Two more production units, in Neochorouda in Thessaloniki and in Stavrochori in Kilkis, are being locked down before the ink of the dozens of redundancies at the historic Gioula factory, the last operating glass factory in the country, is finally down at the end of March.
The reason for the two Sonoco paper mills Hellas SA, a subsidiary of the American packaging giant Sonoco Products Co., based in Hartsville, South Carolina.
The approximately 90 workers in Kilkis (production) and Thessaloniki (packaging) were surprised to learn the bad news when they returned to work after the March 25 holiday. The announcements were made by the company’s staff in Luxembourg, where Sonoco Alcore Sarl is based, the European arm of the multinational, having responsibility for 70 factory units in the old continent in 18 countries.
The Greek company is expected, according to information, to close permanently on May 31in order, in the meantime, to serve the existing orders.
Based on what was said by the foreign managers and conveyed to OT by the workers, who literally fell out of the clouds and were left without work since nothing foreshadowed the lockout, the exorbitant energy costs it was the reason why the decision was made to extinguish these fireplaces as well.
The lost investment
It is worth mentioning that the company attempted to compensate for the high energy costs that took away “points” compared to the European competition.
In particular, he invested around 3 million euros in the construction of an anaerobic biological reactor with simultaneous production of biogas. However, it could not proceed to the second phase (including the utilization of green energy) as DEDDIE did not integrate it into the network due to a lack of capacity.
Increase in turnover with losses on the bottom line of the balance sheet
Based on the last published balance sheet of the company in GEMI for the financial year 2021, its turnover amounted to 19,932,910 euros, increased by 34% compared to 2020.
Despite the positive performance in the turnover, the result of the year before taxes and interest was a loss of 350,761 euros. The result after taxes was also damaging (-540,335 euros).
All the obligations of Sonoco Hellas S.A. in 2021 it amounted to 4,829,251 euros, with what is owed to suppliers (2,543,889 euros) being the main fund.
As mentioned in the financial statements, the management was optimistic that the company’s results for 2022 would be profitable.
With a presence in Greece since 1997
Sonoco Hellas S.A., a member of the newly established Union of Paper Industries of Greece, is closing after almost 30 years of continuous business activity in the Greek market, in fact having up to now a total of 4 factories throughout the territory.
The first “contact” of the Americans with the country’s production fabric took place at the beginning of 1997 when through Conitex Sonoco, the largest manufacturer of paper cones and cylinders for the textile industry worldwide, they “entered” the share capital of the company EVIEN S.A., buying 35%. This collaboration gave new impetus to EVIEN, which with the help of Sonoco, started the production of paper cylindrical packaging products for the food and textile industries. In 1998 the Greek company was fully acquired.
It should be noted that Conitex Sonoco Hellas – Spinning Accessories Industry M.A.E. with headquarters in Neochorouda, in Thessaloniki, a few days ago, specifically on March 11, 2024, it was absorbed by Sonoco Hellas S.A. Since the end of 2016, the company in question has been producing paper packaging corners to protect goods during transport since the demand from the textile industry has almost zeroed out.
In the same area is also the company’s processing plant where “madren” is produced, i.e. paper trunks for product packaging.
The raw material, i.e. recycled paper, is produced in Kilkis. The company in Stavrochori in Kilkis has modern privately owned facilities, which extend over 5,500 sq.m.
The… zymaroulis and the closing of the factory in Inofyta
In addition to the 2+1 factories in northern Greece, the American group previously also had a fourth production unit in Oinophyta. Cans (paper cylinders) for food were produced there.
In particular, the factory of General Mills Hellas was served, which was better known in the market with the “Pillsbury” brand of dough products of the same name.
But the Greek subsidiary of the multinational group General Mills in March 2022 proceeded to sell the dough production equipment to the French Cerealia Lievin, as a result of which Sonoco’s Oinophyta factory was left without an object and stopped its operation.
Record earnings for the group
With a history of 125 years, Sonoco Products Co. is among the leading producers of packaging products worldwide.
With net sales of approximately $6.8 billion in 2023 compared to $7.3 billion in 2022, the company has approximately 22,000 employees working in more than 300 manufacturing facilities worldwide, serving some of the most well-known brands.
Adjusted EBITDA was $1.07 billion for 2023, down 8% from 2022, while adjusted earnings per share (EPS) were $5.26 for the full year.
“We achieved record operating cash flow, record free cash flow, record productivity and invested a record amount to drive future growth and profitability,” said Sonoco Chief Financial Officer Rob Dillard.
The American group’s shares are traded on the New York Stock Exchange.
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