Sonoco, Ahlstrom Combine European Tube/Core and Coreboard Operations

Sonoco and Ahlstrom Corp.,Helsinki, Finland, have signed a definitive agreement to combine their respective European paper-based tube/core and coreboard operations into a joint venture that will operate under the name Sonoco-Alcore S.a.r.l. The joint venture will be held 64.5 percent by Sonoco and 35.5 percent by Ahlstrom

Under the terms of the agreement, Sonoco will manage the joint venture and has named James A. Harrell, III, division vice president, Sonoco Industrial Products/Paper-Europe, to head the operation.

Sonoco will contribute to the joint venture ownership positions in 25 tube and core plants, consisting of one in Belgium, five in France, three in Germany, one in Greece, three in Italy, one in the Netherlands, one in Norway, one in Poland, two in Spain, one in Switzerland, one in Turkey, and five in the United Kingdom. Sonoco will also contribute six paper mills, consisting of two in France, one in Germany, one in Greece, one in Italy, and one in the United Kingdom.

Ahlstrom will contribute 15 tube and core plants, consisting of one in Estonia, three in Finland, one in France, two in Germany, two in the Netherlands, one in Norway, one in Poland, one in Russia, and three in Sweden. Ahlstrom will also contribute its paper mill in Karhula, Finland, and recutting center in Anjalankoski, Finland.

In a separate but related transaction, Sonoco has signed an agreement to purchase 100 percent of Ahlstrom's Chinese paper tube/core operation in Shouguang to serve the rapidly growing Chinese market for paper mill cores. The purchase price was undisclosed, and the operation will not be part of the joint venture.

Sonoco currently has a paper mill and tube and core operations in Shanghai, a tube and core converting facility in Kaiping in the south of China and is building a new tube and core converting facility in Wujiang, Shengze town of Jiangsu province, which is expected to open in the third quarter of 2004.