SONOCO PRODUCTS CO, 10-K, 1996-03-27

SONOCO PRODUCTS CO
10-K, 1996-03-27
PAPERBOARD MILLS

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.
20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 1-11261

SONOCO PRODUCTS COMPANY

INCORPORATED UNDER THE LAWS I.R.S. EMPLOYER IDENTIFICATION
OF SOUTH CAROLINA NO. 57-0248420

POST OFFICE BOX 160
HARTSVILLE, SOUTH CAROLINA 29551-0160

TELEPHONE: 803-383-7000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
Title of each class Name of exchange on which registered
- ----------------------------------- ------------------------------------
<S> <C>
No par value common stock New York Stock Exchange, Inc.
Series A Cumulative Preferred Stock New York Stock Exchange, Inc.
</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]

The aggregate market value of voting stock held by nonaffiliates of the
registrant (based on the New York Stock Exchange closing price) on March 3,
1996, was $2,483,756,350. .

As of March 3, 1996, there were 91,147,022 shares of no par value common stock
outstanding.

Documents Incorporated by Reference
Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 1995, are incorporated by reference in Parts I, II and IV;
portions of the Proxy Statement for the annual meeting of shareholders to
be held on April 17, 1996, are incorporated by reference in Part III.

<PAGE> 2

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

PART I

ITEM I. BUSINESS
- ----------------

The Company

The Company, a South Carolina corporation founded in Hartsville, South
Carolina in 1899, is a major global manufacturer of paperboard-based and
plastic-based packaging products. The Company is also vertically
integrated into paperboard production and recovered paper collection.
The paperboard utilized in the Company's packaging products is produced
substantially from recovered paper. The Company operates an extensive
network of plants in the United States and has subsidiaries in Europe,
North America, South America, Australia and Asia, and affiliates in
Canada, Japan, France and Italy. The Company's business is organized by
global product lines in order to leverage its U.S. customer base, to take
advantage of synergies from its worldwide operations and to serve its
customers worldwide on a timely basis and with consistent quality.

The Company serves a wide variety of industrial and consumer markets.
Industrial markets, which represented approximately 58% of the Company's
sales in 1995, include paper manufacturers, chemical and pharmaceutical
producers, textile manufacturers, automotive manufacturers, the wire and
cable industry and the building and construction industry. Consumer
markets, which represented approximately 42% of the Company's sales in
1995, include food and beverage processors, the personal and health care
industries, supermarkets, retail outlets, household good manufacturers
and consumer electronics. The Company believes that it is a leading
producer in most markets served.

The Company's operations are divided into three segments (two domestic
and one international) for financial reporting purposes. Domestic
segments include Converted Products and Paper. The Financial Reporting
For Business Segments Table as shown in Note 18 of the Company's 1995
Annual Report to Shareholders, which is included as Exhibit 13, presents
selected financial data by major lines of business or segments for each
of the past three fiscal years. This table is hereby incorporated by
reference herein and should be read in conjunction with the Management's
Discussion and Analysis of the 1995 Annual Report to Shareholders, which
is also hereby incorporated by reference herein.

I-1

<PAGE> 3

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM I. BUSINESS, CONTINUED
- ----------------

Acquisitions/Dispositions

Acquisitions over the past five years have been an important part of the
Company's strategy for growth. The 1992 acquisition of the Trent Valley
paper mill in Trenton, Ontario, Canada, provided the Company with a new
forming technology that improves the dimensional stability of paperboard,
a critical property in certain market segments. During 1993, the Company
purchased Crellin Holding, Inc., an international manufacturer, designer
and marketer of molded plastic products. The Company also completed the
acquisition of the OPV/Durener Group, Germany's second largest
manufacturer of tubes and cores. In October 1993, the Company acquired
Engraph, Inc., creating the opportunity to grow into new packaging
markets. These markets included pressure-sensitive labels and package
inserts, flexible packaging, screen process printing and paperboard
cartons and specialities. During 1994, the Company acquired M. Harland &
Son Limited, a leading producer of pressure-sensitive roll labels and
roll-label application equipment headquartered in the United Kingdom.

During 1995, the Company completed several acquisitions which were
strategically important both in the U. S. and internationally. In
January, the Company acquired the remaining 50% interest in the
CMB/Sonoco joint venture. CMB/Sonoco is a producer of composite cans
with manufacturing facilities in England and France. In March, the
Company purchased a flexible packaging plant in Edinburgh, Ind., from
Hargro Flexible Packaging Corporation. The Edinburgh plant, which
further enhances the Company's flexible packaging business, manufactures
packaging for the confection, snack food and pharmaceutical markets. In
October, the Company completed the acquisition of the assets of Cricket
Converters, Inc., of Hightstown, N.J., a major manufacturer of high-
quality, pressure-sensitive labels for the pharmaceutical and health
care markets. In November, the Company formed a joint venture to produce
paperboard in Shanghai, China, and in December acquired a minority
interest in Demolli Industria Cartaria SRL, a manufacturer of tubes and
cores in Italy. Also during 1995, the Company purchased three converting
operations and a paper mill in Brazil, a small tube and paper manufacturer
in France and three recovered paper collection plants in the United
States.

Competition

The Company believes it has several competitive advantages in the
industrial and consumer markets it serves. First, the Company
manufactures and sells many of its products globally. As a result, the
Company believes it has the capability to respond effectively to
customers seeking national or international supply agreements. Secondly,
the Company believes its technological leadership, reputation for
quality and vertical integration has enabled the Company to coordinate
its product development and global expansion with the rapidly changing
needs of its major customers, who demand high-quality, state-of-the-art,
environmentally compatible packaging. Thirdly, the Company and its
customers have

I-2

<PAGE> 4

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM I. BUSINESS, CONTINUED
- ----------------

Competition, Continued

developed international standards to reduce costs and increase quality.
Finally, the Company believes that its strategy of vertical integration,
via its unique interrelationship between its industrial products and
papermaking operations, increases its control over the availability and
quality of raw materials used in its products. The Company believes
investments made in the fast growing flexible packaging and
pressure-sensitive label businesses have enhanced its competitive position
with new products in existing markets while providing new market
opportunities.

Converted Products Segment - The Company is a U.S. market leader in nearly
all of its primary businesses, including the manufacture of high-value
tubes, cores and cones; composite cans; fibre and plastic drums; nailed
wood and metal reels and pressure-sensitive labels. The Company is the
second U.S. leading producer of fibre partitions. The Company is the
leading U.S. producer of high-density, high-molecular weight, plastic
carry-out grocery bags. The Company also produces plastic bags for the
high-volume retail market and the convenience store market, and film for
the agricultural market. In 1995, the Company completed a $25-million
expansion project, expanding capacity by about two billion bags annually,
to accommodate additional business resulting from the exit of a competitor
during 1994.

Paper Segment - The domestic Paper Division, with 12 plants and 22
machines, is one of the world's leading producers of recycled paperboard,
most of which is consumed internally. The Company has a strong degree of
vertical integration with the paper-converting business. This tactic,
combined with advancing technology and a strong recovered paper operation,
helps to keep the Company a competitive producer.

International - Having operated internationally for more than 70 years,
the International segment has been important in the Company's ability to
serve and retain many of its customers that have international packaging
requirements. The Company considers its ability to serve its customers
worldwide in a timely, consistent and cost-effective manner a competitive
advantage.

The Company's products are sold in highly competitive market
environments. Within each of these markets, supply and demand are the
major factors controlling the market environment. Additionally, and to a
lesser degree, these markets are influenced by the overall rate of
economic activity. Throughout the year, the Company remained highly
competitive within each of the markets served. None of the Company's
segments is seasonal to any significant degree. The Management's
Discussion and Analysis of the 1995 Annual Report to Shareholders
discusses the various segments of the Company and is hereby incorporated
by reference herein.

I-3

<PAGE> 5

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM I. BUSINESS, CONTINUED
- ----------------

Raw Materials

The principal raw materials used by the Company are plastic resins,
metal, pulpwood, recovered paper and paper. With the exception of
pulpwood, recovered paper and paper, the Company's raw materials and
supplies are purchased from a number of outside sources; however, the
supply is considered adequate to meet the Company's requirements.
Company-owned timberlands, timber-cutting rights and suppliers are
believed to be sufficient to assure the future availability of pulpwood.
Recovered paper used in the manufacture of paperboard is purchased either
directly from suppliers near manufacturing operations or through the
Company's subsidiary, Paper Stock Dealers, Inc.

Although the Company considers the supply of raw materials to be adequate
to meet its needs, the majority of raw materials are subject to price
volatility as experienced in 1995 and 1994. In the early part of the
year, costs for primary raw materials, such as recovered paper, plastic
resins, aluminum and steel, were extremely high, resulting in selling
price increases, where possible. Later in the year, there were selected
selling price decreases to reflect the falling costs of some raw
materials. On balance, the Company was able to recover the cost increases
in 1995. Although cost pressures on raw materials are expected to be a
continuing factor, the Company expects to mitigate any adverse earnings
impact over time through selling price increases. The Company has also
been strengthening its fibre recovery system over the past two years.
Three paper collection operations were acquired during the year to expand
the Company's collection base. In addition, the Company continues to work
on such arrangements as joint ventures and partnership agreements to
strengthen its supply stability.

Backlog

Most customer orders are manufactured with a lead time not to exceed three
weeks. Domestic long-term contracts, primarily for composite cans, exist
for approximately 18% of trade sales (no one contract exceeds 3%). These
contracts, which are for a specific duration, generally include price
escalation provisions for raw materials, labor and overhead costs. There
are no significant long-term purchase contracts because the Company
considers the supply of raw materials adequate to meet its needs.

I-4

<PAGE> 6

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM I. BUSINESS, CONTINUED
- ----------------

Patents, Trademarks and Related Contracts

No segment of the business is materially dependent upon the existence of
patents, trademarks or related contracts.

Research and Development

The Company has 113 employees engaged in new product development and
technical support for existing product lines. Company-sponsored spending
in this area was $12.7 million, $12.1 million and $12.9 million in 1995,
1994, and 1993, respectively. Spending focused on projects related to
Sonoco's primary businesses and reflects a commitment to ensure that the
Company is the technology leader in markets served. Customer-sponsored
spending has been immaterial for the past three years.

Environmental Protection

The Financial Position, Liquidity and Capital Resources section of the
Management's Discussion and Analysis in the 1995 Annual Report to
Shareholders provides the required information and is hereby incorporated
by reference herein.

Employees

The number of employees at December 31, 1995, was approximately 19,000.

Financial Information about Foreign and Domestic Operations and Export
Sales

The Company has subsidiaries and affiliates operating in twenty-nine
countries. The primary operations of the international subsidiaries are
similar to the Company's domestic business in products and markets
served. The Management's Discussion and Analysis and Notes 16 and 18 to
the Financial Statements of the Annual Report to Shareholders are hereby
incorporated by reference herein. United States export sales are
immaterial.

I-5

<PAGE> 7

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 2. PROPERTIES
- ------------------

The main plant and corporate offices are located in Hartsville, South
Carolina. The Company has 181 branch or manufacturing operations in the
United States, 25 in Canada and 73 in 27 other international countries.

