Smurfit-Stone Container

For the building, see Smurfit-Stone Building.

Financial Information
	2007	2006	2005
Total Revenue (US$M)	7,420	7,157	6,812

Smurfit-Stone logo

Smurfit-Stone Container Enterprises, Inc. (NYSE: SSCC), formerly Smurfit-Stone Container Corporation is a global paperboard and paper-based packaging company based in Creve Coeur, Missouri, and Chicago, Illinois. It has approximately 21,000 employees. In 2007, Smurfit-Stone was ranked 13 in PricewaterhouseCoopers' "Top 100" forest, paper, and packaging companies in the world (ranked by sales revenue). The company is also among the world's largest paper recyclers.

History

Introduction

Smurfit-Stone Container Corporation (Nasdaq: SSCC) is the industry’s leading integrated manufacturer of paperboard and paper-based packaging. The company is the largest North American producer of containerboard, corrugated containers, multiwall and specialty bags, and clay-coated recycled boxboard (CRB). It is also a leading producer of solid bleached sulfate paperboard (SBS), folding cartons, flexible packaging, labels and point-of-purchase displays. SSCC is one of the world’s largest paper recyclers, a key raw material for its products.

As North America’s largest paperboard packaging company, Smurfit-Stone continues to identify developing retail trends, creating innovative packaging concepts and speeding them to market. In the process, Smurfit-Stone is changing customer perceptions of what packaging can do and what the company can deliver.

Smurfit-Stone’s production capabilities and innovation form the broadest product range of any paper-based packaging producer and the ability to meet the growing demand for value-added packaging.

History

SSCC was formed in November 1998, with the merger of Jefferson Smurfit Corporation (JSC) and Stone Container Corporation (Stone). JSC’s roots go back to 1974, when Dublin, Ireland-based Jefferson Smurfit Group (JSG) acquired partial interest in Time Industries, a Chicago-based paper and packaging company. JSG established a major presence in the United States with the 1981 acquisition of the Alton Box Board Company and the 1982 acquisition of Diamond International’s packaging operations. In 1983, JSG’s U.S. operations reorganized. The majority of these operations became subsidiaries of JSC. JSC went on to establish a leadership position in the U.S. paper and packaging industry with its 1986 acquisition of 50 percent of Container Corporation of America (CCA) from Mobil Corporation. Morgan Stanley Leveraged Equity Fund II (MSLEF II) purchased the other half of CCA. JSC restructured as a privately held company in 1989, jointly owned by JSG and MSLEF II. As part of the restructuring, JSC acquired the remainder of CCA. In 1994, JSC recapitalized as a publicly traded company.

Stone Container was founded in 1926 as J.H. Stone and Company. In 1945, it incorporated under the name Stone Container Corporation. In the 1950s, Stone expanded outside of Chicago, buying and building corrugated container plants in Pennsylvania, Ohio, Indiana, and Michigan. The company acquired facilities from Continental Group in 1983 and acquired additional facilities from Champion International in 1986.

The merger of JSC and Stone in 1998 brought together two leaders of the paper-based packaging industry. In conjunction with the merger closing, JSG purchased 20 million shares of JSC’s stock from MSLEF II and certain other investors. In May 2000, SSCC acquired St. Laurent Paperboard, Inc. In September 2002, the company acquired MeadWestvaco’s Stevenson, Alabama, containerboard mill and related operations. That same month, JSG privatized and distributed its stake in SSCC. Today, neither JSG nor MSLEF II are stockholders of Smurfit-Stone. In March 2003, SSCC exchanged its European assets for JSG’s 50 percent ownership of Smurfit-MBI, a Canadian packaging company, and $189 million cash. SSCC now owns 100 percent of Smurfit-MBI. As a result of this transaction, SSCC is focused almost exclusively on the North American market.

Products

Smurfit-Stone has two reportable business segments. The containerboard and corrugated containers segment accounts for 75 percent of net sales and includes the company’s containerboard mills and corrugated container operations. The consumer packaging segment represents 20 percent of net sales and consists of CRB, folding carton plants, and multiwall and specialty bag operations. It also includes packaging equipment, flexible packaging, tube, and label plants. Other operations include nonreportable segments, which accounts for 5 percent of net sales and primarily consists of recycling operations, including collection centers and brokerage sales offices.

Products and services

Smurfit-Stone produces a wide selection of paper-based packaging products (many of which are "environmentally sustainable"), including corrugated boxes and protective packaging, corrugated pallets, containerboard, kraft paper, market pulp, packaging equipment, and point of purchase displays.

A few examples of Smurfit-Stone’s environmentally sustainable packaging are:

-The eight-sided META case, which provides corrugated packaging that utilizes less material while offering improved stacking strength, stronger shelf impact, and other benefits.

-The EnviroShell, which serves as a recyclable, corrugated alternative to traditional blister packs and includes easily separated and recycled PET inserts. These inserts help lead to EnviroShell’s 89 percent reduction in plastic use compared to the traditional blister packs.

-RecyclaCorr is a fully recyclable product that offers a replacement to wax imbued mediums. It provides strength under both dry and humid conditions and has 100% recycled fiber content. Some common applications of RecyclaCorr include packaging produce, protein, beverages, bakery products, products that sustain freeze/ thaw cycles, and products that require high humidity storage.

Smurfit-Stone also provides paper and packaging-related services, which include recycling solutions, packaging research and development, and pulp and paper services.

