Sonoco Implementing Price Increases for All Rigid Paper Containers and Closures

Rhea-AI Summary

Sonoco (NYSE: SON) announced a 5% price increase for all rigid paper containers and closures in North America, effective January 15, 2021. The decision, according to Vice President Ernest Haynes, is prompted by rising raw material costs and operational challenges due to the COVID-19 pandemic. Increased prices aim to recover costs associated with steel and recovered paper, as well as labor and inventory carrying expenses. Sonoco emphasizes its commitment to maintaining supply continuity for customers during these turbulent times.

Positive

• Implementing a price increase could stabilize revenue amidst rising costs.
• Commitment to maintaining supply continuity demonstrates strong customer relationships.

Negative

• Rising costs of raw materials could pressure profit margins.
• Operational challenges related to the COVID-19 pandemic may impact efficiency and costs.

HARTSVILLE, S.C., Dec. 10, 2020 (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 5 percent, effective with shipments on, and after, January 15, 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 raw materials used to produce rigid paper containers.

“Due to the rising cost of both steel and recovered paper, we are experiencing input cost pressures that simply cannot be absorbed,” Haynes said. “Our operational cost increases have been compounded by the on-going COVID-19 pandemic as it impacts labor, the build-up of inventory and associated carrying costs, which is all connected to ensuring the continuity of supply for our customers. As an essential supplier during these challenging times, our primary focus entails doing everything we can to protect our customers from business related disruptions. We take the challenge seriously in that regard and have embraced extraordinary measures to maintain continuity of supply to meet our customers’ most critical needs.”

Sonoco is one of the largest producers of rigid paper containers and closures in North America. For more information about Sonoco’s portfolio of rigid paper containers and closures, or to learn more about current pricing, please visit the Company’s website at www.sonoco.com, or contact the Company at 1-800-377-2692.

About Sonoco
Founded in 1899, Sonoco (NYSE: SON) is a global provider of a variety of consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services. With annualized net sales of approximately $5.4 billion, the Company has 23,000 employees working in approximately 300 operations in 36 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 ranked first in the Packaging sector on Fortune’s World’s Most Admired Companies for 2020 as well as Barron’s 100 Most Sustainable Companies. For more information, visit www.sonoco.com.

FAQ

What is Sonoco's recent price increase announcement about?

Sonoco announced a 5% price increase for rigid paper containers and closures in North America, effective January 15, 2021.

Why is Sonoco increasing prices for paper containers?

The price increase is necessary to recover rising costs of raw materials, including steel and recovered paper.

When will the new prices take effect for Sonoco's products?

The new pricing will take effect with shipments on or after January 15, 2021.

How does the COVID-19 pandemic affect Sonoco's operations?

The pandemic has led to increased operational costs related to labor, inventory management, and supply chain disruptions.

What kind of products does Sonoco offer?

Sonoco is a major producer of consumer and industrial packaging, including rigid paper containers and closures.