Information about the Company's manufacturing operations by segment
follows:

Segment
-------------------------------
Converted
Products Paper International
--------- ----- -------------
<S> <C> <C> <C>
Number of Plants:
Owned 70 31 47
Leased for terms up to ten years
with options to renew for
additional terms 71 5 51
Leased with lease purchase agreements 3 1
--- -- --
Total manufacturing operations 144 37 98
=== == ==
</TABLE>

The Company believes that its properties are suitable and adequate for
current needs and that the total productive capacity is adequately
utilized.

ITEM 3. LEGAL PROCEEDINGS
- -------------------------

In the normal course of business, the Company is a party to various legal
proceedings incidental to its business and is subject to a variety of
environmental and pollution control laws and regulations in all
jurisdictions in which it operates. On May 3, 1994, a civil action was
filed against the Company in the United States District Court for the
District of Massachusetts by Integrated Bagging Systems Corporation and
BPI Packaging Technologies, Inc. for alleged patent infringement. The
suit also seeks to have a patent owned by the Company declared invalid.
There were no new developments in this matter during 1995, and the
Company believes this lawsuit is without merit. The Company continues to
vigorously defend its position and expects to prevail.

Although the level of future expenditures for legal and environmental
matters is impossible to determine with any degree of probability, it is
management's opinion that such costs, when finally determined, will not
have a material adverse effect on the consolidated financial position,
liquidity or results of operation, of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------

None.

I-6

<PAGE> 8

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
- -------------------------------------------------------------------------
MATTERS
- -------

Market and Market Prices of Common Stock

The Company's common stock began trading on the New York Stock Exchange
(NYSE) March 8, 1995, under the stock symbol "SON". Prior to that date,
the common stock was traded on the NASDAQ National Market System. The
Comparative Highlights in the 1995 Annual Report to Shareholders
(Exhibit 13 of this report) shows, by quarter, the high and low price on
the NASDAQ market for the period January 1, 1994 through March 7, 1995,
and the NYSE for the period March 8, 1995 through December 31, 1995, and
is hereby incorporated by reference herein.

Approximate Number of Security Holders

There were approximately 33,000 shareholder accounts as of March 3,
1996.

Dividends

Information required is included in the Comparative Highlights in the 1995
Annual Report to Shareholders, and is hereby incorporated by reference
herein.

On April 19, 1995, the Board of Directors declared a five percent stock
dividend for all shareholders, and of record May 19, 1995, to be
distributed on June 9, 1995.

ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------

The Selected Eleven-Year Financial Data in the 1995 Annual Report to
Shareholders provides the required data, and is hereby incorporated by
reference herein.

II-1

<PAGE> 9

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------

The information presented under Management's Discussion and Analysis of
the 1995 Annual Report to Shareholders is hereby incorporated by
reference herein.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------

Consolidated Financial Statements

The consolidated financial statements, notes to consolidated financial
statements and the report of Certified Public Accountants for the Company
included in the 1995 Annual Report to Shareholders are hereby incorporated
by reference herein.

Supplementary Financial Data

The information set forth under "Comparative Highlights" in the 1995 Annual
Report to Shareholders is hereby incorporated by reference herein.

II-2
<PAGE> 10

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Directors of
Sonoco Products Company:

Our report on the consolidated financial statements of Sonoco Products Company
has been incorporated by reference in this Form 10-K from page 45 of the 1995
Annual Report to Shareholders of Sonoco Products Company. In connection with
our audits of such financial statements, we have also audited the related
financial statement schedule listed in the exhibit index of this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic fianancial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

/s/ Coopers & Lybrand L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.

Charlotte, North Carolina
January 31, 1996

II-3

<PAGE> 11

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- -----------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------

None.

II-4

<PAGE> 12

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -----------------------------------------------------------

Identification of Directors

Information about the Directors of the Company and Compliance with the
Securities Exchange Act of 1934 is shown on pages 4 through 10 and page
27, respectively, of the Definitive Proxy Statement (included as Exhibit
99-1 of this report) and is hereby incorporated by reference herein.

Identification of Executive Officers
<TABLE>
<CAPTION>

YEAR FIRST
ELECTED BUSINESS EXPERIENCE
NAME AGE POSITION OFFICER DURING LAST FIVE YEARS
---- --- -------- ---------- ----------------------
<S> <C> <C> <C> <C>
C. W. Coker 62 Chairman of the 1961 Present position since 1990.
Board and Chief
Executive Officer

P. C. Browning 54 President and Chief 1993 Present position since February
Operating Officer 1996, previously having served as
Executive Vice President - Global
Industrial Products and Paper
Divisions since 1993. President,
Chairman and Chief Executive
Officer - National Gypsum Company
(manufacturer and supplier of
products and services used in
building and construction) since
1990.

T. C. Coxe, III 65 Senior Executive 1977 Present position since 1993, Vice
President previously having served as
Executive Vice President since 1985.
Retired February 1996.

L. Benatar 66 Senior Vice President 1993 Present position since 1993.
Chairman and Chief Executive Officer
of Engraph, Inc. (printer and
fabricator of roll labels, decals,
specialty paperboard items and
flexible packaging) since 1981. Retirement
announced for Spring 1996.

B. W. Campbell 46 Vice President - 1996 Present position since February 1996,
Information previously having served
Services as Staff Vice President - Information Services
since 1991.
</TABLE>

III-1

<PAGE> 13

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, CONTINUED
- -----------------------------------------------------------

YEAR FIRST
ELECTED BUSINESS EXPERIENCE
NAME AGE POSITION OFFICER DURING LAST FIVE YEARS
---- --- -------- ---------- ----------------------
<S> <C> <C> <C> <C>
A. V. Cecil 54 Vice President - 1996 Present position since January 1996.
Investor Relations Prior to joining the Company, was
and Corporate with National Gypsum Company as
Communications Vice President - Corporate Communi-
cations & Investor Relations since 1993
and Vice President - Corporate Public
Affairs since 1990.

C. W. Claypool 60 Vice President - 1987 Present position since 1987.
Paper Division

P. C. Coggeshall, Jr. 52 Vice President - 1979 Present position since 1991.
Administration

H. E. DeLoach, Jr. 51 Executive Vice 1986 Present position since February 1993,
President previously having served as
Group Vice President since
October 1993, Vice President -
Film, Plastics and Special
Products since February 1993
and Vice President - High
Density Film Products Division
since 1989.

C. A. Hartley 47 Vice President - 1995 Present position since 1995,
Human Resources previously having served as Vice
President - Human Resources with Dames
& Moore since 1994 and Vice President -
Human Resources with National Gypsum Company
since 1991.

F. T. Hill, Jr. 43 Vice President and 1987 Present position since 1995,
Chief Financial previously having served as Vice
Officer President - Finance since 1994 and Vice
President - Industrial Products North
America since 1990.

R. E. Holley 53 Vice President - 1987 Present position since 1993,
High Density previously having served as
Film Products Vice President - Total Quality Management
since 1990.
</TABLE>

III-2

<PAGE> 14

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, CONTINUED
- -----------------------------------------------------------
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED BUSINESS EXPERIENCE
NAME AGE POSITION OFFICER DURING LAST FIVE YEARS
---- --- -------- ---------- ----------------------
<S> <C> <C> <C> <C>
C. J. Hupfer 49 Vice President, 1988 Present position since 1995,
Treasurer and previously having served as
Corporate Secretary Treasurer since 1988.

J. R. Kelley 41 Vice President - 1994 Present position since 1994,
Industrial previously having served as
Products Division - Division Vice President - Industrial
North America Industrial Container since 1990.

R. L. McGowan, Jr. 44 Vice President - 1996 Present position since February 1996,
Consumer Products, previously having served as Division
U.S. and Canada Vice President and General
Manager - Consumer Products
Division, U.S. and Canada since 1994
and Division Vice President - Sales,
Marketing and Technology - Consumer Products
Division since 1987.

H. J. Moran 63 Executive Vice 1987 Present position since February 1996,
President previously having served as Group Vice
President - Consumer Packaging Group since
1993 and Vice President and General
Manager - Consumer Packaging since 1990.

E. P. Norman, Jr. 59 Vice President - 1989 Present position since 1989.
Technology

M. M. Richardson 61 Vice President of 1996 Present position since February 1996,
Sonoco and President previously having served as Chief
of Sonoco Engraph Executive Officer - Sonoco
Engraph's label, screen printing
and paperboard carton businesses
since 1995, President and Chief
Operating Officer of Engraph
since 1994, Executive Vice
President and Chief Operating
Officer since 1992 and Group Vice
President since 1983.

</TABLE>

Family Relationships
---------------------

C. W. Coker and F. L. H. Coker are brothers and the first cousins of
J. L. Coker and P. C. Coggeshall, Jr.

III-3

<PAGE> 15

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------

Executive Compensation, as discussed on pages 14 - 16 and pages 18 - 23 of
the Proxy Statement, included as Exhibit 99-1 of this report, is
hereby incorporated by reference herein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -----------------------------------------------------------------------

The security ownership of management as shown on pages 12 - 13 of the
Proxy Statement, Exhibit 99-1 of this report, is hereby incorporated by
reference herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------

Transactions with management as shown on pages 23 - 24 of the Proxy
Statement, included as Exhibit 99-1 of this report, is hereby incorporated
by reference herein.

III-4

<PAGE> 16

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- ------------------------------------------------------------------------

Data incorporated by reference from the
1995 Annual Report to Shareholders
(included as Exhibit 13 of this report):

Comparative Highlights (Selected Quarterly
Financial Data)

Management's Discussion and Analysis of
Financial Condition and Results of
Operations

Selected Eleven-Year Financial Data

Consolidated Balance Sheets as of
December 31, 1995 and 1994

Consolidated Statements of Income for
the years ended December 31, 1995, 1994 and 1993

Consolidated Statements of Changes in
Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993

Consolidated Statements of Cash Flows
for the years ended December 31, 1995,
1994 and 1993

Notes to Consolidated Financial Statements

Shareholder Information (Selected Financial Data)

Data submitted herewith:

Report of Independent Accountants (included under Item 8)

IV-1

<PAGE> 17

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
- ---------------------------------------------------------------
FORM 8-K, CONTINUED
- --------

Financial Statement Schedule:

Schedule II - Valuation and Qualifying Accounts

All other schedules are omitted because they
are not required, are not applicable or the
required information is given in the
financial statements or notes thereto.

Exhibits:

<TABLE>
<CAPTION>
<S> <C>
4 Instruments Defining the Rights of
Securities Holders, including Indentures *

10 Material Contracts

11 Computation of Earnings Per Share

13 1995 Annual Report to Shareholders

21 Subsidiaries and Affiliates of the Registrant

23 Consent of Independent Accountants

27 Financial Data Schedule (for SEC use only)

99-1 Proxy Statement, filed in conjunction
with annual shareholders' meeting
scheduled for April 17, 1996

99-2 Form 11-K Annual Report - 1983 and
1991 Sonoco Products Company Key
Employee Stock Option Plans
</TABLE>

* Incorporated by reference to the Registrant's Form S-3 (filed October 4,
1993, File No. 33-50503, and June 6, 1991, File No. 33-40538).

