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Consumer packaging company Sealed Air Corporation (SEE - Analyst Report) has announced price hikes of 4–9% for most of the products of its Food Care and Product Care units in North America, to combat higher costs for major petrochemical raw materials.

Since Dec 2012, price for polyethylene (PE) has reportedly increased 16% on a cumulative basis, despite low ethane costs due to tightening PE capacity utilizations. Following the latest increase of PE on Sep 1, 2013, suppliers also raised prices.

In order to maintain investments in services and innovation, Sealed Air has increased its product prices. The company’s efforts of minimizing the impact of cost increases will also help customers in the long term. The current price hike will be effective from Nov 1.

The hike is in sync with Sealed Air’s plans to hike prices in the second half of 2013 to counter material cost increases and overcome the weakness in pricing in the first half.

Sealed Air, which is a specialty packaging service provider alongwith Berry Plastics Group, Inc. (BERY - Snapshot Report) and Graphic Packaging (GPK - Snapshot Report),  reported second-quarter 2013 adjusted net earnings from continuing operations of 35 cents per share, which more than doubled from the year-ago earnings. Strong growth in Asia, Middle East, Africa and Turkey (AMAT) and Latin America, benefits from pricing initiatives and focus on manufacturing and operational improvements led to strong earnings.

Sealed Air’s Integration & Optimization Program will lead to cost savings and benefits of approximately $195 million to $200 million by the end of 2014. The company is expected to realize an additional $90 million of benefits in 2013. The company announced an additional restructuring plan with projected annualized savings of $80 million by 2015.

Elmwood Park, NJ-based Sealed Air is a major specialty packaging service provider to a diverse set of end markets. The company operates in the United States and in 50 other countries with packaging and performance-based materials and equipment systems serving food, medical, and an array of industrial and consumer applications.

Sealed Air currently retains a Zacks Rank #4 (Sell). Sonoco Products Co. (SON - Analyst Report) also belongs to the packaging industry and holds a Zacks Rank #2 (Buy).

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