Sonoco, a global packaging company headquartered in Hartsville, South Carolina, has announced that its board of directors approved an $83 million investment to strengthen its uncoated recycled paperboard (URB) mill system in the U.S. and Canada. The majority of the investment includes transforming its Hartsville corrugated medium machine into a state-of-the-art URB machine with annual production capacity of about 180,000 tons.
According to a news release from Sonoco, the new Hartsville machine will have the capability to produce a wide range of high-value paper grades to service Sonoco’s industrial and consumer converted products businesses and external trade customers. Sonoco is a large producer of URB, with 12 mills and 20 machines in the U.S. and Canada. Sonoco reports that as a result of the Hartsville No. 10 machine conversion, the company will be exiting the corrugated medium market at the end of 2021, and the expected efficiency of the converted machine will give the company the opportunity to rationalize some of the higher cost assets in its mill system.
“We are calling this investment Project Horizon, as we will be creating a much brighter future for our domestic URB mill system while resolving the volatility we have experienced as an independent producer of corrugated medium from our No. 10 machine,” says Howard Coker, Sonoco’s president and chief executive officer. “These investments will drive significant operating cost savings, ensure the long-term viability of our Hartsville paper mill complex and place our U.S. and Canada URB mill system into the top quartile of performance from a cost perspective.”
The Hartsville No. 10 machine conversion will start with the development of a new recycled fiber stock prep system, which will allow the Hartsville paper mill complex to use a wide range of low-cost mixed paper and old corrugated containers (OCC), Sonoco reports. The No. 10 machine is a high-speed fourdrinier machine that will be upgraded with new forming, pressing and roll finishing and handling capabilities as well as new electronics and controls technology. Design work and stock prep development will begin in the second half of 2020, and the machine conversion should be completed and online by early 2022.
As part of the mill system optimization program, Sonoco will also increase capacity of its Wisconsin Rapids, Wisconsin, mill.
After the full ramp up of production, the mill system investment is projected to provide approximately $24 million in annual cost savings starting in 2023, while delivering returns well above the cost of capital. Sonoco also expects to drive additional savings from supply chain optimization, increased consumption of low-cost mixed paper along with environmental and power consumption savings.
Sonoco has also reported that it is permanently closing its No. 3 URB paper machine in Hartsville and at its paper mill in Trent Valley, Ontario, due to market conditions. The company will work with affected Hartsville employees to transition them into other roles in the Hartsville mill complex or provide retirement or other benefits.