Safety

Smurfit-Stone has been an industry leader in safety performance since 2001. In 2007, Smurfit-Stone’s U.S. operations had an OSHA recordable case rate of 1.05, the best in company and industry history. This represents an 84 percent improvement in the company’s recordable case rate since the implementation of Smurfit-Stone’s SAFE process in 1995. The SAFE process, which stands for Smurfit-Stone Accident-Free Environment, promotes five core beliefs:

1. All injuries are preventable
2. Safety is everyone’s responsibility
3. Working safely is a condition of employment
4. Training employees to work safely is essential
5. Safety is good business

Environmental

Air

Smurfit-Stone sets out to solve sustainable packaging requirements of its customers without threatening the ability of future generations to fill their needs. To ensure this mission is carried out, the company works to reduce its environmental footprint in every way possible. Smurfit-Stone is a member of the Chicago Climate Exchange (CCX), committing to achieve greenhouse gas emission reductions of 6 percent below baseline by 2010. The company has also put its Load Max Initiative into place, which reduces green house gas emissions by maximizing trailer usage and thereby placing fewer trucks on the highway. Overall, Smurfit-Stone has reduced its use of fossil fuel by 20% since 1998 and has already met the obligation of CCX Phase I to reduce green house gas emissions by 312,000 tons, a goal that was met by utilizing such practices as the combined heat and power process (CHP) to burn biomass in mills.

Forestry

Smurfit-Stone is one of the founding members of the Sustainable Forestry Initiative (SFI). By subscribing to the SFI Environmental Standards, Smurfit-Stone uses the SFI Certified Sourcing Label. To obtain that label, Smurfit-Stone is required to maintain two-thirds of its raw materials for packaging from SFI-certified sources and must also make efforts to inform landowners on the importance of practicing sustainable forestry. Smurfit-Stone utilizes a Forest Resources program, which provides high-quality virgin wood fiber to its mills, manages company forestlands (approximately 1 million acres), and maintains a nursery and tree improvement program. The nurseries in this program grow over 24 million pine seedlings annually to replace trees that have been harvested by Smurfit-Stone.

The manufacturing process used by Smurfit-Stone’s kraft paper mills utilizes most parts of trees. Bark and sawdust are used as biomass fuel for boilers; the debarked tree is processed into fiber, which is refined to make paper; the remaining chemicals are recovered and reused as a source of fuel for the boilers; and the wood residuals that Smurfit-Stone cannot use are sent to third parties who reuse them as biomass fuel or to enrich soil quality.

Recycling

Smurfit-Stone is also among the leading collectors of recycled paper and non-paper based recovered materials worldwide, operating the world’s largest paper recycling business. In 2007, Smurfit-Stone collected a record 7 million tons of recyclable materials, and annually reuse approximately 45% of collected fiber in Smurfit-Stone mills. Smurfit-Stone has also recently begun using their capabilities to recycle third party wastes such as plastic, metal, and glass.

Sustainability

In continuing efforts to promote environmental sustainability throughout the industry, Smurfit Stone is a member of the World Business Council for Sustainable Development(WBCSD), an organization that provides a medium for companies to share knowledge and experience, expand sustainable development, and voice company positions on relevant issues. Smurfit-Stone partners with organizations such as the National Council for Air and Stream Improvement, the Rocky Mountain Elk Foundation, the Michigan United Conservation Club, and the Alabama Treasure Forest Association.

Smurfit-Stone carries out its business in compliance with the environmental, health, and safety principles of the American Forest and Paper Association. They conduct routine evaluations to confirm the status of this compliance and to monitor their facilities’ environmental management systems.

Community involvement

Smurfit-Stone actively takes a role in improving local communities with financial and volunteer-based contributions. In December 2007, Smurfit-Stone Container Company pledged $1 million to the YMCA of Greater St. Louis. They now aim to raise $30 million for the organization by 2009. In March, 2007, Smurfit-Stone provided their company wellness center to the YMCA in West Point, VA. The building is now used to house the Greater West Point Family YMCA. Smurfit-Stone’s recycling division has sponsored American Cancer Society fundraising events for more than 10 years, raising around $1 million to directly benefit the St. Louis Hope Lodge Center. Smurfit-Stone works with several other organizations such as Habitat for Humanity, Project Learning Tree, American Red Cross, United Way, March of Dimes, and Juvenile Diabetes Research Foundation.

Bankruptcy & corporate reorganization

In early January 2009, The Wall Street Journal announced that Smurfit-Stone had hired lawyers to plan for a potential bankruptcy filing - which caused an 83% collapse of Smurfit-Stone's stock price. On January 27, 2009, Smurfit-Stone filed petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware.

The company's CEO claims Smurfit-Stone was forced to file bankruptcy because of higher operations costs, burdensome debt levels from prior corporate mergers, and weakened demand for packaging caused by a global economic recession. Pending court approval, the company hopes to obtain debtor-in-possession (DIP) financing to continue ongoing business operations, payment of employee wages and benefits, and payment of existing vendor obligations.

Recent Openings

In May 2009, Smurfit-Stone opened a high-tech corrugated container producing facility in New Lenox, Illinois. The new plant will employ 145 people and supply companies in the pizza, oil lubricants, detergents and household goods, cooking, and health care industries.

External links

• Smurfit-Stone Official website