Sonoco's Industrial Paper Packaging business exceeded expectations in the second quarter as strong North American demand for uncoated recycled paperboard (URB) drove higher production and stronger operating performance.
The company reported a 6% increase in North American URB trade ton sales, helping boost mill utilization to 95% during the quarter.
Howard Coker, Sonoco's President and CEO, said productivity improvements more than offset price pressure and higher raw material costs. Industrial segment operating profit increased 4% from a year earlier and was up 29% compared with the first quarter, reflecting stronger operational performance.
New markets support growth
According to Sonoco, demand for URB has strengthened as the company expanded into new applications, including saturating recycled paperboard for laminated products, while market share gains have further increased order backlogs. To meet customer demand, Sonoco said it is importing paper from its mills in Europe and Latin America through the third quarter.
The Industrial Paper Packaging segment reported second-quarter sales of $643 million, up 4.2% from the prior year. Operating margin remained stable at 13.9%, supported by procurement savings, fixed-cost reductions and other productivity initiatives that helped offset higher freight, raw material and operating costs.
Positive outlook for paper packaging
Looking ahead, Sonoco expects demand for recycled paperboard to remain strong during the second half of the year. The company said pricing actions, productivity initiatives and continued market expansion should support margin improvement while reinforcing its long-term goal of increasing profitability across the business, even as broader macroeconomic conditions remain uncertain.
Sonoco is a global packaging company with approximately 22,000 employees operating 265 facilities in 37 countries. The company generated $7.5 billion in sales from continuing operations in 2025.
