Economic rebound eludes US Sealed Air

29 July 2009 22:44  [Source: ICIS news]

HOUSTON (ICIS news)--US food and industrial packaging manufacturer Sealed Air has not seen an uptick in sales volumes that would indicate the recession is ending, an executive said on Wednesday.

“We have not experienced an upturn in the economy at this point,” said president and chief executive Bill Hickey.

The company said second-quarter sales volumes were down 12% year-over-year but flat compared with the first quarter, suggesting that end-markets have at least stabilised.

Hickey said the results were noteworthy because Sealed Air has greater exposure to industrial end-users and international markets than other companies in the packaging sector.

Sealed Air’s year-over-year volume declines were led by a 20% drop in the protective packaging segment, which includes shrink film products and packaging brands such as Bubble Wrap and Instapak.

“I wouldn’t look at [protective packaging] as being a leading indicator,” Hickey said. “If you actually look at production cycle, we are usually the last product to be ordered.”

Sealed Air uses commodity resins, especially polyethylene (PE), in making its products.

The company’s latest earnings guidance anticipated a slight uptick in resin costs through the end of the year.

“There are announced price increases, but we haven’t seen them at this point,” Hickey said.

Asked about recent consolidation in the flexible packaging sector, he said, “If you look at other industries, consolidation has led to more discipline in the marketplace. I see that as more likely than not.”

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By: David Barry
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