Page 39 - Plastics News April 2021

Business news

Sonoco sells its display and Reliance, BP seek buyers for

packaging business natural gas from KG-D6 block
offshore
S-based packaging
Ucompany Sonoco has eliance Industries and its partner BP are seeking
sold its domestic display and
packaging business to mill- Rbuyers for natural gas produced from the KG-
to-market company Hood D6 block located in the Krishna-Godavari basin of
Container. The transaction the Bay of Bengal on the eastern coast of India.
is valued at $80m in Covering an area of 8,100km², the block is owned
cash. Based in Winston- and operator by Reliance Industries with 66.6% stake
Salem, North Carolina, while BP owns the remaining 33.3% interest.The KG-
the display and packaging D6 Block integrated development project involves
business specialises in the development of three new deepwater fields,
point-of-purchase display namely R-Cluster, Satellites Cluster and MJ.Reliance
design, manufacturing and intends to sell 5.5 million standard cubic meters
fulfilment. The business also offers contract packaging per day of additional natural gas produced from the
services for consumer product customers, with more than eastern offshore KG-D6 block, reported Press Trust of
250 brands.It currently operates eight manufacturing and India (PTI) As per the tender document, the partners
fulfilment facilities and four sales and design centres, plan to start gas supply from late April or early May
employing around 450 people.Last year, it produced while the e-auction is scheduled for 23 April 2021.
net sales of around $135m. Sonoco president and CEO The lowest bid and highest acceptable bid would be
Howard Coker said: “Our US Display and Packaging minus $0.3 per million British thermal unit and JKM
business has been an industry pioneer, with a legacy plus $2.01 per Metric Million British Thermal Unit
of providing innovative solutions for complex supply (mmBtu) respectively. Over a supply tenure of three
chain challenges. “But Sonoco is focused on growing to five years, the bidders can seek minimum supply
our core Consumer and Industrial packaging businesses volume of 0.01 mmscmd with maximum being the full
around the world. By divesting this business, we expect offer volume. Although the lowest price for the gas
to apply proceeds to further invest in ourselves while
returning value to our shareholders.” Rothschild and
Co served as financial adviser for Sonoco during the
transaction while Haynsworth Sinkler Boyd acted as
legal adviser. Based in Atlanta, Georgia, Hood Container
is an integrated paperboard and speciality paper
manufacturer specialising in containerboard, kraft paper,
corrugated boxes, high-graphic displays and contract
packaging, corrugated, folded box and displays. In
December, Sonoco divested its Europe contract packaging
business to a subsidiary of Wisconsin-based contract
packaging and contract manufacturing firm Prairie
Industries Holdings for $120m in cash. That month, the offered by RIL-BP has a current price of around $6.5
company also joined Holy Grail 2.0, a digital watermarks per mmBtu, the selected bidders will be entitled to
initiative to deliver on sustainability goals. In August, a $3.62 per mmBtu maximum ceiling for six-month
Sonoco acquired France-based sustainable packaging period to 30 September 2021, as fixed by the Indian
company Can Packaging for €41.7m ($49.3m).The deal government. By 2023, the total gas production from
was intended to expand Sonoco’s sustainable paperboard the three fields is expected to reach one billion cubic
packaging offerings to various consumer food brands feet a day (bcfd).
serving the European market.

39 April 2021 Plastics News