Sonoco focuses on European expansion after $360m WPG acquisition

By Jenny Eagle contact

- Last updated on GMT

Sonoco completes Weidenhammer Packaging Group acquisition

Related tags: Sonoco

Sonoco has completed its $360m acquisition of Weidenhammer Packaging Group (WPG), a European provider of composite cans, drums and rigid plastic containers.

The company, which caters to the processed foods, powdered beverages and confectionery markets, among others, is based in Germany and has 13 production facilities and plants in Belgium, France, Greece, The Netherlands, UK, US, Chile and Russia.

European Rigid Paper

Sonoco

Jack Sanders, president/CEO, Sonoco, told FoodProductionDaily.com Rob Tiede, Sonoco’s senior VP, Consumer Packaging and Services, will head up the European Rigid Paper side of the business and the existing leadership will report to him as part of the integration process. 

We are very pleased the deal has been completed. Our combined resources greatly expand the products, services and capabilities we can offer customers, particularly in Europe​,” he said. 

The joining of our business also expands our manufacturing capacity and technological footprint geographically, allowing us to more effectively and efficiently serve our customers throughout Europe and into other markets we share​.

The addition of Weidenhammer to the Sonoco family increases our consumer-related packaging service business to approximately $2.8bn in annual sales and increases Sonoco’s presence in Europe to approximately $1.2bn in annual sales or 21% of total sales​.”

To finance the transaction, Sonoco entered into a Credit Agreement for a $600m bank credit facility earlier in October. Included in that facility is a $350m, five-year revolving credit facility, which replaces an existing credit facility under substantially the same terms.

Commercial paper program

The $350m revolving credit facility is being used to support an identically sized commercial paper program. Also included in the Credit Agreement is a $250m three-year term loan which was used to fund the acquisition.

In addition to producing composite cans, drums and luxury tubes, WPG produces rigid plastic containers using thin-walled injection molding technology with in-mold labeling.

Sanders said no immediate changes are planned following the acquisition, but it has formed a joint integration team to look at forthcoming opportunities using the strengths of both organizations.

For example, Weidenhammer has strong manufacturing technology and automation capability that compliments Sonoco’s material science expertise. 

Sonoco is currently building a $20m composite can plant in Kuala Lampur, Malaysia, to serve the growing stacked chip market in Southeast Asia​,” he added. 

The can plant is Sonoco’s third in Malaysia and will produce packaging for snacks using three high-speed composite can lines along with two metal end presses.

Extrusion laminator

In addition, an extrusion laminator is expected to be installed at the company's flexible packaging facility in Kajang, Selangor Darul Eshan, Malaysia, to produce can liners.

The first can line is expected to be installed in the third quarter of 2014 and begin commercial production in the first quarter of 2015. All three lines, along with the metal end presses and the extrusion laminator are expected to be operational by the end of 2015.

We recently also started a can plant in Kutno, Poland, and we are expanding capacity into China. Approximately $10-$15m in capital is expected to be used in Weidenhammer-related projects in 2015, primarily adding capacity for the production of injection molded containers with barrier in-mold labelling​,” added Sanders.

The acquisition should not be too different for Weidenhammer associates as they continue to perform their existing roles while working jointly on integration efforts​.

The next phase is meeting the needs of our combined customers and having our joint integration team working to develop plans and processes to ensure our organizations come together culturally and operationally​.”

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