IV-2

<PAGE> 18

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
- ---------------------------------------------------------------
FORM 8-K, CONTINUED
- --------

Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the fourth quarter
of 1995.

IV-3

<PAGE> 19

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------- --------- --------- -------- --------
BALANCE ADDITIONS
AT CHARGED BALANCE
BEGINNING TO AT
OF COSTS AND DEDUC- END OF
DESCRIPTION PERIOD EXPENSES TIONS(1) PERIOD
- ----------- --------- --------- -------- -------
<S> <C> <C> <C> <C>
1995
----

Restructuring Reserve $10,923 $ $ 3,794 $ 7,129
======= ======= ======= =======

Allowance for Doubtful
Accounts $ 6,058 $ 3,168 $ 2,896 $ 6,330
======= ======= ======= =======

1994
----

Restructuring Reserve $27,114 $ $16,191 $10,923
======= ======= ======= =======

Allowance for Doubtful
Accounts $ 6,514 $ 2,546 $ 3,002 $ 6,058
======= ======= ======= =======

1993
----

Restructuring Reserve $39,130 $ $12,016 $27,114
======= ======= ======= =======

Allowance for Doubtful
Accounts $ 3,511 $ 5,537 $ 2,534 $ 6,514
======= ======= ======= =======
</TABLE>

(1) Includes amounts written off, translation adjustments and payments.

IV-4

<PAGE> 20

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 27th day of March
1996.

SONOCO PRODUCTS COMPANY

/s/ C. W. Coker
----------------------------
C. W. Coker
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the following person on behalf of the Registrant and
in the capacities indicated on this 27th day of March 1996.

/s/ F. T. Hill, Jr.
-------------------------------
F. T. Hill, Jr.
Chief Financial Officer
(and Principal Accounting
Officer)

IV-5

<PAGE> 21
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SIGNATURES, CONTINUED
- ----------

/s/ C. W. Coker Chief Executive Officer and
- ----------------------------- Director
C. W. Coker

/s/ P. C. Browning President, Chief Operating Officer and
- ----------------------------- Director
P. C. Browning

/s/ L. Benatar Senior Vice President and
- ----------------------------- Director
L. Benatar

/s/ C. J. Bradshaw Director
- -----------------------------
C. J. Bradshaw

/s/ R. J. Brown Director
- -----------------------------
R. J. Brown

/s/ F. L. H. Coker Director
- -----------------------------
F. L. H. Coker

Director
- -----------------------------
J. L. Coker

/s/ T. C. Coxe, III Director
- -----------------------------
T. C. Coxe, III

/s/ A. T. Dickson Director
- -----------------------------
A. T. Dickson

/s/ R. E. Elberson Director
- -----------------------------
R. E. Elberson

/s/ J. C. Fort Director
- -----------------------------
J. C. Fort

/s/ P. Fulton Director
- -----------------------------
P. Fulton

/s/ B. L. M. Kasriel Director
- -----------------------------
B. L. M. Kasriel

Director
- -----------------------------
R. C. King, Jr.

/s/ E. H. Lawton, Jr. Director
- -----------------------------
E. H. Lawton, Jr.

/s/ H. L. McColl, Jr. Director
- -----------------------------
H. L. McColl, Jr.

/s/ E. C. Wall, Jr. Director
- -----------------------------
E. C. Wall, Jr.

/s/ Dona Davis Young Director
- ------------------------------
Dona Davis Young

IV-6

<PAGE> 22

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

EXHBIT INDEX

Exhibit
Number Description
------- -----------
<S> <C>
4 Instruments Defining the Rights of
Securities Holders, including Indentures*

10 Material Contracts

11 Computation of Earnings Per Share

13 1995 Annual Report to Shareholders

21 Subsidiaries and Affiliates of the Registrant

23 Consent of Independent Accountants

27 Financial Data Schedule

99-1 Proxy Statement, filed in conjunction with
annual shareholders' meeting scheduled for
April 17, 1996

99-2 Form 11-K Annual Report - 1983 and 1991
Sonoco Products Company Key Employee
Stock Option Plans
</TABLE>

*Incorporated by reference to the Registrant's Form S-3 (filed October 4, 1993,
File No. 33-50503, and June 6, 1991, file No. 33-40538).

<PAGE> 1

EXHIBIT (10)

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

MATERIAL CONTRACTS
- ------------------

Sonoco Products Company 1991 Key Employee Stock Plan

The 1991 Key Employee Stock Plan (As Amended) is included as Exhibit I of the
Company's Proxy Statement dated March 17, 1995 (filed March 16, 1995), and is
hereby incorporated by reference herein.

<PAGE> 1

EXHIBIT (11)

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)

<TABLE>
<CAPTION>
Years Ended December 31
------------------------------------------------------
1995 1994 1993
---- ---- ----
Primary Earnings:
- ------------------
<S> <C> <C> <C>
Net income available to common shareholders $ 156,756 $ 122,086 $ 117,570
=========== =========== ==========

Weighted average number of common
shares outstanding 91,138,507 91,444,613 91,681,461

Assuming exercise of options reduced by
the number of shares that could have been
purchased (at average price) with proceeds
from exercise of such options 1,807,531 873,055 900,197
----------- ----------- ----------

Weighted average number of shares
outstanding as adjusted 92,946,038 92,317,668 92,581,658
=========== =========== ==========

Primary earnings per common share $1.68 $ 1.32 $ 1.27
=========== =========== ==========

Assuming Full Dilution:
- ---------------------------------------------

Net income available to common shareholders $ 156,756 $ 122,086 $ 117,570
=========== =========== ==========

Elimination of preferred dividends 7,763 7,763 7,763

Fully diluted net income $ 164,519 $ 129,849 $ 125,333
=========== =========== ==========

Weighted average number of common
shares outstanding 91,138,507 91,444,613 91,681,461

Assuming exercise of options reduced by the
number of shares that could have been
purchased (at the higher of the end-of-year
price or the yearly average) with proceeds
from exercise of such options 2,092,403 873,056 900,198

Assuming conversion of preferred stock 7,155,300 7,155,300 7,155,300
----------- ----------- ----------

Weighted average number of common
shares outstanding as adjusted 100,386,210 99,472,969 99,736,959
=========== =========== ==========

Earnings per common share assuming
full dilution $ 1.64 $ 1.31 $ 1.26
=========== =========== ==========

</TABLE>

<PAGE> 1
COMPARATIVE HIGHLIGHTS (UNAUDITED)

Sonoco Products Company

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
------------------------- %
(Dollars in thousands, except per share) 1995 1994 INCREASE
<S> <C> <C> <C>
Net sales ................................................ $2,706,173 $2,300,127 17.7%
Gross profit ............................................. 599,186 496,700 20.6%
Net income available to common shareholders .............. 156,756 122,086 28.4%
Return on common equity .................................. 22.2% 19.1% 16.2%
Return on total equity (including
preferred stock) ....................................... 18.7% 16.0% 16.9%
Return on net sales ...................................... 6.1% 5.6% 8.9%
Return on net assets ..................................... 10.4% 8.8% 18.2%
Approximate number of employees .......................... 19,000 17,200 10.5%
Approximate number of locations .......................... 270 250 8.0%

Per common share
- ----------------
Net income available to common shareholders:
- Assuming no dilution ............................... 1.72 1.34 28.4%
- Assuming full dilution ............................. 1.64 1.31 25.2%
Cash dividends - common .................................. .58 .53 9.4%
Ending common stock market price ......................... 26.25 20.83 26.0%
Book value per common share .............................. 8.19 7.23 13.3%
Price/earnings ratio ..................................... 16.01 15.90 .7%
=========================================================================================================
</TABLE>

<TABLE>
SELECTED QUARTERLY FINANCIAL DATA FIRST SECOND THIRD FOURTH
(Dollars in thousands, except per share) QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
1995
Net sales ........................................ $645,142 $691,726 $686,998 $682,307
Gross profit ..................................... 140,339 151,007 149,948 157,892
Net income available to
common shareholders ............................ 35,596 42,172 38,699 40,289
Per common share
- ----------------
Net income available to
common shareholders:
- Assuming no dilution ....................... .39 .46 .43 .44
- Assuming full dilution ..................... .37 .44 .41 .42
Cash dividends - common ........................ .133 .15 .15 .15
Market price - high ............................ 23.21 25.25 28.50 28.75
- low ............................. 19.11 22.74 24.50 23.75
=========================================================================================================
1994
<S> <C> <C> <C> <C>
Net sales ........................................ $537,372 $564,391 $591,178 $607,186
Gross profit ..................................... 113,609 121,994 124,710 136,387
Net income available to
common shareholders ............................ 26,159 30,895 30,568 34,464
Per common share
- ----------------
Net income available to
common shareholders:
- Assuming no dilution ....................... .29 .34 .33 .38
- Assuming full dilution ..................... .28 .33 .33 .37
Cash dividends - common ........................ .129 .133 .133 .133
Market price - high ............................ 24.52 21.67 22.86 22.62
- low ............................. 20.48 18.81 19.52 18.81
=========================================================================================================
</TABLE>
Per share amounts restated to reflect the 5% common stock dividend on June 9,
1995.

SALES
(billions $)

[GRAPH]

SALES CLIMBED TO AN ALL-TIME HIGH OF $2.71 BILLION IN 1995.

NET INCOME
(millions $)

[GRAPH]

1995 WAS A RECORD YEAR FOR SONOCO. NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
INCREASED 28.4% TO $156.8 MILLION.

EARNINGS PER SHARE-
FULLY DILUTED
($)

[GRAPH]

EARNINGS PER SHARE IMPROVED 25.2% OVER 1994.
<PAGE> 2
26

Management's Discussion & Analysis

RESULTS OF OPERATIONS 1995-1994
................................................................................
Consolidated net sales for 1995 were $2.71 billion, a 17.7% increase, compared
with $2.3 billion in 1994.

A major portion of the sales increase in 1995 resulted from selling price
increases. These increases were necessary to recover unprecedented volatility
in raw material costs throughout the world. Volume increased in our
consumer-related businesses, but after a good start, weakened in the second
half of the year in our industrial markets. Several acquisitions increased 1995
sales by $83 million. On a full-year basis, those acquisitions are expected to
add $119 million in sales.
Gross profit margins improved to 22.1% from the 21.6% reported in 1994.
The margin increase reflects a combination of selling price and raw material
cost volatility during 1995. In the early part of the year, costs for primary
raw materials, such as recovered paper, plastic resins, aluminum and steel,
were extremely high, resulting in price increases, where possible. Later in the
year, there were selected price decreases to reflect the falling costs of some
raw materials. On balance, Sonoco was able to improve overall gross margin
percentages slightly. In addition, productivity improvements resulting from
capital expenditures in many operations and technology enhancements were
factors in the gross margin improvement.
Selling, general and administrative costs include company-owned life
insurance (COLI), which is discussed in Note 8 to the Consolidated Financial
Statements. In addition, a major business redesign effort in the Global
Industrial Products and Paper operations, called Process Excellence, resulted
in consulting and other costs totalling $10 million in 1995, or approximately
$.06 per share, assuming full dilution. Excluding the COLI and Process
Excellence costs, selling, general and administrative expenses would have
dropped to 10% of sales in 1995, compared with 10.7% in 1994, reflecting
continued emphasis on cost and headcount levels. The Company expects savings
from Process Excellence to offset any additional costs in 1996 and to result in
gains to income beginning in 1997.

