Paper

Sonoco provides update on $115M Project Horizon investment

Sonoco, a diversified global packaging company based in Hartsville, South Carolina, has released a progress report on Project Horizon, its investment to transform its corrugated medium machine in Hartsville to an uncoated recycled paperboard (URB) operation with 180,000 tons of annual production capacity.

“The conversion of our corrugated medium machine (No. 10 machine) to URB is expected to be completed by the end of the second quarter of 2022, and there are a number of significant construction projects underway that will modernize the infrastructure of the entire Hartsville Mill Complex and allow for more efficient and safe handling of raw materials and finished goods,” says Sonoco’s Tim Davis, division vice president and general manager, Paper & Adhesives, U.S./Canada.

The company says it has invested $115 million in Project Horizon, an increase from $83 million it initially invested when it first announced the project in April 2020.

When the company announced the project, Howard Coker, president and CEO of Sonoco, said the project is named “Project Horizon” because it “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.”

For Project Horizon, the company is constructing a new stock prep system to provide about 650 tons per day of recycled fiber to the rebuilt No. 10 paper machine and other Hartsville cylinder machines. According to a news release from Sonoco, the new stock prep system will allow for increased consumption of lower cost mixed paper along with old corrugated containers, or OCC. Davis says this machine should be operational in October.

To reduce paper finishing and warehouse complexity cost, Sonoco also is building a new offline winding operation and 102,000-square-foot finished goods warehouse on the Hartsville complex. The company says the new offline winding department will incorporate state-of-the-art equipment and should create 16 new positions.

Sonoco also plans to exit the corrugated medium market by early 2022 and expects URB capacity through its U.S. and Canada mill network to remain neutral at about 1.2 million tons per year. Based on the progress of Project Horizon, the company expects to permanently shut down its Hartsville No. 1 and No. 9 URB cylinder machines, which will reduce annual capacity by about 70,000 tons. The company adds that the timing on those closures will depend on market conditions as well as the startup of the converted Hartsville No. 10 machine.

In 2020, the company says it also permanently shut down a 30,000-ton-per-year machine in Hartsville and a 95,000-ton-per-year paper mill in Trent Valley, Ontario.

Sonoco reports that its new Hartsville machine is being designed with the goal of being a low-cost URB machine with the capability to produce a wide range of high-value paper grades to service the company’s industrial and consumer converted products businesses and external trade customers. Davis adds that Project Horizon is expected to drive $30 million in annual cost savings by 2023.

Sonoco also has achieved increased sales for the second quarter of its fiscal year, which ended July 4, compared with the same quarter in 2020. The company says its quarterly net sales were $1.38 billion compared with $1.25 billion in the second quarter of 2020.