Continuing a series of price hikes on its products that began this past summer, Hartsville, S.C.-based Sonoco Products (NYSE:SON) said Monday that it plans to raise prices on its packaging products.
According to the company's announcement, fabricated packaging assemblies containing expanded polystyrene (EPS ) and/or polyethylene (PE) and corrugated materials will become 4.2% more expensive on Jan. 1, 2014, EPS parts and components will rise in price by 3.7%, and corrugate packaging will rise 15% in price.
Sonoco Vice President for Consumer Protective Solutions Greg Powell noted that the company has "worked hard to provide price stability to our customers," and "been successful in maintaining stable pricing for more than a year. " However, "inflationary input costs" in resin, corrugated linerboard, and more generally, energy have necessitated raising prices.
Over the past two quarters, Sonoco's gross margins on its products have actually grown modestly, both sequentially and in comparison to prior-year levels. Overall profit growth at the company has been modest, however, with Sonoco growing profits only 4% in the most recent quarter.