Sonoco to Close Plants, Trim Workforce in Europe
Oct. 11, 2006 - Sonoco announced that it would initiate cost-reduction measures primarily focused on certain of its international operations.
The cost reduction plan calls for the closing of approximately 12 plant locations globally and the reduction of approximately 540 positions worldwide. No significant reductions are anticipated at the company's Hartsville, South Carolina, headquarters.
"The majority of our restructuring program will focus on Europe, where Sonoco recently announced that it would acquire the remaining 35.5 percent interest of the Sonoco-Alcore, S.a.r.l., joint venture from Ahlstrom Corporation," said Harris E. DeLoach, Jr., Sonoco's chairman, president and CEO. "These actions will better optimize Sonoco's operations throughout Europe allowing us to achieve a low cost position in the markets we serve."
The total cost of the restructuring program is estimated to be approximately $35 million, the majority of which is severance and other cash costs that will be incurred starting in the fourth quarter of 2006 and continuing into 2007.
Sonoco expects to achieve approximately $23 million in annual pre-tax savings when fully phased in through the remainder of 2006 and 2007.