[PHOTO]

Sonoco listed on the New York Stock Exchange in 1995. (l-r) Michael Davis,
stock specialist with Spear, Leeds & Kellogg; Nora Sisk, NYSE representative,
and Trent Hill, Sonoco CFO, discuss the Sonoco listing.

Net income for 1995 was $156.8 million, or $1.64 per share, assuming full
dilution, a 25.2% increase in earnings per share over the $122.1 million, or
$1.31 per share for 1994. The per share numbers reflect full dilution assuming
the conversion of all preferred shares issued to finance the Engraph
acquisition and the assumed exercise of all stock options under the Company's
stock programs. Assuming no dilution, earnings per share for 1995 were $1.72,
compared with $1.34 for 1994, an increase of 28.4%.
Capital expenditures in 1995 increased to $181.4 million, compared with
$126.7 million in 1994. This increased spending included projects to expand
capacity and introduce new technology in many business units. Further details
are included in the Segment Reporting section. The Company expects to increase
capital investment during the next two years to approximately $250 million per
year. These capital spending increases support the Vision 2000 objective of
doubling sales and earnings. A key change in Vision 2000 is a higher proportion
of growth coming from internal opportunities with less reliance on
acquisitions. With the higher internal growth emphasis, capital spending
increases are required to increase capacity and improve cost efficiency to
support that objective. The end result is expected to be higher returns on
invested capital, quicker realization of those returns and lower risk when
compared with acquisition alternatives.
Acquisition spending totaled $107 million in 1995. Acquisitions included a
label producer in New Jersey, a paper mill and three converting operations in
Brazil, a flexible packaging operation, geographic expansion of paper recovery
operations and additional operations in Europe.

[GRAPH]
NET SALES BY SEGMENT
(millions $)
The sales increase in 1995 was
broad based with gains in
all segments.

Research and development costs charged to expense were $12.7 million for
1995.

<PAGE> 3
27

Management's Discussion & Analysis

compared with $12.1 million in 1994. Sonoco is committed to technology
leadership in its businesses and is enhancing its technical expertise in both
consumer packaging and industrial packaging. The new pressure-sensitive label
and flexible packaging businesses are two areas receiving additional research
and development spending.
The Company's effective tax rate in 1995 was 39.4%, compared with 39.1% in
1994. Tax benefits from the COLI program are included in the tax rates for both
years. Proposed legislation would eliminate the tax-favored status of this
program, if enacted.

Segment Reporting

The following segmental data includes the converted products segment, the
paper segment, the international segment and corporate.

The converted products segment consists of the following domestic
businesses, all of which are described in the Operations Review: the Industrial
Products Division; the Consumer Products Division; Sonoco Flexible Packaging;
Sonoco Engraph; Industrial Container Division; High Density Film Products
Division; Crellin Molded and Extrusion Plastics Division; Fibre Partitions
Division; Protective Packaging Division; and the Baker Reels Division.
Converted products is the largest of Sonoco's business segments,
representing approximately 80% of the Company's consolidated sales and profits.
Trade sales in this segment were $1.96 billion in 1995, compared with $1.74
billion in 1994, an increase of 12.7%. This increase is due to volume increases
in the consumer-related businesses and selling price increases resulting from
increased materials costs. Acquisitions in 1995 added $37 million to sales.
The overall operating profit for the converted products segment was $215.6
million in 1995, compared with $188.5 million in 1994, an increase of 14.3%.
This segment was impacted by consulting fees for the Process Excellence
initiative. This initiative, which is explained in the Operations Review, will
result in significant changes in critical processes that will make the Company
even more efficient and responsive to customers.
Sales in the Industrial Products Division's tube and core businesses
increased approximately 18%, with nearly all product lines showing strength,
especially in the first half of the year. In the second half of 1995, volume
declined in comparison to the previous year, but increased selling prices
boosted the sales of these operations. Selling price increases were implemented
to recover the paperboard cost increases. Late in the year there were some
selling price decreases as paperboard costs declined.

[GRAPH]

IDENTIFIABLE ASSETS BY SEGMENT
(millions $)
Identifiable assets increased
in 1995 in all segments of
the Company.

In the Consumer Products Division, volume gains in the snack, refrigerated
dough, powdered beverage, miscellaneous food and caulk markets offset declines
in the shortening and concentrate markets. The sales increase for the year was
the result of volume gains plus price increases implemented due to rising
materials costs. This division implemented several projects that resulted in
significant productivity gains and is continuing its growth by introducing new
products, expanding current markets and converting self-manufacturers to Sonoco
composite cans.
Growth continued in Sonoco Flexible Packaging. Sales increases resulted
from volume increases, as the plant in Morristown, Tenn., continued to improve
its capacity utilization. In addition, the Company acquired the Edinburgh,
Ind., plant from Hargro, Inc. early in 1995, and sales from this operation
boosted the flexible packaging performance. The Company added new rotogravure
presses at both the Morristown and Edinburgh plants that increased capacity and
productivity.
Sales and earnings continued to grow at double digit rates in the Sonoco
Engraph businesses, reflecting the growth potential of this operation. The
label and package insert business continued to grow in several different
markets. In October, Sonoco acquired Cricket Converters of Hightstown, N.J., a
producer of labels for the pharmaceutical and cosmetic markets. Sonoco Engraph
began consolidation of its various label businesses during the fourth quarter.
Benefits of consolidation include lower costs, increased technology focus and
improved customer responsiveness. Screen process printing showed sales and
earnings increases during the year in the beverage and fleet graphics markets.
The paperboard carton business continued to grow as new equipment was added to
provide more product identification options for customers. The glass cover and
coaster business remained strong.
The Industrial Container Division sales were up during the year. Most of
the sales growth reflected an increase in sales prices due to materials costs
increases in paperboard, steel and plastic resins. Volume was down in the fibre
drum operations, but increased in both the plastic drum and intermediate bulk
container operations. There was pressure on margins in this business due to
competitive pressures, including a trend to increase reuse of plastic
containers in several markets.
The High Density Film Products Division had sales gains in all markets
during 1995, with the gains in the grocery segment resulting from the exit of a
major competitor during 1994. The division installed additional

<PAGE> 4
28

Management's Discussion & Analysis

capacity to accommodate this business with much of that capacity coming on
line during 1995. In addition to gains in the grocery market, there were
increases in the convenience store, retail and agricultural film markets. Price
increases were implemented to recover increases in the cost of plastic resins
and ink. The division improved productivity, resulting from installation of new
machinery and full capacity utilization during the year. A second line was
added during the third quarter to produce agricultural film. In 1995, the
division began test markets with several major quick service restaurant chains
to test the use of plastic bags for takeout customers.
The Crellin Molded and Extrusion Plastics Division increased sales
slightly for the year but saw a decrease in profits because of an inability to
recover cost increases for plastic resins. While business did increase in the
automotive and filtration operations, it declined in the textile and wire and
cable markets.
The Fibre Partitions Division had increases in both sales and profits due
to continued progress in converting customers from traditional corrugated
partitions to solid fibre. In addition to the sales increase, there were
several projects to control costs and increase productivity throughout this
division. The Protective Packaging operations also increased both sales and
profits as demand for Sonopost(R) packaging forms remained strong in the major
appliance packaging market. The engineered cushion fibre business also
increased as conversions were made in both the small appliance and computer
peripherals markets.
The Baker Division's reel business saw a decrease in volume resulting from
a slowdown in the cable television and home building markets, but strong
productivity increases and cost control measures helped increase earnings.
Capital spending in this segment rose to $86.5 million from the $77.3
million in 1994. This increase was spread across the segment as new machinery
to add capacity or increase productivity was installed in nearly all the major
converting businesses.

Paper Segment

The paper segment represents all of Sonoco's domestic papermaking and
paper collection facilities. This includes the Company's 21 cylinder board
paper machines and one Fourdrinier machine in the United States. In addition,
this segment includes recovered paper collection sites operated through the
Company's paper mills or by its subsidiary, Paper Stock Dealers, Inc.
The Fourdrinier paper machine, located in Hartsville, S.C., is operated in
partnership with Georgia-Pacific Corporation. The annual capacity of this
machine is 176,000 tons, which is sold by contract to Georgia-Pacific.

[GRAPH]

OPERATING INCOME BY SEGMENT
(millions $)
All segments contributed to the
higher profit performance in 1995.

Operating income by segment has been restated to exclude 1992 Restructuring
Charges.

Sonoco has a capacity of approximately 750,000 tons per year of cylinder
board production in the United States mills. Approximately 80% of the board
produced by Sonoco's paper operations is sold to other Sonoco operations to be
converted into paperboard packaging.
The Company's Recycling and Reclamation operation (which includes the
Paper Stock Dealers subsidiary and the mill collection system) processed
approximately one and one-half million tons of recovered paper during 1995,
with more than half of that used in Sonoco's papermaking operations. In
addition to supplying Sonoco's needs, this group also supplies many large paper
mills in the Southeast. Because of the volatility in recovered paper costs and
supply, Sonoco's recovery system is a key competitive advantage, providing a
security of supply as well as a better control over the cost of this raw
material. The higher prices for recovered paper in the first half of 1995 added
to the overall sales and profits of this segment.
Total domestic paper sales, including both internal and external sales,
were $445.1 million in 1995, compared with $331 million in 1994, an increase of
34.5%. Operating profits for this segment increased 35.6% to $87.5 million in
1995, compared with $64.5 million in 1994.
There were two major factors affecting the performance of this division
during 1995: the volatile cost of recovered paper and the drop in volume during
the second half of the year. Recovered paper costs were at all-time highs
during the first half of 1995, resulting in several paperboard price increases.
At the same time, the higher recovered paper costs increased profits in the
paper collection operations. As prices for recovered paper decreased later in
the year, profits dropped significantly in the paper collection operations. The
domestic paper division operated at 96% capacity for the year. Volume decreases
during the second half of the year resulted in downtime, mostly in the fourth
quarter, reflecting slowing economic conditions.
Capital spending in this segment during 1995 was $37.4 million, compared
with $18.9 million in 1994. This spending included several projects to improve
productivity at mills in Hartsville, S.C.; Sumner, Wash.; Newport, Tenn. and
Holyoke, Mass. The major project to upgrade the capacity, quality and energy
generation in Hartsville was only about one-third completed at the end of 1995.
Three paper collection operations were acquired during the year to expand the
collection base geographically.

