Subscribe to Entrepreneur for $5

Sonoco's (SON) Arm Acquires American Recovered Paper Recycler

Sonoco's (SON) latest acquisition provides it with a stable, low-cost recovered fiber supply to its mill facilities.

This story originally appeared on Zacks

Sonoco Products Company’s SON business unit Sonoco Recycling acquired a privately-held, recovered paper recycler business — American Recycling of Western North Carolina.

This business annually processes approximately 30,000 tons of recovered fiber at its Asheville material recovery plant and expects to generate sales of around $9 million in the current year. The facility is situated approximately 65 miles from Sonoco’s Newport, TN, uncoated recycled paperboard mill. American Recycling of Western North Carolina business will supply stable, low-cost recovered fiber to Sonoco’s mill facilities.

Sonoco Recycling is a top 10 recycler in the United States, which annually recycles 2.8 million tons of old corrugated containers, metals, mixed paper, and plastics through its five material recovery facilities and 20 recycling hubs. Sonoco Recycling currently operates 40 recycling facilities around the globe.

Sonoco is focused on expanding its sustainable packaging portfolio. In sync with this, the company entered into an agreement to acquire Ball Metalpack, which produces sustainable metal packaging for food and household products. Last month, the company, in collaboration with Tellus, declared the receipt of a prequalified label — Check Locally — for recyclability from How2Recycle for the Natrellis line of food packaging. Natrellis technology fulfills consumers’ increasing preference for more sustainable options for high-quality refrigerated and chilled foods.

Sonoco intends to achieve sustainability goals with a significant reduction of carbon emissions and provide sustainable products to customers. Earlier this year, the company established Scope 1, 2 and 3 emission reduction goals authorized by the Science-Based Targets initiative (SBTi). By 2030, the company intends to lower Scope 1 and 2 greenhouse gas emissions by 25% and Scope 3 carbon emission by 13.5%.

Sonoco’s peer companies like Amcor Plc AMCR, Packaging Corporation of America PKG and Sealed Air SEE are also offering sustainable packaging to consumers.

Recently, Amcor unveiled an advanced technology for small bottles to recycle. The company is committed to making all of its packaging recyclable by 2025.

Sealed Air plans to design 100% recyclable packaging solutions by 2025. So far, 50% of its solutions are already being designed for recyclability.

Packaging Corporation’s 89% of all corrugated products were recovered and directed into the recycling stream in 2020. The company’s Sustainable Forestry Initiative certified mills are focused on introducing new harvested fiber to maintain sustainable fiber supply. Consumers’ growing awareness and consequent increase in demand for sustainably-packaged products is a major growth scope for these companies.

Sonoco’s consumer packaging businesses are gaining from elevated at-home eating trends. It believes that the confectionery, food service and construction products’ markets, which had been impacted by the pandemic, will continue to recover. The company’s industrial-end markets will gain from the historically-high backlogs for uncoated recycled paperboard in the United States and Canada coupled with robust demand for global tubes, cores and cones returning to the pre-pandemic levels. Sonoco expects adjusted earnings per share for the current year to be at the top end of its guidance of $3.49-$3.55.

Sonoco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

- Zacks

Price Performance

Sonoco’s shares have declined 0.5% in the past year compared with the industry’s rise of 11.9%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Top 10 Stocks for 2022

In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?

From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.

Be First To New Top 10 Stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Sonoco Products Company (SON): Free Stock Analysis Report


Sealed Air Corporation (SEE): Free Stock Analysis Report


Packaging Corporation of America (PKG): Free Stock Analysis Report


Amcor PLC (AMCR): Free Stock Analysis Report


To read this article on click here.


Zacks Investment Research