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Sonoco Announces New Consumer Growth Projects

Thursday, April 16, 2015

Press release from the issuing company

New Flexible Packaging Laminator and Press to Expand Operations in Texas, Ohio 

New Research and Development Facility Being Built on Hartsville, S.C. Campus

HARTSVILLE, S.C. - Sonoco, one of the largest diversified global packaging companies, announced today at its annual shareholders meeting that it will increase production capabilities and support R&D innovation through several significant growth projects for its Consumer Packaging businesses.

Jack Sanders, president and chief executive officer, announced Sonoco will spend approximately $20 million to purchase a new triplex laminator and rotogravure printing press. The new laminator will be placed in the Company's Franklin, Ohio, plant and encompasses the very latest in three-layer lamination technology to produce high-quality laminates with minimum material waste, across a wide range of flexible substrates with varying thicknesses and a variety of adhesive systems. The investment supports Sonoco's growth in the hot-fill pouch market and sophisticated lamination structures.

The new 11-color rotogravure press is based on the latest advances in registration control to allow for quick changeovers, thus improving production speeds and reducing waste while driving energy efficiency. The new press will be placed in the Company's Waco, Texas, plant and drive market growth using Sonoco's patented easy-open and reclose technology. Both the triplex laminator and rotogravure press are being purchased from Bobst Corporation and are targeted for startup in the second quarter of 2016.

These flexible packaging expansion projects are on top of the Company's recently completed acquisition of a majority interest in Graffo Paranaense de Embalagens S/A (Graffo), a closely held flexible packaging business located in Pinhais, Curitiba, Brazil. Graffo had sales of approximately $35 million USD in 2014 and operates high-quality rotogravure printing presses, including a new 10-color press, as well as sophisticated lamination applications at its Pinhais facility. Graffo serves the confectionery, dairy, pharmaceutical and industrial markets in Brazil, and Sonoco expects to add to the operation's lamination capacity in 2016.

Sanders also updated shareholders on investments the Company is making to expand composite cans in emerging markets. For instance, Sonoco is investing $20 million to build and start up a new composite can facility near Kuala Lumpur, Malaysia, to support the growing snack can market in Southeast Asia. Initial production will commence in the second quarter of 2015, with full production expected in early 2016. In addition, the Company expects to build a second composite can plant in the south of China later in 2015. This investment will triple Sonoco's capacity to meet local market demand when fully operational in early 2016.

$12 million R&D Investment Leading to Construction of New IPS Studio

Sanders also announced Sonoco is investing $11.9 million to build a new IPS (Innovative Packaging Solutions) research and development studio that will open in the third quarter of 2015 on its Hartsville, S.C., campus. The center will be a state-of-the-art research and development facility that will connect consumer insights to the invention of new consumer packaging.

Sanders said the IPS Studio will include a Consumer Interaction Studio that will allow live, direct observation of consumers interacting with products and packaging in areas representing retail, kitchen, living and bathroom environments. The facility will also contain collaboration spaces, where experts will interact with the latest technologies to turn ideas into packaging concepts. The concepts will include structural design and manufacturing to access potential for commercialization.

The center will feature rapid prototyping labs that will use the concepts in developing engineered prototypes. "We are focused on leveraging our design engineering and material science capabilities with rapid prototyping, including 3D printing capabilities, an FDA-registered food fill facility and a multi-platform pilot plant with manufacturing production capabilities for producing test-run packaging for our customers," he said.


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