International Segment

The international segment includes all of Sonoco's non-U.S. operations.
The largest of

<PAGE> 5
29

Management's Discussion & Analysis

these operations are in Canada, the United Kingdom, France, Mexico, Australia,
Germany and a rapidly growing presence in Asia. These operations are similar to
the United States businesses in products and markets served.
Sales in 1995 in this segment were $566.3 million, compared with $431.2
million in 1994, a 31.3% increase. Operating profits increased to $42 million
from $15.7 million in 1994. Acquisitions in 1995 added approximately $42
million to sales.
The increase in sales and profits resulted from the acquisition of the
remaining 50% interest of the CMB/Sonoco joint venture for producing composite
cans in Europe, higher volume in most geographic areas and increased selling
prices to recover significant materials cost increases in the paper and paper
converting operations.
Business was strong in nearly all of the international operations during
1995, though there was some decline in volume in the industrial products and
paper operations in Europe toward the end of 1995.
Other acquisitions during the year included a small tube and paper
producer in France; a 25% interest in Demolli Industria Cartaria SRL, one of
Italy's leading tube makers; three tube manufacturing operations and a paper
mill in Brazil; and a composite can operation in Mexico. In the fourth quarter,
Sonoco Asia signed a joint venture agreement for a paper mill in Shanghai,
China. Internal expansion included increased composite can making capacity in
Venezuela and the start-up of an engineered cushion fibre operation in New
Zealand.
In early 1996, a joint venture to produce composite cans and other
converted paper products in Indonesia was signed. In addition, a new composite
can plant is scheduled to open in Belgium during the first half of 1996.
Capital spending in the international segment was $45 million, compared
with $27.7 million in 1994. The primary projects involved productivity upgrades
in Venezuela and Mexico in the composite can operations and rebuilding a paper
mill in France to improve productivity and quality.

Corporate

Interest income, interest expense and unallocated corporate expenses are
excluded from the operating profits by segment and are shown under Corporate.
Interest expense in 1995 was $44 million, compared with $35.9 million in
1994. This increase resulted primarily from higher debt levels and from
increasing the fixed rate mix of debt with the issuance of $100 million of
6.75% 15-year debentures in November 1995.
General corporate expense increased in 1995, primarily due to the
increased cost of the company-owned life insurance program (COLI). The tax
benefit from this program is reflected in the effective tax rate.

FINANCIAL POSITION, LIQUIDITY AND
CAPITAL RESOURCES 1995-1994
AND 1994-1993
................................................................................
Sonoco's financial position remains strong. At December 31, 1995, the Company's
long-term debt was rated A+ by Standard & Poor's (S&P) and A2 by Moody's.
Commercial paper was rated A1 and P1 by S&P and Moody's, respectively.

Cash provided by operations was $254.6 million in 1995, compared with
$219.5 million in 1994 and $162.8 million in 1993. The 1995 improvement in cash
flow was largely a result of higher net income. Cash provided by operations was
higher in 1994, compared with 1993, due to lower payables in 1993 and the
prepayment of $15 million in taxes that would have otherwise been payable in
1994. Earnings before interest and taxes were 7.2 times interest expense in
1995, compared with 6.9 times in 1994 and 7.2 times in 1993.
The debt to total capital ratio was 39.6% at December 31, 1995,
compared with 38.1% and 38% at December 31, 1994 and 1993, respectively. The
1995 ratio adjusts debt levels for excess cash at year-end related to the
issuance of restricted-purpose bonds. Debt increased $139.4 million to $686.8
million at December 31, 1995, primarily due to funding acquisitions of $107.2
million, as well as increased capital spending and an increase in cash and cash
equivalents. Debt increased $31.6 million to $547.4 million at December 31,
1994, primarily due to the purchase of $29.5 million of Company stock and to
fund $30.4 million in acquisitions. Capital spending was $181.4 million in
1995, compared with $126.7 million in 1994 and $115.6 million in 1993.
In June 1995, the Company issued $35.1 million of 6.125% Industrial
Revenue Bonds (IRBs) due June 1, 2025. As of December 31, 1995, $30.9 million
of the proceeds from the IRBs were being held in trust until qualifying
expenditures took place, explaining most of the increase in cash and cash
equivalents. In November 1995, the Company issued $100 million of 6.75%
Debentures due November 1, 2010, in order to lengthen the maturities of the
Company's indebtedness. The net proceeds from this issue were used to reduce
outstanding commercial paper obligations. During 1995, the Company increased
its authorized commercial paper program from $250 million to $300 million and
has fully committed bank lines of credit supporting the program by a like
amount.
The Company expects internally generated cash flow along with borrowings
under its existing credit facilities to be sufficient to meet operating and
normal capital expenditure requirements in the future. Capital spending for
1996 is expected to be approximately $250 million.
While Vision 2000 focuses on higher internal growth, small tactical
acquisitions will continue to be a part of the Company's

<PAGE> 6
30

Management's Discussion & Analysis

strategy for growth. The Company expects to acquire additional businesses
with market and technology positions consistent with its overall goals and
strategies.
Net working capital increased to $229.3 million at December 31, 1995, from
$222.1 million in 1994 and $209.9 million in 1993. The current ratio was
1.5 at December 31, 1995, compared with 1.6 and 1.7 at December 31, 1994 and
1993, respectively. Current assets increased in 1995 largely as a result of
business growth and selling price increases implemented during 1995, plus
excess cash, as explained above. Current liabilities increased primarily as a
result of higher notes and taxes payable. Notes payable increased as a result
of using short-term bank lines in place of long-term debt. Taxes payable
increased primarily due to the higher profitability levels and
reclassifications from deferred taxes to taxes payable.
Shareholders' equity increased $86.5 million to $918.7 million at December
31, 1995, as a result of $164.5 million in earnings, reduced by common and
preferred cash dividends of $60.9 million, the repurchase of $18.7 million of
the Company's stock and a translation adjustment of $9.7 million. The
translation adjustment was primarily due to the devaluation of the Mexican
peso. In 1994, shareholders' equity increased $43.9 million to $832.2 million,
primarily from $129.8 million in earnings, offset by common and preferred
dividend payments of $56 million, the repurchase of $29.5 million of the
Company's stock and a translation adjustment of $7.2 million.
In April 1995, the Board of Directors declared a 5% common stock dividend
and increased the dividend payable to common shareholders to $.15 per share
from the $.13 per share that had been paid since the second quarter of 1994.
The Company's policy is to increase dividends as earnings grow. The return on
common equity was 22.2% in 1995, compared with 19.1% in 1994 and 19.9% in 1993.
Assuming the conversion of preferred stock, return on total equity was 18.7% in
1995, compared with 16% in 1994 and 19% in 1993. The book value per common
share was $8.19 in 1995, compared with $7.23 in 1994 and $6.71 in 1993.
The Company is exposed to interest rate fluctuations as a result of using
debt as a major source of financing its operations. When necessary, the Company
will use traditional, unleveraged interest rate swaps to manage its mix of
fixed and variable rate debt to ensure exposure to interest rate movements is
maintained within established ranges. The Company is also subject to risk due
to foreign exchange rate changes as a result of operating globally. The Company
monitors these exposures and can use traditional currency swaps and forward
foreign exchange contracts to hedge a portion of the net investment in foreign
subsidiaries or to hedge firm commitments denominated in foreign currencies.
Use of these financial instruments was not material to the financial statements
as a whole as of December 31, 1995 or 1994.

[GRAPH]

CAPITAL SPENDING BY SEGMENT
(millions $)
In 1995, capital spending increased
in all segments as projects to
expand capacity and introduce
technology were undertaken

In October 1995, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation" (FAS
123). The Company did not elect early adoption of this standard in 1995. The
standard encourages companies to adopt a fair value based method of accounting
for stock compensation plans. However, a company may continue following the
current accounting prescribed by APB Opinion No. 25 and disclose the impact of
fair value accounting on its stock plans. The Company is evaluating the options
allowed under this standard and plans to implement this standard in 1996.
Except for the impact of raw materials prices, as discussed in the segmental
information, inflation did not have a material impact on the Company's
operations in 1995, 1994 or 1993.
The Company is subject to various federal, state and local environmental
laws and regulations concerning, among other matters, wastewater effluent and
air emissions. Compliance costs have not been significant due to the nature of
the materials and processes used in manufacturing operations. Such laws also
make generators of hazardous wastes, and their legal successors, financially
responsible for the clean-up of sites contaminated by those wastes. The Company
has been named a potentially responsible party at several environmentally
contaminated sites primarily located in the Northeast and owned by third
parties. These sites are believed to represent the Company's largest potential
environmental liabilities. The Company has accrued $4.4 million as of December
31, 1995, with respect to these sites. In determining the amounts to accrue
with respect to such sites, the Company has considered: 1) the aggregate
potential clean-up costs in light of the joint and several liability to which
the Company may be subject, 2) the availability of insurance coverage, 3) the
likelihood that insurance coverage may be contested, 4) potential sources of
contribution and/or indemnification, 5) the periods in which claims for
recovery may be realized, 6) the financial condition of third parties from
which recovery is expected, 7) the identification of specific sites for
clean-up, 8) statutory defenses and 9) the status of federal and state
regulatory action. Due to the complexity of determining clean-up costs
associated with the sites, a reliable

<PAGE> 7
31

Management's Discussion & Analysis

estimate of the ultimate cost to the Company cannot be determined; however,
costs will be accrued as necessary once reasonable estimates are determined.
Because it appears unlikely that these matters will be completely resolved in
the near future, and because they involve matters in areas of law and policy
that are constantly changing, any opinion the Company has regarding such
matters must necessarily be qualified to reflect the uncertainty. Nevertheless,
it is management's opinion (based on prior experiences with such matters; rough
estimates of counsel, consultants and others; the apparent ability and
obligation of other parties to share clean-up costs; and the Company's present
and estimated future financial position) that such costs, when finally
determined, will not have a material adverse effect on the consolidated
financial position of the Company.

RESULTS OF OPERATIONS 1994-1993
................................................................................
Consolidated net sales for 1994 were $2.3 billion, compared with $1.95 billion
in 1993, an increase of 18.1%. Several factors impact the sales comparison
between 1994 and 1993. Sales in 1994 included a full year of the Engraph
acquisition, completed in October 1993, as well as reductions from operations
closed in 1993. Sales in 1993 also increased because of the elimination of
Sonoco's historical reporting lag of one month for most international
operations, which resulted in 13 months of sales being reported during 1993.
Excluding the above factors, the sales gain in 1994 was 9.5%.

Net income for 1994 was $122.1 million, or $1.31 per share (assuming full
dilution). This included the expected first-year dilution for the Engraph
acquisition. Net income for 1993 of $117.6 million, or $1.26 per share
(assuming full dilution), included a one-time gain of $.04 per share from the
early repayment of the Graham note (see Note 3 to the Financial Statements).
Excluding the dilution, the one-time gain in 1993 and the elimination of the
international reporting lag, base operating income increased by 12%. Additional
information on sales and profits is included in the segment discussions below.
Capital expenditures increased to $126.7 million in 1994, compared with
$115.6 million in 1993. These expenditures were for projects to expand capacity
and introduce new technology.

Segment Reporting

Sonoco changed the segmental reporting in 1994 by combining the
miscellaneous segment with the converted products segment. The Company
determined the operations in both segments were converting businesses and,
given the small size of the miscellaneous segment, separate reporting was no
longer appropriate. The following segmental data includes the converted
products segment, the paper segment, the international segment and corporate.

