Greetings and welcome to the Sonoco Products Company second quarter earning conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It is now my pleasure to introduce your host Mr. Roger Schrum, Vice President of Investor Relations for Sonoco Products Company. Thank you Mr. Schrum, you may now begin.

Thank you, Jacky. Good morning everyone and welcome to Sonoco’s 2009 second quarter earnings investor call. This call is being conducted on July 16, 2009. Joining me today are Harris DeLoach, Chairman, President and Chief Executive Officer; and Charlie Hupfer, Senior Vice President and Chief Financial Officer. Our financial results for the second quarter were released before the market opened today and are available on our website at www.sonoco.com. Let me begin by stating that today’s investor call may contain a number of forward-looking statements that are based on current expectations, estimates and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties; therefore actual results may differ materially. Additional information about factors that could cause different results and information about the use by the company of non-GAAP financial measures is available in our annual report and on the company’s website. With that brief introduction, I’ll now turn it over to Charlie Hupfer.

Okay thank you Roger. Today Sonoco reported second quarter EPS of $0.33 a share and base EPS of $0.41 a share. Base EPS of $0.41 a share compares with our guidance of $0.34 to $0.38, so we were very pleased with the quarter. We were especially pleased with the added strength we saw in June in our US tube and paper operation. Let me begin by reconciling GAAP net income to base net income. GAAP net income was $33.6 million or $0.33 per share, versus a base net income of $40.9 million or $0.41 a share. The difference is restructuring. During the quarter we took a $10.4 million pre-tax charge related to several announced plant closure and a reduction in force. The after-tax charge was $7.3 million. So if we add that $7.3 million to GAAP net income of $33.6 million, you will arrive at $40.9 million or $0.41 a share, net of base EPS. Last year’s net income included a pre-tax restructuring charge of $10.8 million or $4.6 million after tax and after minority interest. So if we add back $4.6 million to last year’s net income of $58 million, you arrive at $62.6 million or $0.62 a share. On a based earnings basis, EPS is $0.41 this year versus $0.62 last year, and incremental pension expense accounts for $0.08 of that different. With these restructuring adjustments in mind, let me read out now for you the full comparative income statement. First starting at the top, sales were $864.2 million or 20.5% below last years $1.866 million. Volume and foreign exchange were the big drivers of the year-over-year short fall. Positive sale is $705.9 million versus last year’s $891.9 million. The gross profit margin, if you make that calculation is 18.3% and that compares with 17.9% last year, and…

(Operator Instructions) Your first question comes from Claudia Hueston - J.P. Morgan/ Jason Company. Claudia Hueston - J.P. Morgan/ Jason Company: I was hoping you could just elaborate a little bit on the improvement that you saw in June in the industrial business. Maybe just comment on sort of where you’re seeing it and if there is any way to sort of gage customer center or customer visibility today versus a couple of months ago, that will be helpful. Then also I was hoping you could just comment on how prepared you feel the Tube and Core system is for a pickup in volumes as you move to the second half.

We saw general improvement, I guess starting the last weak in May, maybe the last two weeks in May that carried on into June, and it was across all the segments in the business. I think around two tones were up about 6%, but we saw versus paper mill, core was up about 4.5%, film was up close to 10%. Tape and specialty up about 10% and next our margins were up almost 16%. So we clearly saw that improvement and we’ve seen that improvement carry over into July and they remain strong. The remains relatively strong like it was in June. We would not have a capacity problem that we could certainly take any problem uptake with our problem. Claudia Hueston - J.P. Morgan/ Jason Company: Okay, and then if you are looking at the US versus Europe, have you seen any signs of a pickup in Europe as well or is this pretty much US focus?

It’s pretty much around the world, expect for Europe. We’ve seen it in Asia, we’ve seen in South American and obviously North America; we talked about it, but Europe is still bouncing along like it has been, although it was up sequentially quarter-over-quarter, there’s still not a lot of improvement. Claudia Hueston - J.P. Morgan/ Jason Company: Then just finally, just on customer visibility, I mean do you feel like customers are more optimistic yet or is it just sort of that there has been a little bit of a pick up.

Claudia, we’ve seen more optimism when I was talking about these, that’s one that you’re talking about.

