Sonoco Rebuilds Hartselle Plant - Analyst Blog

Sonoco Products Co. (SON) has started rebuilding the Hartselle, Alabama operations, damaged by fire in November 2010 and expects to commence production later this summer. 

The facility manufactures molded wood plugs, which are used largely by the paper industry in the tubes and cores. The company is investing approximately $4.6 million in the new manufacturing facility, which will be located at the site of the existing building, adjacent to the company’s Hartselle nailed wood/plywood reels plant. The facility location also has a team to look after the manufacturing of wood products and an on-site source of wood chips.

The facility is likely to have eight molded wood plug presses while it will have a space to contain twelve, leaving the company the scope to expand in case demand increases.

The plant situated in Hartselle-Morgan County Industrial Park will initially operate with 25 to 30 employees, and will be equipped with modern controls and fire protection. The new means and methods of fire protection include isolation of hydraulic power units on the outside of the building, fire suppression redundancies and fire wall separation of the manufacturing area from the warehouse.

Hartsville, South Carolina-based Sonoco is a global manufacturer of consumer and industrial packaging products. The company has more than 300 operations in 35 countries throughout North and South America, Europe, Australia and Asia.

The company operates through four reportable segments: Tubes and Cores/Paper, Consumer Packaging, Packaging Services and All Other Sonoco segment. Sonoco competes with Bemis Company Inc. (BMS) and Smurfit-Stone Container Corp. (SSCC). We currently have a Zacks #4 Rank (short-term Sell recommendation) on the stock.

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