Converted Products Segment

Trade sales in this segment were $1.74 billion compared with $1.44 billion
in 1993, an increase of 20.8%. The key factors affecting this sales increase
included additional volume in nearly every business, the full-year sales impact
for Engraph, acquired in October 1993, and higher selling prices.
The overall operating profit for the converted products segment was $188.5
million, compared with $157.4 million in 1993, an increase of 19.7%.
Capital spending rose to $77.3 million in this segment, up from $47
million in 1993. Much of this spending was to implement new manufacturing
processes in the tube and core business, to cover start-up plants in the
protective packaging area and to add equipment and facilities in the Engraph
operations.

Paper Segment

Total domestic paper sales, including both internal and external, for
1994 were $331 million, compared with $278.9 million in 1993, an 18.7%
increase. Operating profits increased 11.5% to $64.5 million in 1994 from $57.9
million in 1993.
Capital spending in this segment during 1994 was $18.9 million,
compared with $20.5 million in 1993.

International Segment

Sales in 1994 were $431.2 million, compared with $404.1 million in 1993.
Due to the elimination of a one-month historical reporting lag, 13 months of
sales were included in 1993 for many international operations. Several
businesses were sold in 1993, impacting the year-to-year comparison. Excluding
the above, the sales gain for 1994 was 16.5%. Operating profits increased 31.9%
to $15.7 million in 1994 from $11.9 million in 1993.
Capital spending in the international segment was $27.7 million, compared
with $41.2 million in 1993. The primary projects focused on process
improvements at plants in Mexico, Canada, Germany and France.

Corporate

Interest expense in 1994 was $35.9 million, compared with $31.2 million in
1993, a result of higher average debt levels, primarily due to acquisitions,
offset partially by the impact of a lower average cost of funds. Although
short-term rates were higher in 1994, the Company benefited from the favorable
impact of the prepayment of the 9.3% privately placed notes in November 1993
and the maturing of various fixed-rate instruments in 1994. Interest income was
lower in 1994 due to the early repayment of the Graham note in November 1993.
The repayment of this note resulted in a $5.8 million gain (net of certain
corporate charges), which was included in general corporate expense in 1993.
General corporate expense increased in 1994 due primarily to the pretax cost of
a broad-based, company-owned life insurance program. The tax benefit from this
program was reflected in the effective tax rate.

<PAGE> 8
32

SELECTED ELEVEN-YEAR FINANCIAL DATA
Sonoco Products Company

<TABLE>
<CAPTION>
(Dollars and shares in thousands except per share data) 1995 1994 1993* 1992*
Operating Results --------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales ......................................................... $ 2,706,173 $ 2,300,127 $ 1,947,224 $ 1,838,026
Cost of sales and operating expenses .............................. 2,396,284 2,055,734 1,734,980 1,641,075
Interest expense .................................................. 44,004 35,861 31,154 30,364
Interest income ................................................... (4,905) (2,398) (6,017) (6,416)
Unusual items* .................................................... (5,800) 42,000
--------------------------------------------------------------
Income from operations before income taxes ........................ 270,790 210,930 192,907 131,003
Taxes on income ................................................... 106,640 82,500 75,200 51,800
Equity in earnings of affiliates .................................. 369 1,419 1,127 2,048
--------------------------------------------------------------
Income before cumulative effect of changes
in accounting principles ........................................ 164,519 129,849 118,834 81,251
Cumulative effect of changes in accounting principles
(FAS 106 and FAS 109) ........................................... (37,892)
--------------------------------------------------------------
Net income ........................................................ 164,519 129,849 118,834 43,359
Preferred dividends ............................................... (7,763) (7,763) (1,264)
--------------------------------------------------------------
Net income available to common shareholders ....................... 156,756 122,086 117,570 43,359
Returns before cumulative effect of changes
in accounting principles
Return on common equity ....................................... 22.2% 19.1% 19.9% 13.7%
Return on total equity (including preferred stock) ............ 18.7% 16.0% 19.0% 13.7%
Return on net sales ........................................... 6.1% 5.6% 6.1% 4.4%
Per common share
Income before cumulative effect of changes in
accounting principles ......................................... 1.72 1.34 1.28 .89
Cumulative effect of changes in accounting principles ........... (.41)
--------------------------------------------------------------
Net income available to common shareholders:
Assuming no dilution .......................................... 1.72 1.34 1.28 .48
Assuming full dilution ........................................ 1.64 1.31 1.26 .47
Cash dividends declared - common ................................ .58 .53 .51 .47
Average common shares outstanding:
Assuming no dilution .......................................... 91,139 91,445 91,681 91,069
Assuming full dilution ........................................ 100,386 99,473 99,737 92,214
Actual common shares outstanding at December 31 ................... 91,117 91,254 91,819 91,501
==============================================================
Financial Position
Net working capital ............................................... 229,328 222,068 209,932 152,478
Property, plant and equipment ..................................... 865,629 763,109 737,154 614,018
Total assets ...................................................... 2,115,413 1,835,053 1,707,125 1,246,531
Long-term debt .................................................... 591,894 487,959 455,262 240,982
Shareholders' equity .............................................. 918,749 832,218 788,364 561,890
Current ratio ..................................................... 1.5 1.6 1.7 1.5
Total debt to total capital ....................................... 39.6%** 38.1% 38.0% 35.1%
Book value per common share ....................................... 8.19 7.23 6.71 6.14
==============================================================
Other Data
Depreciation, depletion and amortization expense .................. 125,836 112,797 95,745 83,309
Cash dividends declared - common .................................. 53,145 48,287 46,333 42,443
Market price per common share (ending) ............................ 26.25 20.83 20.95 22.74
==============================================================
</TABLE>

*Included in 1993 and 1991 were gains on the sale of Sonoco Graham (see Note
3 to the Consolidated Financial Statements). Also includes restructuring
charges of $42,000 pretax, or $25,000 after-tax, in 1992 and $75,000 pretax,
or $54,650 after-tax, in 1990. In 1987, includes acquisition consolidation
charges of $10 million pretax, or $5,600 after-tax.

**Debt levels adjusted for excess cash at year-end related to the issuance of
restricted-purpose bonds.

Prior years' data adjusted for stock splits and stock dividends.

<PAGE> 9
33

<TABLE>
<CAPTION>
1991* 1990* 1989 1988 1987* 1986 1985
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,697,058 $ 1,669,142 $ 1,655,830 $ 1,599,751 $ 1,312,052 $ 963,796 $ 869,598
1,528,543 1,481,271 1,470,877 1,413,912 1,174,777 858,680 773,910
28,186 28,073 29,440 25,175 18,593 8,552 8,686
(6,870) (2,196) (2,573) (1,517) (1,045) (602) (1,782)
(8,525) 75,000 10,000
- -----------------------------------------------------------------------------------------------------------
155,724 86,994 158,086 162,181 109,727 97,166 88,784
63,600 43,934 60,906 67,029 48,714 44,435 41,871
2,681 7,308 6,381 1,125 469 1,945 2,496
- -----------------------------------------------------------------------------------------------------------
94,805 50,368 103,561 96,277 61,482 54,676 49,409

- -----------------------------------------------------------------------------------------------------------
94,805 50,368 103,561 96,277 61,482 54,676 49,409
- -----------------------------------------------------------------------------------------------------------
94,805 50,368 103,561 96,277 61,482 54,676 49,409

17.8% 9.6% 21.3% 23.0% 17.0% 17.4% 17.7%
17.8% 9.6% 21.3% 23.0% 17.0% 17.4% 17.7%
5.6% 3.0% 6.3% 6.0% 4.7% 5.7% 5.7%

1.05 .55 1.12 1.05 .67 .59 .54
- -----------------------------------------------------------------------------------------------------------

1.05 .55 1.12 1.05 .67 .59 .54
1.04 .55 1.11 1.04 .66 .59 .54
.44 .43 .39 .30 .24 .20 .17

90,620 91,464 92,184 92,014 92,117 91,993 91,822
91,114 91,963 93,060 92,884 92,645 92,479 92,091
90,815 90,405 91,826 92,108 91,908 92,017 91,960
===========================================================================================================
163,860 184,066 193,035 188,085 143,972 104,614 105,070
580,787 562,591 494,290 533,427 482,357 267,353 245,990
1,135,940 1,113,594 995,132 977,459 877,625 559,459 500,833
227,528 279,135 226,240 275,535 263,489 58,440 73,383
562,306 512,828 511,574 454,486 379,912 332,890 295,743
1.6 1.7 2.1 2.0 1.8 1.9 2.1
30.6% 34.7% 30.4% 36.8% 38.6% 17.7% 19.9%
6.19 5.67 5.57 4.93 4.13 3.62 3.22
===========================================================================================================
76,561 72,152 67,263 69,055 57,086 35,654 31,182
39,703 39,216 35,583 28,046 21,942 17,963 15,746
16.43 15.48 17.62 16.31 10.12 9.05 7.32
===========================================================================================================
</TABLE>

<PAGE> 10
34

CONSOLIDATED BALANCE SHEETS
Sonoco Products Company

<TABLE>
<CAPTION>
December 31
--------------------------
(Dollars and shares in thousands) 1995 1994
ASSETS --------------------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents ................................................ $ 61,624 $ 28,444
Trade accounts receivable, net of allowances ............................. 314,207 270,439
Other receivables ........................................................ 17,074 20,211
Inventories
Finished and in process................................................. 103,073 86,238
Materials and supplies ................................................. 128,403 121,424
Prepaid expenses ......................................................... 21,277 29,943
Deferred income taxes .................................................... 16,125 14,012
--------------------------
661,783 570,711
PROPERTY, PLANT AND EQUIPMENT, NET ........................................ 865,629 763,109
COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED, NET ..................... 411,343 358,965
OTHER ASSETS .............................................................. 176,658 142,268
--------------------------
$ 2,115,413 $ 1,835,053
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Payable to suppliers ..................................................... $ 149,512 $ 158,098
Accrued expenses and other ............................................... 105,750 83,268
Accrued wages and other compensation ..................................... 30,885 30,855
Notes payable and current portion of long-term debt ...................... 94,898 59,421
Taxes on income .......................................................... 51,410 17,001
--------------------------
432,455 348,643
LONG-TERM DEBT ............................................................ 591,894 487,959
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS ............................... 103,898 104,179
DEFERRED INCOME TAXES AND OTHER ........................................... 68,417 62,054
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Serial preferred stock, no par value
Authorized 30,000 shares
Issued 3,450 shares .................................................... 172,500 172,500
Common shares, no par value
Authorized 150,000 shares
Issued 96,433 shares ................................................... 7,175 7,175
Capital in excess of stated value ........................................ 170,458 60,908
Translation of foreign currencies ........................................ (55,925) (46,252)
Retained earnings ........................................................ 694,681 697,299
Treasury shares at cost (1995--5,316 SHARES; 1994--5,179 shares) ......... (70,140) (59,412)
--------------------------
918,749 832,218
--------------------------
$ 2,115,413 $ 1,835,053
==========================
</TABLE>

Shares restated to reflect the 5% stock dividend on June 9, 1995.

