By Ozge Ibrahim

Packaging Corp of America’s shares rose on Wednesday after the company announced a fall in fourth quarter earnings on Tuesday, due to a slump in industrial demand and consumer spending. Net income in the quarter fell to $30m, or 30 cents a share, from $44m, or 42 cents a share a year ago. Fourth-quarter 2008 net sales fell nearly 6% from a year earlier to $546m. As Britain enters recession for the first time since 1991, it was announced this week that the UK’s Packaging and Films Association (PAFA) issued a letter to warn the British Chancellor of the Exchequer, Alistair Darling, that the industry is under threat. PAFA is concerned that due to the credit insurance system withdrawing essential financial cover on debts to suppliers packaging producers are being forced to take the full credit risk of insurers. Another victim of the global economic downturn is Rio Tinto Alcan. The mining and packaging giant plans to lay off 1,500 staff across Europe as part of a cost cutting exercise. Packaging operations however are expected to be spared the worst of the cutbacks. The Italian label and packaging press manufacturer Gidue has filed for voluntary liquidation after describing the economic situation as “far beyond any possible expectation.” Former supplier Nuova Castagnoli will take-over service of the more than 320 Gidue presses installed worldwide and potential new sales. Gidue's Service Point network will remain in place, according to the company.

From: Packaging Weekly Financial Wrap