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The Yellow Sheet

Volume 86, Number 31 July 31, 2010

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PACKAGING MARKET

M&A Activity Starting to Rebound

Despite the fact that packaging merger and acquisition (M&A) activity is down 53 percent in the last 12 month period from peak levels in 2007, the number of transactions announced in the last 12- month period has begun to rebound from the trough in 2009, says BMO Capital Markets in the latest edition of its The Converter. It placed acquirers into one of four categories: privately held strategic, publicly traded strategic, private equity group (PEG), or private equity group-owned strategic.

Three of the four buyer categories – public strategic, PEG, and PEG-owned strategic

Continued on page 4

M&A Volume by Aquirer Type

2006-June 2010

PEG 20%

PEG-Owned
Strategic
13%

Public 31%

Private 36%

BMO Capital Markets Packaging Group

Transacted Containerboard Prices

Average transacted price levels are tabulated by obtaining paid prices from independent converters purchasing linerboard and medium. All prices are intended as a reference standard only. Transactions may be concluded at any time at any price agreed upon by seller and purchaser. These are delivered prices for week ended previous Tuesday. Price ranges listed are per short ton.

Northeast

42# Fourd. Kraft Linerboard $580–590

$590–600 $590–600 Southeast/ South Central

East Central

$600–610 North Central

$605–615 West

Kraft Linerboard Upcharges (Nationwide):

26#: $50/ton 33#: $30/ton 31#: HP* $30/ton 35# HP: $25/ton Recycled:

35#: HP Recycled: $30/ton

57# HP: $20/ton

26# .009 Semichemical $515–525 $520–530 $540-550 $530-540 $560-570 Medium
Semichemical Medium Upcharges (Nationwide):

23# SM:** $20/ton 33# HP: $25/ton 40# SM: $10/ton

*HP: High Performance **SM: Semichemical Medium

15%

Sonoco to Embed RFID Tags in Cores Sonoco Products Co. has invested in technology to embed passive radio frequency identification (RFID) tags into its fiber-based cores at its plant in Lauda, Germany, RFID Journal reports.

Sonoco was approached by its customers who were supplying the European décor paper industry, including makers of laminate flooring and countertops, which were seeking better tracking of its supply chain.

RFID would allow the customers to improve inventory management and know where their goods were in real time, which Jeff Stacy, a segment manager in Sonoco’s industrial carriers division, said would help companies reduce lost shipments, lower waste, and cut costs, RFID Journal reports.

Sonoco had to figure out how to embed the passive RFID tags into its cores, which Stacy said are made of multiple layers of adhesive-coated paper and “are in the range of 30 inches in diameter” when they come off the production line.

Embedded tags, rather than tags placed outside the cores or attached to pallets, would be secure and not subject to damage as they move through the supply chain, says Stacy.

The Hartsville, S.C.-based packaging manufacturer of tubes and cores for the paper industry promises customers “100 percent defect-free” tagged cores, he adds. He notes that Sonoco makes sure the tags are fully functioning by testing each core while still on the production line.