Page 39 - Plastics News November 2020

Sonoco to divest Europe Contract Packaging Borealis registers net profit of €163 million
Business to Prairie Industries Holdings ($189m) for Q3 2020

onoco one of the most diversified global packaging orealis has posted a net profit of €163 million
Scompanies, today announced it has signed an
B($189m) for the third quarter of 2020, down from
agreement to sell its Europe contract packaging €207m ($240m) in the same quarter of 2019. The lower
business to Prairie Industries Holdings, a Wisconsin- result was achieved in the face of difficult market
based contract packaging and contract manufacturing
conditions characterised by low product prices and
firm backed by The Halifax Group, a Washington, D.C.-
based global investment firm, for $120 million in cash. reduced demand in some sectors due to the
The transaction is subject to normal closing
requirements and is expected to be completed in the
fourth quarter of 2020. Sonoco's Europe contract
packaging business (Sonoco Poland Packaging Services

coronavirus pandemic; the result is an increase of EUR
99 million versus the second quarter of 2020, a clear
improvement. Alfred Stern, Borealis CEO said, “The
third quarter of 2020 has again demonstrated how
critical our products are for sustainable living,
especially in a crisis such as the Covid-19 pandemic.
Sp. z o.o.) produced net sales of approximately $300
million in 2019 and provides full-service custom We have been able to deliver a solid financial result
packaging and supply chain management solutions to while maintaining our commitment to our important
global consumer product goods companies through six global growth projects.” The deterioration in profit
contract packaging facilities in three locations and a compared to the third quarter of 2019 was driven by a
warehouse all in Poland. The business is part of lower integrated polyolefins margin and a less
Sonoco's Display and Packaging segment and has favourable fertilizer market environment. However,
approximately 2,600 employees. According to Howard polyolefins sales volumes increased versus the same
Coker, Sonoco President and Chief Executive Officer, quarter of the previous year despite less auspicious
the divestiture is part of the Company's efforts to market conditions. Third-quarter Borouge
simplify its operating structure to focus on growing its performance also showed improvement over the
core Consumer and Industrial packaging businesses.
previous quarter, but remains below 2019 levels due to
Net proceeds from the transaction are expected to be
used to reduce short-term debt and further improve lower polyolefins prices and the significantly weaker
the Company's strong liquidity position. “Since opening market environment. In the third quarter, net debt
our Europe contract packaging business with a single decreased by EUR 53 million, as strong cash flow from
customer 20 years ago, we have built this business to operating activities, dividends from Borouge, the
serve some of the best known global consumer product stringent management of investment activities, and
brands supplying consumers in more than 40 countries cost discipline enabled Borealis to maintain its strong
in Europe, the Middle East, Africa and Asia,” said Coker. financial position at the end of the third quarter, with
“I want to thank our dedicated management team and a gearing of 30%. Stern added, “Our core values of
employees in our contract packaging operations in 'safety first' and operational excellence have served us
Poland for their contributions to Sonoco and wish them well and will enable us to navigate adeptly through
the best as part of the Halifax family of companies.” this challenging period.”

NOVEMBER 2020 39 Plastics News