The Notes beginning on page 38 are an integral part of these financial
statements.
<PAGE> 11
CONSOLIDATED STATEMENTS OF INCOME 35
Sonoco Products Company

<TABLE>
<CAPTION>
Years ended December 31
-----------------------------------------
(Dollars and shares in thousands except per share data) 1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>
Net sales ............................................................... $ 2,706,173 $ 2,300,127 $ 1,947,224
Cost of sales ........................................................... 2,106,987 1,803,427 1,525,671
Selling, general and administrative expenses ............................ 289,297 252,307 209,309
Interest expense ........................................................ 44,004 35,861 31,154
Interest income ......................................................... (4,905) (2,398) (6,017)
Unusual items ........................................................... (5,800)
-----------------------------------------

Income before income taxes .............................................. 270,790 210,930 192,907
Taxes on income ......................................................... 106,640 82,500 75,200
-----------------------------------------
Income before equity in earnings of affiliates .......................... 164,150 128,430 117,707
Equity in earnings of affiliates ........................................ 369 1,419 1,127
-----------------------------------------

Net income .............................................................. 164,519 129,849 118,834
Preferred dividends ..................................................... (7,763) (7,763) (1,264)
-----------------------------------------
Net income available to common shareholders ............................. $ 156,756 $ 122,086 $ 117,570
=========================================
Per common share
Net income available to common shareholders:
Assuming no dilution .................................................. $ 1.72 $ 1.34 $ 1.28
Assuming full dilution ................................................ $ 1.64 $ 1.31 $ 1.26
Cash dividends - common ................................................. $ .58 $ .53 $ .51

Average common shares outstanding:
Assuming no dilution .................................................... 91,139 91,445 91,681
Assuming full dilution .................................................. 100,386 99,473 99,737
</TABLE>

Shares outstanding and per share data have been restated to reflect the 5%
stock dividend on June 9, 1995.

The Notes beginning on page 38 are an integral part of these financial
statements.

(GRAPH)

NET SALES
(billions $)
Net sales increased 17.7% in 1995
due to price increases, acquisitions and
volume gains in many operations.

(GRAPH)

NET INCOME
(millions $)
Net income has grown at a compound
annual growth rate of 13.4% since 1991.

Adjusted to exclude restructuring charges and
cumulative effect of accounting changes in 1992.

(GRAPH)

EARNINGS PER SHARE - FULLY DILUTED
($)
Earnings per share improved 25.2%
over 1994.

Adjusted to exclude restructuring charges and
cumulative effect of accounting changes in 1992.
Prior years earnings per share restated to reflect
the 5% stock dividend in June 1995.
<PAGE> 12
36

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Sonoco Products Company

Common Shares Preferred Capital in Translation Treasury
(Dollars and shares in thousands --------------------- Stock Excess of of Foreign Retained Shares
except per share data) Outstanding Amount Amount Stated Value Currencies Earnings Amount
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1993..................... 91,501 $7,175 $ $ 61,608 $(19,952) $552,263 $(39,204)
Net income.......................... 118,834
Cash dividends:

Preferred......................... (1,264)
Common, $.51 per share............ (46,333)
Translation loss.................... (19,064)
Issuance of 3,450
preferred shares.................. 172,500 (3,968)
Issuance of treasury shares under
Stock option plan................. 219 1,388 1,493
Employee stock
ownership plan.................. 247 3,249 2,001
Treasury shares acquired............ (148) (2,362)
-------------------------------------------------------------------------------------
December 31, 1993................... 91,819 7,175 172,500 62,277 (39,016) 623,500 (38,072)
Net income.......................... 129,849
Cash dividends:
Preferred......................... (7,763)
Common, $.53 per share............ (48,287)
Translation loss.................... (7,236)
Issuance of treasury shares under
Stock option plan................. 344 (442) 3,748
Employee stock
ownership plan.................. 156 1,779 1,581
Treasury shares acquired............ (1,335) (29,462)
Other............................... 270 (2,706) 2,793
-------------------------------------------------------------------------------------
December 31, 1994................... 91,254 7,175 172,500 60,908 (46,252) 697,299 (59,412)
Net income.......................... 164,519
Cash dividends:
Preferred......................... (7,763)
Common, $.58 per share............ (53,145)
5% common stock dividend............ 106,213 (106,229)
Translation loss.................... (9,673)
Issuance of treasury shares under
Stock option plan................. 561 5,584 6,286
Treasury shares acquired............ (824) (18,657)
Other............................... 126 (2,247) 1,643
-------------------------------------------------------------------------------------
December 31, 1995................... 91,117 $7,175 $172,500 $170,458 $(55,925) $694,681 $(70,140)
=====================================================================================

</TABLE>

Shares outstanding and per share data have been restated to reflect the 5%
common stock dividend on June 9, 1995.

The Notes beginning on page 38 are an integral part of these financial
statements.

<PAGE> 13
CONSOLIDATED STATEMENTS OF CASH FLOWS 37
Sonoco Products Company

<TABLE>
<CAPTION>
Years ended December 31
-----------------------------------
(Dollars and shares in thousands) 1995 1994 1993
-----------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income ................................................... $ 164,519 $ 129,849 $ 118,834
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation, depletion and amortization .................. 125,836 112,797 95,745
Loss on disposition of assets ............................. 157 2,901 836
Deferred taxes ............................................ (5,347) 5,668 22,361
Gain on sale of investment in affiliate ................... (15,299)
Changes in assets and liabilities, net of
effects from acquisitions, dispositions
and foreign currency adjustments
Accounts receivable ................................... (31,778) (33,127) 860
Inventories ........................................... (12,931) (17,637) 5,545
Prepaid expenses ...................................... 8,319 1,563 (1,411)
Payables and taxes .................................... 27,313 29,536 (45,881)
Other assets and liabilities .......................... (21,538) (12,035) (18,746)
-----------------------------------
Net cash provided by operating activities .................... 254,550 219,515 162,844
Cash Flows from Investing Activities
Purchase of property, plant and equipment .................... (181,432) (126,746) (115,596)
Cost of acquisitions, exclusive of cash ...................... (107,156) (30,370) (392,950)
Proceeds from the sale of assets ............................. 4,557 5,533 42,467
Proceeds from collection of a note receivable ................ 33,672
-----------------------------------
Net cash used by investing activities ........................ (284,031) (151,583) (432,407)
Cash Flows from Financing Activities
Proceeds from issuance of debt ............................... 305,851 96,838 662,800
Principal repayment of debt .................................. (169,807) (81,053) (523,817)
Cash dividends - common and preferred ........................ (60,908) (56,004) (46,333)
Treasury shares acquired ..................................... (18,657) (29,462) (2,362)
Treasury shares issued ....................................... 8,370 3,334 2,428
Preferred shares issued ...................................... 172,500
-----------------------------------
Net cash provided (used) by financing activities ............. 64,849 (66,347) 265,216
Effects of Exchange Rate Changes on Cash ..................... (2,188) 1,001 (7,863)
-----------------------------------
Increase (Decrease) in Cash and Cash Equivalents ............. 33,180 2,586 (12,210)
Cash and cash equivalents at beginning of year ............... 28,444 25,858 38,068
-----------------------------------
Cash and cash equivalents at end of year ..................... $ 61,624 $ 28,444 $ 25,858
===================================
Supplemental Cash Flow Disclosures
Interest paid .............................................. $ 41,851 $ 37,123 $ 31,504
Income taxes paid .......................................... $ 75,635 $ 61,254 $ 75,374
</TABLE>

Excluded from the Consolidated Statements of Cash Flows is the effect of
certain non-cash activities. On June 9, 1995, the Company issued a 5% common
stock dividend ($106,213 fair value). The Company assumed approximately $75,000
of debt obligations in 1993 in conjunction with acquisitions.

The Notes beginning on page 38 are an integral part of these financial
statements.
<PAGE> 14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

The following notes are an integral part of the consolidated financial
statements. The accounting principles followed by the Company appear in bold
type.

1. BASIS OF PRESENTATION
................................................................................
THE CONSOLIDATED FINANCIAL STATEMENTS INCLUDE THE ACCOUNTS OF SONOCO
PRODUCTS COMPANY AND ITS SUBSIDIARIES AFTER ELIMINATION OF INTERCOMPANY
ACCOUNTS AND TRANSACTIONS. INVESTMENTS IN AFFILIATED COMPANIES IN WHICH THE
COMPANY OWNS 20% TO 50% OF THE VOTING STOCK ARE INCLUDED ON THE EQUITY METHOD
OF ACCOUNTING.
THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO MAKE ESTIMATES AND
ASSUMPTIONS THAT AFFECT THE REPORTED AMOUNT OF ASSETS AND LIABILITIES AT THE
DATE OF THE FINANCIAL STATEMENTS AND THE REPORTED AMOUNTS OF REVENUES AND
EXPENSES DURING THE REPORTING PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE
ESTIMATES.

2. ACQUISITIONS
...............................................................................
Sonoco completed several acquisitions during 1995 which were strategically
important to both U.S. and international operations. The aggregate cost of
these acquisitions was approximately $107,000 in cash. In January 1995, the
Company acquired the remaining 50% interest in the CMB/Sonoco joint venture.
CMB/Sonoco is a producer of composite cans with manufacturing facilities in
Manchester, U.K. and Lieven, France. In March 1995, the Company completed the
purchase of a flexible packaging plant in Edinburgh, Ind., formerly owned by
Hargro Flexible Packaging Corporation. The Edinburgh plant manufactures
packaging for the confection, snack food and pharmaceutical markets. During the
fourth quarter, the Company completed the acquisition of Cricket Converters,
Inc. of Hightstown, N.J. Cricket supplies labels to the pharmaceutical and
health care markets. The Company also purchased three converting operations and
a paper mill in Brazil, a small tube and paper manufacturer in France and three
additional recovered paper collection plants in the U.S.
During 1994, the Company completed several acquisitions with an aggregate
cost of approximately $30,000 and the assumption of $6,000 in debt.
The Company has accounted for each of these acquisitions as a purchase
and, accordingly, has included their results of operations in consolidated net
income from the date of acquisition.

3. UNUSUAL ITEMS
................................................................................
Unusual items in 1993 include a gain from the early repayment of a note
issued in connection with the sale of Sonoco Graham in 1991. This gain was
partially offset by charges for refinancing debt related to the Engraph
acquisition and various other unusual items in 1993.

4. CASH AND CASH EQUIVALENTS
................................................................................
CASH EQUIVALENTS ARE COMPOSED OF HIGHLY LIQUID INVESTMENTS WITH AN
ORIGINAL MATURITY OF THREE MONTHS OR LESS AND ARE RECORDED AT MARKET.
At December 31, 1995 and 1994, outstanding checks of $19,808 and $28,182,
respectively, were included in Payable to suppliers.
At December 31, 1995, $30,892 of cash and cash equivalents represented
proceeds from the issuance of the 6.125% Industrial Revenue Bonds (IRBs) and
was restricted to funding qualified expenditures as provided for by the IRBs.

