Sonoco display & packaging and flexibles business is its fastest growing market

Jack Sanders, CEO, Sonoco, said the strength of its consumer portfolio is due to multiple substrates, including rigid paper, plastics, flexible packaging, graphics management, displays and supply chain services.

Profits were up 8.1%

“In 2014, consumer-related sales grew 4.3% as strong volume gains in our display and packaging and flexibles businesses drove our growth​,” he said.

“Consumer-related operating profits were up 8.1% due to productivity improvements, a favorable price/cost relationship and the noted improved volumes​.  

“Flexible packaging is one of the premier packaging formats, accounting for nearly 20% of all global packaging and growing about 4% annually​.

“To meet growing customer demand for flexible packaging we recently completed an acquisition in Brazil and will soon be adding printing and laminating capacity in the US​.”

Sonoco completed its acquisition of a majority interest in Graffo Paranaense de Embalagens (Graffo), a flexible packaging business in Pinhais, Curitiba, Brazil this month.

Graffo had sales of approximately $35m in 2014 and operates rotogravure printing presses, including a 10-color press, and lamination applications. Graffo serves the confectionery, dairy, pharmaceutical and industrial markets in Brazil, and Sonoco expects to add to the operation's lamination capacity in 2016.

'Significant emerging market'

“Graffo is a perfect complement to our growth strategy as we were looking for a partner in Brazil with strong technical capabilities and established relationships with both large CPG’s and local businesses​,” added Sanders. 

“We were seeking a situation where we could bring our customer relationships and our technical capabilities to grow our presence in this significant emerging market​.”

He said its display and packaging segment is its most global consumer business with 27 facilities in the US, Poland, Mexico and Brazil. More than 60% of its sales from this business occurs outside of the US.  

“We remain optimistic the US economy will continue to improve in 2015 and international markets should begin to rebound as the year progresses​,” said Sanders. 

“That said our outlook for 2015 also projects headwinds from higher pension costs and a continued strengthening of the US dollar, which will create pressure on top-line growth and reported earnings​.”