Your next question comes from George Staphos - Bank of America/ Merrill Lynch. George Staphos - Bank of America/ Merrill Lynch: I have just this quick question just to clarify, the percentage that you just gave when you were answering Claudia’s question. Year-on-year I’m assuming those are sequential changes.

They are sequential changes from the first quarter George. George Staphos - Bank of America/ Merrill Lynch: In term, what kind of change in operating rates did you see on the Sonoboard machines? I mean would you be 6% to 10% in that range.

Probably so. The quarter was somewhat a tale of two cities. In some regards April was much like March and most of this up-tick came as I said in the last week or so of May and continued through June as you did your last. George Staphos - Bank of America/ Merrill Lynch: Today, what are the operating rates, right now as we speak?

I think operating rates right now probably are in the mid 90% range. George Staphos - Bank of America/ Merrill Lynch: Given what’s been happening with OCC and given what you’ve seen in operating rates, do you have the opportunity in your non-contractual business to go and raise pricing on Sonoboard you think.

George I wouldn’t speculate on that right now. I think OCC is probably going to continue to drift off based on what we’re seeing now and obviously we’re going to look at that and make some decisions, but honestly we haven’t crossed that bridge at this point. George Staphos - Bank of America/ Merrill Lynch: Okay, I’ll leave that question to the side for know. Two quick ones on consumer; you mentioned in the press release, something I know you touched on in the first quarter as well that you ultimate expect some of these input cost benefits just paid or to lessen in their impact, do you expect that that will be the case in the third quarter given what you know. In other words you’ll be neutral year-on-year in terms of the past variance.

I expect we will see past cost variance through the balance of this year George. George Staphos - Bank of America/ Merrill Lynch: Okay and then lastly with CorrFlex. Now obviously Rob comes from the business, but he has additional responsibilities. How do you feel about the overall bench strength within consumer and packaged services and being able to manage through, obviously a fairly choppy economy; and I vaguely remember a little, correct me if I’m wrong, that yet one point in time had expected, given what customers were indicating a pick up CorrFlex, so did the customers just pull their programs if I’m remembering correctly? Thanks, guys.

George, I’m not the least bit concerned about the bench strength on the consumer side of the business and we wanted to get Rob back engaged in his services side, because he knows his services side so very well, but also wanted to run Rob responsibilities, so it’s a great opportunity to do. I’m not concerned about the bench strength. You asked about customer pulling, I don’t know that it’s been any pulling as much as same should not materialized and we’ve seen volume pretty significant volume declines in the facts that was dedicated to specific customer. So, without getting into specific side, we’ve seen those down from the mid-30% from the last year to as low as 40% to 50%. So, it’s been an overall weakness in customer, particularly branded customer promotions.

Your next question comes from Ghansham Panjabi - Robert W. Baird & Company. Ghansham Panjabi - Robert W. Baird & Company: cost:

No, I would say it was probably answer to that, we saw some sequential volume decline that we saw from the price increases as we had put it earlier in the year at the same time input cost down that have improved the margins. So, but looking at the back half, is that what you’re talking about? Ghansham Panjabi - Robert W. Baird & Company: No that the back half for the year?

That’s fair.

There’s some delayed pricing that was where that is factored as we talked about in the last conference call, that’s factored into the second half, which serves a bit of an offset against that natural decline that you’re talking about. It’s not a notable difference. Ghansham Panjabi - Robert W. Baird & Company: How is the consumer business performing this benchmarking it against the previous few recessions? Is that sort of within your realm of probability? Is that weaker than you would have expected etc.? Just want to get a sense there.

No, Ghansham I think consumer business is performing exactly as we would expected we way it has in the past.

Your next question comes from Chris Manuel - KeyBanc Capital Markets.

A couple of questions for you first, can you maybe give us an update on what you’re seeing in a competitive landscape particularly here in North America?

In any particular business segment?

In the industrial side.

I don’t know any more less competitive than it has been, we are seeing as OCC has been fallen, we are seeing more pricing activity in that business. I expect with OCC going back up, we’d expect that to subside somewhat, but maybe a little bit more than what we were seeing a quarter ago.

