Sonoco to Consolidate Business Units, Trim Staff
Sept. 16, 2009 - Sonoco yesterday said that it will simplify its business structure in order to create operating efficiencies and create scale in its Consumer and Industrial packaging to coincide with today's markets.
“Through a series of acquisitions and growth over the years, Sonoco has developed into a complex organization with 19 operating divisions, separate international organizations and various support functions,” said Harris E. DeLoach Jr., chairman, president and CEO of Sonoco. "While this structure has served us well in the past, the global recession has structurally changed many of our served markets.
"As a result, we must change our organization to address these new market realities and react to the changing needs of our customers. In addition, we will shift resources to our businesses with the best opportunity for global development so that we can meet our longer term growth and shareholder return goals," Deloach said.
DeLoach also indicated that the new structure will result in the elimination of jobs due to redundancies.
“Implementing these changes will in some cases involve adding resources, including people and capital. However, combining businesses will result in some redundancies. Overall, we estimate that these actions will reduce costs by an additional $20 million annually,” DeLoach said, adding that redundant employees are being offered severance pay, benefit continuation and outplacement assistance.
The major changes in the company's restructuring plans include:
- Overall, consolidating 19 separate businesses into six Consumer and Industrial business units with a direct reporting line to the Company’s senior leadership
- Consolidating nine Consumer Packaging and Services businesses into four global business units, headed by Charles Sullivan, executive vice president, Consumer.
“Sonoco, like most manufacturing businesses, remains vulnerable to the fragile global economy and the impact the lingering recession is having on consumers and our customers,” said DeLoach.
“To be successful during these uncertain times we must remain focused on improving areas we can control, including simplifying our business structure and scaling the company for program growth, improved innovation and obtaining sustainable operating efficiencies,” he added.
Founded in 1899, Sonoco is a $4.1 billion global manufacturer of industrial and consumer products and provider of packaging services, with more than 300 operations in 35 countries,