Reports related to this article:
Project(s): View 2 related projects in PECWeb
Plant(s): View 2 related plants in PECWeb
Released January 23, 2013 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Packaging Corporation of America (NYSE:PKG) (PCA) (Lake Forest, Illinois), the fourth-largest U.S. producer of containerboard and corrugated packaging products, reported solid overall gains for fourth-quarter and full-year 2012, as the company saw record earnings, sales and shipments, and benefited from higher volumes, improved pricing and lower costs for materials. Net income was reported to be $61 million for the quarter, a 54.43% increase from fourth-quarter 2011, and $163.8 million for the year, a 3.67% increase from 2011.
Total sales stood at $736.6 million for the quarter, a 12.58% increase from the same period in 2011, and $2.84 billion for the year, an 8.54% increase from 2011. The brightest spot for the company during the fourth quarter was the demand for corrugated products, which remained strong through the end of the year. Also during the quarter, PCA completed a planned price increase for corrugated products.
Solid sales volumes and gradually strengthening demand were seen throughout the full year, while PCA saw reduced costs for energy, recycled fibers and chemicals. Shipments for workdays were up each month of the quarter when compared with fourth-quarter 2011, and November set a company record for any monthly shipments per workday. Box plant acquisitions made in 2012 contributed significantly to this increase.
Industrial Info is tracking $62 million in projects involving PCA, including $15 million in planned renovations and additions at the Valdosta Pulp and Linerboard Mill in Clyattville, Georgia. The project involves the possible decommissioning of a 1953 recovery boiler, and the conversion of a 1970 black liquor recovery boiler to a fluidized unit or natural gas/oil boiler. A new recovery boiler will be online in 2011; a new continuous digester will be installed; and 10 batch digesters will be decommissioned. If the project goes as planned, it will kick off in October 2013 and be completed in February 2014.
"Our domestic and export containerboard sales demand remains strong," said Mark Kowlzan, the chief executive officer of PCA, in a conference call. "However, with our increasing integration levels, and to maintain containerboard inventories at targeted levels, we did sell fewer tons into the export market, compared with both last year's fourth quarter and the third quarter of this year. Our export shipments of containerboard were about 8,000 tons lower than last year's fourth quarter, and about 17,000 tons lower than the third quarter of this year. Domestic containerboard sales were down about 2,000 tons compared with both the fourth quarter of last year and the third quarter of this year."
PCA executives expect to see some slowing of business, both seasonal and non-seasonal, in the first quarter of 2013. Containerboard production and corrugated products volumes are expected to be lower, while operating and energy costs are expected to be higher, the latter due to cold weather. Annual maintenance also will have an effect. However, the company expects to reap benefits from the fourth-quarter price increases for corrugated products.
"We've adjusted our mill annual outage maintenance schedule in 2013 to better optimize inventory levels, and also to accommodate the scheduled delivery of critical items needed for the outages," Kowlzan said in the conference call. "The only maintenance outage in the first quarter will be the No. 2 paper machine at the Counce, Tennessee, linerboard mill, which will be down for five days in March, reducing production by 7,000 tons, and also increasing operating costs. The majority of our maintenance downtime will occur in the second quarter."
PCA operates 71 corrugated products plants and four paper mills in 26 U.S. states. For more information, visit Industrial Info's North American Pulp & Paper Project Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Total sales stood at $736.6 million for the quarter, a 12.58% increase from the same period in 2011, and $2.84 billion for the year, an 8.54% increase from 2011. The brightest spot for the company during the fourth quarter was the demand for corrugated products, which remained strong through the end of the year. Also during the quarter, PCA completed a planned price increase for corrugated products.
Solid sales volumes and gradually strengthening demand were seen throughout the full year, while PCA saw reduced costs for energy, recycled fibers and chemicals. Shipments for workdays were up each month of the quarter when compared with fourth-quarter 2011, and November set a company record for any monthly shipments per workday. Box plant acquisitions made in 2012 contributed significantly to this increase.
Industrial Info is tracking $62 million in projects involving PCA, including $15 million in planned renovations and additions at the Valdosta Pulp and Linerboard Mill in Clyattville, Georgia. The project involves the possible decommissioning of a 1953 recovery boiler, and the conversion of a 1970 black liquor recovery boiler to a fluidized unit or natural gas/oil boiler. A new recovery boiler will be online in 2011; a new continuous digester will be installed; and 10 batch digesters will be decommissioned. If the project goes as planned, it will kick off in October 2013 and be completed in February 2014.
"Our domestic and export containerboard sales demand remains strong," said Mark Kowlzan, the chief executive officer of PCA, in a conference call. "However, with our increasing integration levels, and to maintain containerboard inventories at targeted levels, we did sell fewer tons into the export market, compared with both last year's fourth quarter and the third quarter of this year. Our export shipments of containerboard were about 8,000 tons lower than last year's fourth quarter, and about 17,000 tons lower than the third quarter of this year. Domestic containerboard sales were down about 2,000 tons compared with both the fourth quarter of last year and the third quarter of this year."
PCA executives expect to see some slowing of business, both seasonal and non-seasonal, in the first quarter of 2013. Containerboard production and corrugated products volumes are expected to be lower, while operating and energy costs are expected to be higher, the latter due to cold weather. Annual maintenance also will have an effect. However, the company expects to reap benefits from the fourth-quarter price increases for corrugated products.
"We've adjusted our mill annual outage maintenance schedule in 2013 to better optimize inventory levels, and also to accommodate the scheduled delivery of critical items needed for the outages," Kowlzan said in the conference call. "The only maintenance outage in the first quarter will be the No. 2 paper machine at the Counce, Tennessee, linerboard mill, which will be down for five days in March, reducing production by 7,000 tons, and also increasing operating costs. The majority of our maintenance downtime will occur in the second quarter."
PCA operates 71 corrugated products plants and four paper mills in 26 U.S. states. For more information, visit Industrial Info's North American Pulp & Paper Project Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