As you look across the business, it sounds like over the last six weeks or so, you’ve seen some up ticks six to eight weeks, but still at levels markedly below where you were let’s say a year ago. How do you prioritize or think about uses of cash with respect to and looking an outside opportunities as well as potential, restructuring or cost activities within your business?

Chris, we are always looking at restructuring the business to make it more cost effective and adjusting that footprint. I would think right now, our use of cash would more on outside opportunities rather than what we need to do internally. Most of what we need to do internally will not consume a lot of cash.

Okay that’s helpful. One last question, you made some adjustments, one of the areas that you did less compared to my model, out of this quarter was on the SG&A side and I would venture to guess some of that had to do with some of the contingency actions you took through that process. Charlie, do you have a rough estimate of some of the wage freeze 401(k) reductions, things that nature. How much that variance stuff was in the quarter?

I wouldn’t think that was much advantage at all in the quarter because the wage increases would not have taken effect until through June 1 to July 1 and 401(k) was not because of way the structure didn’t begin until June 1, so very little Chris.

Okay, so not much in the quarter, but on a going forward basis does it 1 million or 2 million quarter benefit?

Yes.

I think most of the $8.6 million and I talk about in that spending just simply goes back to, we’ve really tightened control over discretionary spending going all the way back early 2008 and that’s what you’re seeing.

That’s what I was trying to gauge was of that portion, but it sounds more like, the new actions was on a go forward basis.

Your next question comes from Al Kabili - Macquarie Capital Advisors.

I guess going to Tubes and Cores, if you could just help us think about exiting June, what the year-over-year decline was in that business on the volume side?

I think Charlie, probably it has that?

I don’t have it for the month of June. Overall it was about 22% and I think that compares with 25% in first quarter. So, most of that favorable difference would have been just in month of June itself, but I don’t have a year-over-year June comparison.

If we think about normalizes of June picked up seasonally 3Q is so bit stronger. I guess, seasonality plus the pickup in June would have suggested a higher. I guess to me 3Q outlook and I’m just wondering, if you could talk through maybe some of the negatives sequentially that might going on in the third quarter versus the second quarter as it in higher OCC prices, what else should we be thinking about there?

Well, I think what we basically did was took the second quarter, which was basically the June run rate and projected that through the balance of the year, but we did not say assume that we will see any more seasonality that there is as of you unless stay before. There is some seasonality in this business, normally we see it in March, we didn’t see it in March and we saw this pickup in June that we basically assume that to balance of year. We did factor into the numbers some OCC costs going up and did not necessarily consider any recovery from that.

I guess, to revisit a previous question on the consumer side. Resin was that a meaningful benefit? It looks like it was in the second quarter that we should think about tempering back in 3Q?

No, that was a big factor in the second quarter and then those businesses as we had basically resets in most of our contracts. So, all that we’ve assume, that we’ve recover whatever resin increase goes in there.

You mentioned, I think there were some price actions taken. I think maybe related to tinplated steel might have been some of them. Is there any effective of pre-buy that could be a headwind that we should be thinking about on that front?

I wouldn’t think so, there is very little pre-buy in our products, generally no more than a couple of weeks at the most because of the storage out of the metal ends would be the exception to that and I don’t think that we’ve seen any pre-buy there either.

On the core flex side, I guess the outlook still looks really tough in the back half. Are you seeing any incremental extra interest from customers on promotions? I know some of these things can be pretty long lead times. So, just from a pipeline perspective, is there any reason for optimism? Are you seeing anything there?

No, that’s really as Charlie said, the basis was that’s owning the low ends of guidance, where it was rather than adding to it. Traditionally, in the four or fives years, we’ve had this business. Its most to the sales come loaded from about May until November and we haven’t seen that this year. We didn’t see this normal up tick. We will see in May and we haven’t seen in June. I’ll say I know that our new product and design is probably at record levels, but they’re not turning into get performers as quickly as we normally what expect to be and we are assuming for balance of the year that we will stay basically this June run rate that we saw.

Okay and then two quick ones, so I guess I am thinking that productivity and savings from restructuring and we have that till may be $12 million on the EBIT line positive for the quarter is that the kind of magnitude, we can expect through about third and fourth quarter as well I know you just took a charge from for additional restructuring, so are there incremental savings that we should be thinking about in the third and fourth quarter?

