Hike in leading packaging firm’s paperboard prices

By staff reporter

- Last updated on GMT

Related tags Raw material Cost

Graphic Packaging International today announced that it will increase prices for coated unbleached kraft paperboard, effective with shipments on or after November 1, 2008.

The paperboard supplier is a subsidiary of Graphic Packaging Holding Company, which is headquartered in the US and provides food companies worldwide with packaging for a wide variety of food and beverage products.

It said prices for its Pearl-Kote and Omni-Kote coated folding carton grades used for food packaging will rise by $40 (€29) per tonne, while the cost of its Aqua-Kote carrier grade used for beverage carriers is set to increase by $50 (€37) per tonne.

"Given the volatile costs for essential inputs like fibre, energy and chemicals in our manufacturing, we are taking action to continue to manage these uncertainties and provide innovative paperboard packaging to our customers under the current market dynamics, while also providing positive returns to our shareholders,”​ said CEO David Scheible.

Sonoco results

Meanwhile, Sonoco, one of the largest diversified global packaging companies, yesterday announced net sales for the third quarter of 2008 of $1.06bn (€0.79bn), compared with the $1.03bn (€0.76bn) reported in the same period in 2007.

“Sales improved 3 per cent during the quarter reflecting higher selling prices, which were implemented to recover some of the escalating raw material, energy, freight and other costs,”​ said Sonoco CEO Harris DeLoach.

He said that third quarter sales in its consumer packaging segment increased eight per cent and base operating profits climbed 22 per cent.

“Productivity improvement in both manufacturing and fixed costs throughout many of our businesses benefited Sonoco in the third quarter,”​ added DeLoach.

Fall in oil prices

Using oil as a key raw material means keen exposure to the fluctuating world price of crude oil. In recent months when prices escalated to highs of $150 (€112) a barrel, suppliers had to march in tune to the rise in costs, stepping up price increases to their customers.

However, the recent steep fall in price for the commodity looks set to result in savings for food makers impacted by spiralling upward raw material costs over the past twelve months.

Indeed, a report from investment bank Credit Suisse underlines this cost hope for manufacturers.

With the fall in crude oil costs over recent weeks, Credit Suisse's packaging index is 15 per cent lower than ‘a month or two ago’, despite the fact that the firm's index – that includes plastics, paper and tin – is up more than 15 per cent year on year, and about 10 per cent year to date.

Related topics Processing & Packaging

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