Sonoco Products believes you can judge a container by its packaging. The company is one of the world's largest makers of industrial and consumer packaging used by the food, consumer goods, construction, and automotive industries. Its consumer packaging segment produces round and shaped composite cans for snack foods, powdered beverages, pet food, and more. Sonoco makes flexible and rigid packaging (paper and plastic) for food, personal care items, and chemicals, and it produces paperboard tubes and cores, too, for industrial protective packaging. The company's end-to-end packaging services include co-packing and fulfillment, supply chain management, and point-of-purchase display design/assembly.
Sonoco operates through almost 350 locations around the world in nearly 35 countries concentrated in Canada, Europe, and the US. Around 60% of its total sales are generated from the US each year. Sonoco's international sales are concentrated in Canada (almost 10%), followed by Europe and other regions (South America, Australia, and Asia).
The company divides its business structure into four chief business segments. Its two largest segments -- Consumer Packaging and Paper & Industrial Converted Products -- each represented 43% of its total sales for 2011. Packaging Services generated 10% of sales, while Protective Packaging, its newest segment, earned 4%.
Sonoco's balance sheet has been marked by steady growth over the last few years. From 2010 to 2011 revenues increased by 9%, from $4.1 billion to almost $4.5 billion, a milestone figure. Net income, too, reached historic levels; from 2010 to 2011 it increased by 7% from $201 million to $217 million. The uptick in Sonoco's performance is attributable to higher sales volumes across all business segments as well as acquisitions. Its increase in net income was also helped by lower selling, general, and administrative expenses.
The company's goal is to reach $5.5 billion to $6 billion in sales over the next three or four years. It plans to achieve this by growing its existing products and services portfolio by $300 million and new product sales by $350 million. It also expects future acquisitions to contribute an additional $500 million in annual sales.
In 2011 Sonoco completed its largest acquisition to date, paying $550 million for Tegrant Corporation, a manufacturer of foam-based packaging products with plants in the US, Mexico, and Puerto Rico. The deal created one of the largest protective packaging businesses in North America and launched Sonoco's Protective Packaging segment. Looking to grow in the food and beverages market, Sonoco in 2010 obtained Associated Packaging Technologies (APT), a maker of thermoform trays used in packaging frozen foods. APT expanded Sonoco's consumer packaging manufacturing footprint with four facilities (two in the US and one each in Canada and Ireland).
Inherit to its strategy are the company's ongoing efforts to improve its operating structure and keep a lid on costs. In 2011 Sonoco closed two packaging facilities in Canada, a tube and core facility in France, and a fulfillment service center and a point-of-purchase display manufacturing location in the US. It also sold a plastics operation in Brazil and a tubes and cores operation in the US. – less