Sonoco Announces Price Increase for Rigid Paper Containers and Closures

Rhea-AI Summary

Sonoco (NYSE: SON) announced a 9.5% price increase for all rigid paper containers and closures in North America, effective June 3, 2021. This decision, according to Ernest Haynes, is essential to address rapidly rising costs for key raw materials such as adhesives, laminate structures, recovered paper, and steel. The company aims to maintain supply continuity amidst supply chain challenges and inflationary cost pressures exacerbated by events like Winter Storm Uri. Sonoco operates globally, with annualized net sales of approximately $5.2 billion.

Positive

• Price increase of 9.5% may improve profit margins amidst rising raw material costs.
• Commitment to maintaining supply continuity is a positive sign for customer relationships.

Negative

• Rising inflationary costs for raw materials could impact margins if prices are not raised sufficiently.
• Supply chain disruptions continue to pose risks to operations and customer satisfaction.

HARTSVILLE, S.C., May 03, 2021 (GLOBE NEWSWIRE) -- Sonoco (NYSE: SON), one of the largest global diversified packaging companies, today announced it is increasing prices for all rigid paper containers and closures sold in North America by 9.5 percent, effective with shipments on, and after, June 3 , 2021.

According to Ernest Haynes, Division Vice President and General Manager, Rigid Paper and Closures, North America, this price increase is necessary to recover rapidly rising costs for key raw materials used to produce rigid paper containers and closures.

“Due to the rising inflationary cost of adhesives, laminate structures, recovered paper and steel, we are experiencing input cost pressures that simply cannot be absorbed,” Haynes said. “These inflationary cost increases have been compounded by the after-effects of Winter Storm Uri on the adhesives industry along with incredible demand in the steel marketplace. While we have taken extraordinary measures to protect our customers from supply chain related disruptions, it has not been without incurring significant material cost increases. As an essential supplier during the COVID-19 global pandemic, our primary focus requires doing everything we can to protect our customers from business related disruptions. Maintaining continuity of supply, regardless of the challenges we continue to face, remains a top priority.”

About Sonoco
Founded in 1899, Sonoco (NYSE: SON) is a global provider of consumer, industrial, healthcare and protective packaging. With annualized net sales of approximately $5.2 billion, the Company has 20,000 employees working in approximately 300 operations in 34 countries, serving some of the world’s best known brands in some 85 nations. Sonoco is committed to creating sustainable products, services and programs for our customers, employees and communities that support our corporate purpose of Better Packaging. Better Life. The Company was listed as one of Fortune’s World’s Most Admired Companies for 2021 as well as being included in Barron’s 100 Most Sustainable Companies for the third year in a row. For more information, visit www.sonoco.com.

FAQ

Why did Sonoco increase prices for paper containers and closures?

Sonoco raised prices by 9.5% to recover rapidly rising costs of key raw materials.

When will the price increase for Sonoco's products take effect?

The price increase will be effective for shipments on or after June 3, 2021.

What factors led to the price increase by Sonoco?

The price increase is due to inflationary costs of adhesives, laminate structures, recovered paper, and steel.

What is Sonoco's annualized net sales figure?

Sonoco's annualized net sales are approximately $5.2 billion.

How is Sonoco addressing supply chain challenges?

Sonoco is focused on maintaining supply continuity to protect customers from business disruptions.