Company Inc. (BMS) and Rock-Tenn Co. (RKT).
