Economic impact of Sonoco, ‘the heartbeat of Hartsville,’ far-reaching

jwilkinson@thestate.comMarch 26, 2013 

— Global packaging giant Sonoco contributes more than $1 billion a year to South Carolina’s economy, creating nearly 9,300 jobs and generating more than $473 million in income for South Carolinians, according to a study released Tuesday by USC’s Moore School of Business.

But to its host community of Hartsville, a town 7,500 people in Darlington County, the company is more than an economic engine, it’s the lifeblood for everything from the arts and education to business recruitment and downtown revitalization.

“They have their hands – not in a controlling way, but in a giving way – in every organization in Hartsville,” said Johnna Shirley, president of the Greater Hartsville Chamber of Commerce. “They are a good big brother to our community.”

They are also an example of how growing or recruiting corporate headquarters, especially in a state like South Carolina with no Fortune 500 companies based here, can speed up the recovery from the worst recession in a lifetime and revitalize communities, especially in rural areas.

“We want a hundred more companies like Sonoco in South Carolina,” Moore School economist Joey Von Nessen said during a press conference Tuesday unveiling the study. “But there are only a handful of companies in the state that have that type of impact.”

Beginnings

The city of Hartsville began when Thomas Edward Hart moved his wife Hannah from nearby Society Hill in the early 1800s to make their home in the area called Welsh Neck, according to the town’s website.

The town that eventually sprang up was named in 1837 after the successful farmer – who had fathered eight children. That same year, Major James Lide Coker was born and his family settled in the area.

Coker was educated at The Citadel and attended Harvard to study the scientific principles of farming. He was engaged in farming before the Civil War, and after a hip injury in battle, returned home to Hartsville.

With the help of his father, Coker rebuilt farmlands destroyed by Union Gen. William T. Sherman’s army and converted a plantation commissary into a store, the J.L. Coker & Co. Major Coker went on to found a bank and Welsh Neck School, which is now Coker College. He also founded several companies including, in 1899, the company now known as Sonoco.

Today, Sonoco has 350 manufacturing facilities in 34 countries that market to 85 nations around the world. It makes consumer packaging for industries ranging from food to construction to automotive. But its headquarters remain firmly rooted in South Carolina.

“We have grown from a tiny acorn to a mighty oak,” Sonoco chairman and chief executive Harris DeLoach said.

Rebirth of manufacturing in S.C.

The study shows that the now 114-year-old company has been a major contributor to the rebirth of manufacturing in South Carolina that has taken place since the depths of the recession in 2007-2009. Sonoco, which employs more than 1,700 people statewide, supports an extensive supply chain network throughout the state.

“Sonoco’s impact is wide-ranging and extends to every county in South Carolina,” Von Nessen said.

The areas of South Carolina benefitting the most from Sonoco’s economic activities are:

The Upstate, which receives $403 million annually, mostly in purchases from suppliers

•  The Pee Dee, $402 million, most of which is wages and employee household spending

•  The Midlands, $195 million, also on the supply chain.

In addition, Sonoco’s $1 billion annual economic impact contributes nearly $35 million to state tax revenue each year.

Still, for Hartsville and the Florence-Darlington region, Sonoco remains the major economic driver, comprising about 5 percent of the area’s total economic activity.

The presence of the corporate headquarters also leads to higher wages for workers – such as executives, researchers and engineers – particularly in the Pee Dee region.

The average wage of those jobs is $1,229 per week, an amount that is more than $500 higher than that of the average South Carolina worker, Von Nessen said.

But it’s not just the wages that keep Hartsville afloat. The company donates millions of dollars a year to community projects and organizations, such as downtown revitalization, Coker College, the YMCA and arts programs.

“Sonoco, in many respects, is the heartbeat of Hartsville,” Von Nessen said.

A model to follow

But Sonoco’s story is rare. Most small towns in South Carolina that grew up around industries, such as textile mills, lost those plants long ago. Some are lucky to have attracted manufacturing projects, such as tire plants in Sumter and Aiken.

But South Carolina still has a long way to go in growing and attracting more corporate headquarters, economists say.

Among the problems:

•  The state’s public education is subpar, particularly in rural areas, making it less attractive to relocating executives.

•  The state has no major city to serve as a magnet to large companies.

•  The state’s infrastructure – particularly airports – needs improvement.

As a result, the state should concentrate on growing its own companies, which in turn will have corporate headquarters here, the economists said. They also should focus on attracting regional and national headquarters for multinational companies, such as French tire maker Michelin, whose North American corporate headquarters is in Greenville.

“We have to target the right kind of companies,” S.C. Commerce Secretary Bobby Hitt said, noting that “Sonoco was here before South Carolina was cool.”

SONOCO’S IMPACT A new study by USC’s Moore School of Business shows that the Pee Dee based, global packaging giant Sonoco, contributes $1 billion a year to the SC economy. But its impact in tiny Hartsville is immeasurable. Last year alone, Sonoco gave a total of $2.6 million in philanthropic donations to the Hartsville community, including: • $400,000 to the Governor’s School of Science and Mathematics • $500,000 to an accelerated learning program for high school students • $30,000 to the town’s YMCA, which is located in a former Sonoco building • $100,000 to Coker College, which was established by Sonoco founders

$560,000 to a community development program

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