Ahlstrom to merge core and tube production with American company Sonoco

Finnish company to hold one third of joint venture

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Ahlstrom, a manufacturer of fibres and specialty papers, has signed a joint venture agreement with American packaging giant Sonoco in order to improve the profitability of its core, tube, and coreboard business.
      The new company, to be named Sonoco-Alcore, will be Europe's largest producer of cores and tubes with an annual sales volume of 290,000 tons. The net sales of the joint venture will total 300 million euros, and it will employ 1,800 people.
      Ahlstrom will receive a holding of 35.5 percent in the new company, and three of the seven Board members will be selected by Ahlstrom. Sonoco-Alcore will be headquartered in Brussels.
      The agreement between Ahlstrom and Sonoco requires approval from EU competition authorities. The approval process will take at least one month.
     
The European core, tube, and coreboard market is currently suffering from overcapacity, and a resulting poor profitability. Ahlstrom President and CEO Juha Rantanen emphasised on Monday that cores and tubes are not among Ahlstrom's growth areas.
      The weakest Ahlstrom division last year was Specialities, with coreboard and wallcover base papers generating the largest losses.
      Rantanen explained on Monday that after this arrangement, the company's management can once again focus on its main priorities: listing Ahlstrom on the stock exchange and seeking acquisition targets that would lift Ahlstrom' s fibre business into the top three in Europe.
      Rantanen estimated that over time, Sonoco-Alcore will need to shut down some of its core and tube plants. At present, Ahlstrom has three such plants in Finland, but they are among the most profitable in the new joint venture.
      The best-known product of Sonoco is the Pringles potato chip package.


Links:
  Ahlstrom press release

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