Sonoco (SON) Arm to Hike Prices for Paper-Based Tubes & Core
Sonoco Alcore S.a.r.l., a wholly owned subsidiary of Sonoco Products Co. SON, has announced a price hike of up to 7% for paper-based tubes and cores in Europe. The price increase, which will be effective with shipments beginning in February 2018, has been made to counter price rise in OCC (old corrugated containers) in a number of European countries.
OCC prices across Europe have reportedly soared a whopping 250% over the past 10 years. This follows the continued rise in coreboard prices, stemming from strong demand and elevated recovered paper and energy costs. Higher OCC recovery rate will escalate OCC collection costs, along with rising transportation and labor costs. An increase in costs can adversely affect Sonoco’s business and financial results. The company also uses derivatives to mitigate some of the impact of raw material and energy-cost fluctuations.
Paperboard tubes and cores are the key elements of Sonoco’s Paper and Industrial Converted Products segment. The segment, which serves its markets through 177 plants on five continents, accounted for approximately 35% of Sonoco’s consolidated net sales in 2016.
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