I would think particularly that we see volume continued through the mill system and through on our industrial businesses that you will see expanding productivity numbers. That’s a very low quarter for us from a productivity standpoint compared to what we normally have and as Charlie said most of that a lot of that occurred in Europe where they cannot flex the workforce and also we had in the early part of the form in North America and in Europe a fair amount of down days in our mills system and hopefully, with some volume, that will change.

Okay and then the last one is on the composite can certainly you seen some good conversion opportunities out of metal into composite can that are you think much meaningful negative outflow out off composite can and in the plastic are you experiencing much meaningful volume changes with regard to that?

Your next question comes from David Leibowitz - Horizon Asset Management.

A few brief ones, your new product introduction on the consumer side are always heavily waited to the end of the year. Given current economic trends, do you see any things out of the ordinary this year?

David, I am not surely mentioned and I think in the quarter we had $45 million of new sales from products which is a record for us for a quarter and I think we have probably as many conversions or new product introductions in the balance of the year is that we had, so it’s going well.

So, you’ll keep up with the standard percentage of total sales from new products this year as we saw last year and before

If we should and I’d be disappointing if we don’t see that.

Some of your key new products last year were introduced on eight particular products rather than the entire line as rollout. Have you seen the entire line let’s take the Nabisco Cookie on the resalable pack whatever, where you are getting more product brands within the category?

We have the one you mentioned with the Nabisco, actually we have a exclusivity they have exclusivity that runs for probably and so we had not on that but clearly some of these other introductions that we have expanded beyond that particular brand into the segment.

Great and internationally the zigzagging of the dollar versus the euro would etc., has this played much effect with your reported figures?

Well that $69 million in sales that clearly affected the year-over-year comparison sales again that all translation and it’s a bit of hard to make the calculation and it probably had $2.4 million impact on EBIT, if you just focus on the translation and affect of that. Obviously there is an operating affect it’s probably positive that would even mitigate that further so and that is the EBIT line, by the time you get down to after interest after tax that it’s a pretty negligible number. So we tend to talk about it really only as it affects sales, because it doesn’t affect profits that much.

Lastly turning to the pension shortfalls, the performance of your plans so far this year how does that match up against what was actuarially looked for?

The performance of the plan, we had obviously had a good second quarter and per year-to-date, if I recall correctly, we were at about 4.5% of positive return, so that would be slightly behind an overall assumption of 8.5%.

Your next question comes from Dan Khoshaba - KSA Capital Advisors.

Can you guys comment a little bit on what you’re experiencing in the US core two core market; if anything as a result of some of the competitive activity with just some smaller companies they having some financial difficulties, bigger companies very leveraged some of the well known kind of issues either good or bad?

I think it’s been basically a non-event, Dan. We picked up some volumes probably early in the second quarter, but beyond that we haven’t seen a lot of positive or negative from it, frankly.

Okay, is there an expectation that there is going to be and may be just don’t know, but any significant or material reduction in capacity as a result of some of those difficulties that these companies are having?

Dan, I can slightly like that this market even in good times and bad times, has been more one that has rationalized capacity across all the companies and I would expect that we probably continues well.

Okay and then just one more question on that composite can side of the business; great volumes have been pretty good there. How much of the growth in volume is been a result in your mind? Just a natural kind of counter cyclicality of that business particularly in powered averages and some of those types of product, versus perhaps new product introduction in the market?

Dan, I think most of the growth over last couple of years, I mean that is certainly some kind of technicality to it, but most of it has been from conversions, the conversions of powered formula conversion of coffee and just pure new products going into it.

The coffee is pretty much converted, right? Is that more coffee to convert?

No, there’s a good bit more coffee to convert and now there’s a formula as well.

Your next question comes from George Staphos - Banc of America/Merrill Lynch. George Staphos - Banc of America/Merrill Lynch: A couple of questions on powered infant formula and then composite. I remember reading recently there is been also very good growth and products like aseptic for liquidity packaging and I want to say also formula, so are you’d think any more recent trend to discussion where your customers moving to aseptic or considering that when they would have been considering become positive?

