What does smurfit stone do

By it was selling folding cartons, fiber cans and tubes, tags, and special paper packages, due in great measure to the acquisition of W. While Stone was expanding rapidly and becoming a force in the industry its primary raw material, jute linerboard, was losing ground to the lighter, stronger kraft linerboard.

To stay competitive, Stone had to buy kraft linerboard from other paper companies. Although the kraft linerboard shortage became apparent in the late s, CEO Norman Stone was not able to address the problem until , when Stone Container organized and took a 65 percent equity share in South Carolina Industries SCI.

Through SCI, Stone Container built a completely new kraft linerboard mill at Florence, South Carolina, a mill capable of producing tons of board a day. By the early s Stone Container was consolidating its gains. The advertising revolution was complete, and in nearly all of its containers were designed specifically for a customer's product and market.

In the company was listed on the New York Stock Exchange. With the opening of the South Carolina mill in , Stone for the first time became a fully integrated company, supplying virtually all of its own raw materials. During the economic slowdown of the late s and early s, the company continued expanding. Although operations kept expanding, Stone Container resolutely stayed out of the forestry business.

According to Chairman Jerome H. Stone, who spoke with Paper Trade Journal in January , the investment would have been too much. At the present time I don't see any way of obtaining a reasonable return on that investment. In the early s Roger Stone, then vice-president of the containerboard division and later CEO, saw industry leaving the Northeast.

He realized that his primary customer base was shrinking and that he needed to reorient production in some geographic sectors toward a more consumer-based market. By the Stone family's ownership was some 62 percent of the company's stock. Yet the Stones continued to work hard to assure that Stone Container was a truly public company.

They promoted heavily from within. Three family members were in the company's upper echelons: Jerome as chairman and chief executive officer, Roger as president and chief operating officer, and Alan as vice-president, marketing. Expansion continued, and in the company entered the Minneapolis-St. Son of Marvin Stone, one of the original founders, he was the second youngest of five cousins. Roger Stone had joined Stone Container as a sales representative in , and become president in The Stone family, which at that time owned about 60 percent of 7.

With signs of an upturn in the paper market, however, Stone Container pulled out of the deal and decided to remain public. With that commitment to the future of the Stone Container Corporation, Roger Stone began an aggressive expansion campaign that would eventually make the company one of the largest paper manufacturers in the world. Roger Stone's idea was to buy capacity from disenchanted or financially distressed producers.

In that way he would neither increase industrywide capacity, possibly leading to a bust in container prices, nor incur the tremendous costs of building new plants and buying new machines. In a May 1, , interview with Financial World Stone said, "We were willing to make that commitment when demand was down. That is when you should commit, when nobody else really wants to. Then in he had Stone Container buy an equity position in Dean-Dempsy Corporation, a wood-chip fiber source.

The rest of the s saw Roger Stone making larger acquisitions. His was a leveraged buyout strategy. With banks and junk bond innovator Michael Milken and the then powerful Drexel Burnham Lambert supplying ready cash, and chief financial officer Arnold Brookstone devising ingenious financial strategies, Stone Container quintupled its annual capacity to 4.

Like his predecessors, Roger Stone bought during down times, and paid his debts when prices rose. His feeling for the business cycle was keen. Stone was able to buy three highly efficient paper mills, 15 corrugated box plants, five bag plants, and the cutting rights to 1. After the Continental purchase, containerboard prices increased, and Stone was able to pay down its debt significantly.

With this purchase, Stone's debt again soared, to about 70 percent of capitalization. The deal also gave Champion the option to buy 12 to 14 percent of Stone's stock at a higher price in the early s.

The Stone family, however, still owned 37 percent of the company. The acquisition of Southwest's two large pulp and paper mills, 19 corrugated container plants, and assorted plywood and veneer plants, lumber mills, railroads, and private fee-timber made Stone the nation's largest producer of brown paper, including corrugated boxes, paper bags, linerboard, and kraft paper.

According to some analysts, the acquisitions were taking a toll. By selling shares in the new company, which was still controlled by Stone Container, the company obtained cash and spun off a portion of its own debt. While Brookstone was dealing with the debt, the economy was running hot. Coal transport and infrastructure. Existing coal plants in Europe. Environmental issues of coal. Global Fossil Infrastructure Tracker.

Oil and gas infrastructure. Proposed coal mines in China. Proposed gas plants. Steel plants. View source. Jump to: navigation , search. Tools What links here. But if you believe US analysts, that might be an overestimate; they reckon the outlook is positively rosy for Smurfit Stone. Out of 10 brokers covering the stock, seven are recommending a strong buy, two a buy and one a hold.

Brokers have been wrong before but the fundamentals look better for Smurfit Stone. If the linerboard price increase doesn't hold, it has good operating margins to ride it out, but that is not really an attractive scenario. However, if it sticks, and others also hold, then Smurfit Stone is geared to reap the rewards. See a sample.

Please update your payment details to keep enjoying your Irish Times subscription. Smurfit Stone fundamentals look positive Fri, Aug 2, , More from The Irish Times Construction. Personal Finance. Home energy upgrades are now more important than ever. The Dublin start-up making the future better with an appreciation for innovation.

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