Page 35 - Plastics News May 2021

Business news

Sonoco reports 3.8% increase in Constantia Flexibles to acquire

first-quarter net sales packaging producer Propak

S-based packaging lexible packaging company Constantia Flexibles has
Ucompany Sonoco has Fagreed to purchase packaging manufacturer Propak
reported net sales of $1.35bn for an undisclosed sum.Located in Dücze, Turkey,
for the first quarter of the Propak produces packaging for the snacks market.
year. The figure represents It operates from one plant with approximately 360
a 3.8% increase from $1.3bn employees. Propak will add flexo printing capabilities
registered a year prior. and complement Constantia ASAS, the company’s plant
The company attributed in Ankara, Turkey. Additionally, it will support business
the increase to a 3.5% growth by providing access to an adjacent market
improvement in volume and segment and strengthen Constantia Flexibles’ position
mix supported by two extra in the European snacks market. Constantia Flexibles CEO
shipping days in the quarter, as well as higher selling Pim Vervaat said: “The acquisition of Propak fits perfectly
prices. But its generally accepted accounting principles in our Vision 2025 growth strategy and brings Constantia
(GAAP) net income in the quarter fell to $72.3m, Flexibles a good platform in the growing European snacks
compared to $80.4m a year earlier. Sonoco’s first-quarter market.“It will also give us the opportunity to accelerate
GAAP earnings included after-tax non-base net charges our more sustainable EcoLam Mono-PE innovation for the
totalling $19.4m. The company’s gross profit in the first salty snacks market. I am looking forward to working
quarter of this year was $277.9m, compared to $266.6m with the management team at Propak in helping to bring
a year earlier. Sales for Sonoco’s Consumer Packaging the company to the next level.” The deal is subject to
segment were $582.8m for the quarter, up from $540.6m regulatory approvals and expected to complete in the
in the first quarter of last year. The company’s Industrial second quarter of 2021. French investment firm Wendel
Paper Packaging segment also reported a year-on-year acquired a controlling stake in Constantia Flexibles
growth, with sales increasing from $502.5m to $565.4m. in March 2015. This acquisition is one of the largest
The sales of all other remaining businesses, which transactions that Constantia Flexibles has made so
include healthcare, protective and retail packaging far since then with Wendel as reference shareholder.
and industrial plastic products, amounted to $205.2m,
registering a decline of 21.2%. Sonoco president and CEO
Howard Coker said: “I’m extremely proud of how our
Sonoco team came together in the first quarter to work
through the challenges stemming from severe winter
weather and global supply chain disruptions to meet the
critical needs of our customers while delivering a better
than expected start to the year.“Sonoco’s bottom line
results benefitted overall from productivity gains and
improved volume and mix, helped by two extra shipping
days in the quarter. “These positive factors were more
than offset by a negative price and cost relationship
stemming from higher raw material costs, and freight Constantia Flexibles has approximately 8,300 employees.
and other non-material inflation lessened the impact of It manufactures tailor-made packaging solutions at 37
businesses sold and acquired in the last twelve months.” sites in 16 countries. Last week, Constantia Copenhagen
Earlier this month, Sonoco sold its domestic display opened a fully automated production site of in Ishøj,
and packaging business to mill-to-market company Denmark. The facility will increase the company’s
Hood Container. capacity by three folds and support its business in the
Scandinavian market.

35 May 2021 Plastics News