No, we having low specific discussions if we all are that’s not something I would know that much about we’re clearly having the discussions with these same powered infant people about conversions in Europe and Asia and other parts of the world conversions are in Europe and Asia and across the world. George Staphos - Banc of America/Merrill Lynch: Harry, it is possible to ballpark how much more cost effective or may be not, but I would imagine would be the powdered infant formula package for per equivalent ounce would be versus something like the aseptic?

George, I don’t know that. Beyond that, I don’t think have been answered. George Staphos - Banc of America/Merrill Lynch: Just want to be clear on consumer you expecting that margins will continue to improve in the back half of the year even though you may see some lessening benefit from raw material cost declines that you hear that correctly?

I think, what Charlie said is that, we actually had not recover all of the price increases in the second quarter because of the timing and some of the contracts that we have and some of those increases will come in June and July and so, they will certainly accelerate during the balance of the year. So, I think that’s really the answer. George Staphos - Banc of America/Merrill Lynch: So, therefore margins should head higher because of that?

They should certainly stay where they are or get higher, yes. George Staphos - Banc of America/Merrill Lynch: Now with flexibles, obviously it’s been a tough economic environment. We had heard recently, you picked up some reasonably sizable confectionery business within flexibles. Volumes were down 11%. Help us to understand, if there are any other factors in terms of the volume decline other than just the environment that we read about in the papers. What do you think the more normal volume run rate for that business should be in percentage terms?

Let me respond first about confection business. One, we have gotten is we have not won very much. We have of it yet because this inventory that somebody asks. I want to tell you one, we got a feel by percentages, [Inaudible] beyond that I would think to go; we had a lot to come in. George Staphos - Banc of America/Merrill Lynch: Maybe last question on CorrFlex and I’ll turn it over. You owned the business for the last four or five year, obviously the great business really on conflict by the economy in resent years. What you think that and you obviously report within Pack Services. Round numbers, what do you think the cumulative profits on an operating profit basis then for CorrFlex, since you bought it?

Up until last 12 months, it’s been a very good profitable business, George and certainly the kind of returns, we would have expected to return when we bought it. I think clearly, we’ve seen in the falloff in that business in the last 12 months and have you getting our arms around that.

Your next question comes from Amy Norflus - Pilot Advisors

Can you talk a little about the tube and core? I know Chris talked about the competition, but more of the health of the competition. What’s going on with that the two other competitors from your standpoint?

Well, the health of the competitors, the two largest competitors that we have is pretty well documented. Caraustar field for chapter 11 on June 1, I think the Europe group has files some 8-K that talk about forbearance of debt and other things. I’ll leave that to you do your research, rather than me making a lot of comments about it.

Have you picked up a lot of business from that?

No, we had not at this point in time. I think that was an earlier question. It’s been basically, we picked up a little bit of this just, but not a lot.

Your next question comes from Tim Petrycki - Jesup & Lamont Securities. Tim Petrycki - Jesup & Lamont Securities: Maybe one, given how weak Western Europe has been, maybe speaks to the competitive requirements there and kind of any opportunity you guys may have?

That is a more competitive marketplace than we have in U.S. and a lot of that competition that volume has been in Italy and a lot of that competitions in Italy. So, I think that as it relates to the U.S. We haven’t seen a turnaround in the economy and we got a bit more difficult competitors situation there. So, it’s probably more volume sensitive then we might otherwise it happier. Tim Petrycki - Jesup & Lamont Securities: Given the volume numbers over there, is there a chance for consolidation or rationalization over there?

Let’s get an opportunity for that just simply because there is some more small apply was in that marketplace. So, that’s a correct.

Your next question comes from Joshua Zaret - Longbow Security

Can you discuss what’s going on Matrix in particular on progress made in loading the St. Louis plant?

We had picked up some new business from the St. Louis plant from a large consumer company that will help that plant immensely. Joshua Zaret – Longbow Security: Is that plant now fully loaded? Or is there still more business to put in?

This would fill up the equipment that is in that plant. There is space for additional equipment. The equipment that is in there will be fully loaded.

Thank you. There are no further questions at this time. I would like to hand the floor back over to management for any closing comments.

Thank you again Jacky. Let me again thanks all of you for joining us today. We certainly appreciate your interest in the company and as always, if you have any further questions please don’t hesitate to give us a call. Thank you again.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.