5. INVENTORIES
................................................................................
INVENTORIES ARE STATED AT THE LOWER OF COST OR MARKET. The last-in,
first-out (LIFO) method was used to determine costs of approximately 38% of
total inventories in 1995 and 43% in 1994. The remaining inventories are
determined on the first-in, first-out (FIFO) method.
If the FIFO method of accounting had been used for all inventories, the
totals would have been higher by $12,084 in 1995 and $9,961 in 1994.

6. PROPERTY, PLANT AND EQUIPMENT
................................................................................
PLANT ASSETS REPRESENT THE ORIGINAL COST OF LAND, BUILDINGS AND
EQUIPMENT LESS DEPRECIATION COMPUTED UNDER THE STRAIGHT-LINE METHOD OVER THE
ESTIMATED USEFUL LIFE OF THE ASSET. Equipment lives range from 5 to 11 years,
buildings from 20 to 30 years.
TIMBER RESOURCES ARE STATED AT COST. DEPLETION IS CHARGED TO OPERATIONS
BASED ON THE NUMBER OF UNITS OF TIMBER CUT DURING THE YEAR.
Depreciation and depletion expense amounted to $110,706 in 1995, $99,767
in 1994 and $87,721 in 1993.

<PAGE> 15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

Details of property, plant and equipment at December 31 are as follows:

<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
Land ........................... $ 35,733 $ 28,179
Timber resources ............... 32,529 31,699
Buildings ...................... 302,383 279,634
Machinery & equipment .......... 1,131,503 1,009,024
Construction in progress ....... 107,099 62,988
--------------------------
1,609,247 1,411,524
Accumulated depreciation
and depletion ................. (743,618) (648,415)
--------------------------
$ 865,629 $ 763,109
==========================
</TABLE>

Estimated costs for completion of authorized capital additions under
construction totaled approximately $118,000 at December 31, 1995.
Certain operating properties and equipment are leased under
non-cancellable operating leases. Total rental expense under operating leases
was $31,000, $28,000 and $26,400 in 1995, 1994 and 1993, respectively. Future
minimum rentals under non-cancellable operating leases with terms of more than
one year are as follows: 1996 - $17,100; 1997 - $14,800; 1998 - $11,900; 1999 -
$8,800; 2000 - $6,200; 2001 and thereafter - $11,800.

7. COST IN EXCESS OF FAIR VALUE OF ASSETS PURCHASED
...............................................................................
GOODWILL ARISING FROM BUSINESS ACQUISITIONS ($64,000 in 1995 and $27,000
in 1994) IS AMORTIZED ON THE STRAIGHT-LINE BASIS OVER PERIODS RANGING FROM 20
TO 40 YEARS. THE COMPANY EVALUATES, AT EACH BALANCE SHEET DATE, THE
REALIZABILITY OF GOODWILL FOR EACH SUBSIDIARY HAVING A GOODWILL BALANCE.
Amortization expense amounted to $15,130 in 1995; $13,030 in 1994; and $8,024
in 1993. Accumulated amortization at December 31, 1995 and 1994 was $45,346 and
$34,336, respectively.

8. INVESTMENT IN LIFE INSURANCE
................................................................................
Company-owned life insurance (COLI) policies are recorded net of policy
loans in Other Assets. The net pretax cost of company-owned life insurance,
including interest expense, was $9,171 in 1995 and $5,532 in 1994 and is
included in Selling, general and administrative expenses. The related interest
expense was $34,634 in 1995 and $18,630 in 1994. Tax benefits from the COLI
program amounted to $10,024 and $5,091 in 1995 and 1994, respectively. Proposed
legislation will eliminate the tax-favored status of this program, if enacted.

9. DEBT
................................................................................
Debt at December 31 was as follows:

<TABLE>
<CAPTION>
1995 1994
-------------------
<S> <C> <C>
Commercial paper, average rate
of 5.9% in 1995 and 4.2% in 1994......... $134,500 $173,700
9.2% notes due August 2021 ................ 99,926 99,917
6.75% debentures due November 2010 ....... 99,790
5.875% notes due November 2003 ............ 99,471 99,405
5.49% notes due April 2000 ................ 75,000 75,000
6.125% IRBs due June 2025 ................. 34,439
Foreign denominated debt, average
rate of 6.6% at December 31, 1995
and 6.8% at December 31, 1994 ........... 108,970 70,304
Other notes ............................... 34,696 29,054
-------------------
Total debt ................................ 686,792 547,380
Less current portion and
short-term notes ....................... 94,898 59,421
-------------------
Long-term debt ............................ $591,894 $487,959
===================
</TABLE>

The Company has authorized a commercial paper program totaling $300
million and has fully committed bank lines of credit supporting the program by
a like amount. These bank lines expire in the year 2000. Accordingly,
commercial paper borrowings are classified as long-term debt.
The approximate principal requirements of debt maturing in the next
five years are: 1996 - $95,000; 1997 - $5,200; 1998 - $4,800; 1999 - $4,800;
and 2000 - $5,800. It is management's intent to extend indefinitely the line of
credit agreements supporting the commercial paper program. Accordingly, no
principal repayments are projected through the year 2000.
Certain of the Company's debt agreements impose restrictions with respect
to the maintenance of financial ratios and the disposition of assets. The most
restrictive covenant currently requires that tangible net worth at the end of
each fiscal quarter be greater than $365,000. In addition to the committed
availability under the commercial paper program, unused short-term lines of
credit for general Company purposes at December 31, 1995, were approximately
$94,500 with interest at mutually agreed upon rates.

10. FINANCIAL INSTRUMENTS
................................................................................
The Company enters into currency swaps and foreign exchange forward
contracts to hedge a portion of the net investment in certain foreign
subsidiaries. Gains and losses on such contracts are recognized in the
cumulative translation adjustments account in Shareholders' Equity. As of
December 31, 1995 and 1994, the notional value of such contracts was
approximately $38,000 and $32,000, respectively. All financial instruments are
executed with credit worthy financial institutions; therefore, the Company
considers the risk of non-performance on these instruments to be remote.

<PAGE> 16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

NOTE 10: FINANCIAL INSTRUMENTS - CONTINUED

The following table sets forth the carrying amounts and fair values of the
Company's significant financial instruments where the carrying amount differs
from the fair value. The carrying amount of cash and cash equivalents,
short-term debt and long-term variable rate debt approximates fair value. The
fair value of long-term debt is based on quoted market prices or by discounting
future cash flows using interest rates available to the Company for issues with
similar terms and average maturities. Foreign currency agreements are valued
based on termination values or quoted market prices of comparable instruments.

<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
of Asset/ of Asset/ of Asset/ of Asset/
(Liability) (Liability) (Liability) (Liability)
------------------------------------------------
<S> <C> <C> <C> <C>
Long-term debt ..... $(591,894) $(622,695) $(487,959) $(468,126)
Foreign currency
agreements...... (2,690) (2,690) 1,309 1,309
</TABLE>

11. STOCK PLANS
................................................................................
The Company has stock option plans under which common shares are reserved
for sale to certain employees. Options granted under the plans were at the
market value of the shares at the date of grant. Options are generally
exercisable one year after the date of grant, and expire 10 years after the
date of grant. At December 31, 1995, 1,726,684 shares were reserved for future
grants.
On February 7, 1996, the Board recommended, pending shareholder approval,
the adoption of the 1996 Non-Employee Director's Stock Plan. This plan provides
for the granting of options to non-employee directors beginning with 2,000 per
participant granted in 1996. In 1994, the Company granted one-time awards of
contingent shares to 13 of the Company's executives. Three hundred thirty-six
thousand shares were granted under this plan from shares allocated in the 1991
Key Employee Stock Plan.
Information with respect to the Company's stock option plans follows:

<TABLE>
<CAPTION>
Option Option
Shares Price Range
--------------------------
1993
<S> <C> <C>
Outstanding at beginning
of year....................... 3,416,263 $ 4.78-$17.86
Granted .................... 1,005,165 $19.76-$22.98
Assumed - Engraph .......... 654,314 $ 3.55-$17.52
Exercised .................. (218,688) $ 4.78-$17.86
Cancelled .................. (6,195) $ 22.98
---------
Outstanding at end of year ..... 4,850,859 $ 3.55-$22.98

1994

Granted ................... 1,274,920 $ 0.00-$23.93
Exercised ................. (343,734) $ 3.55-$17.86
Cancelled ................. (36,588) $ 4.78-$23.93
---------
Outstanding at end of year .... 5,745,457 $ 0.00-$23.93

1995

Granted ................... 1,083,060 $19.88-$23.57
Exercised ................. (560,664) $ 5.09-$23.93
Cancelled ................. (32,921) $ 5.09-$23.93
---------
Outstanding at end of year .... 6,234,932 $ 0.00-$23.93
=========
Options exercisable at
December 31, 1995......... 4,814,822
</TABLE>

All option shares and option prices have been restated to reflect the 5%
stock dividend on June 9, 1995.

12. RETIREMENT BENEFIT PLANS
................................................................................
Non-contributory defined benefit pension plans cover substantially all
U.S. employees. Under the plans, retirement benefits are based either on both
years of service and compensation or on service only. IT IS THE COMPANY'S
POLICY TO FUND THESE PLANS, AT A MINIMUM, IN AMOUNTS REQUIRED UNDER ERISA. Plan
assets consist primarily of common stocks, bonds and real estate.
The Company also maintains a plan to supplement executive benefits
limited through qualified plans. Benefits are based on years of service and
compensation. The plan is partially funded through a grantor trust as defined
under Section 671 of the Internal Revenue Service Code of 1986. The Company
sponsors contributory pension plans covering approximately 75% of the employees
in the United Kingdom and substantially all of the Canadian employees. Pension
benefits are based either on the employee's salary in the year of retirement or
the average of the final three years. THE FUNDING POLICY IS TO CONTRIBUTE
ANNUALLY AT ACTUARIALLY DETERMINED RATES. IT IS THE COMPANY'S INTENT TO
MAINTAIN A WELL-FUNDED PLAN.

Net pension cost for the domestic, United Kingdom and Canadian plans
includes the following components:

<TABLE>
<CAPTION>
Combined Plans
--------------------------------
1995 1994 1993
--------------------------------
<S> <C> <C>
Service cost-benefits earned
during year ................. $ 12,532 $ 13,716 $ 9,555
Interest cost on projected
benefit obligation .......... 32,537 27,160 23,881
Actual return on plan
assets ...................... (81,926) (1,205) (32,165)
Net amortization and
deferral .................... 45,007 (33,209) 2,031
--------------------------------
$ 8,150 $ 6,462 $ 3,302
================================
</TABLE>

<PAGE> 17
41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

The following table sets forth the funded status of the plans at December 31:

<TABLE>
<CAPTION>
Over-Funded Under-Funded
Plan Plan
------------------------------------------------
1995 1994 1995 1994
------------------------------------------------
<S> <C> <C> <C> <C>
Projected benefit obligation
Vested benefits ............. $ 366,805 $ 273,601 $ $
Non-vested benefits ......... 10,241 8,043 19,332 14,521
------------------------------------------------
Accumulated benefit
obligation .................. 377,046 281,644 19,332 14,521
Effect of assumed increase
in compensation levels ...... 47,203 45,523 1,345 2,442
------------------------------------------------
Projected benefit
obligation .................. 424,249 327,167 20,677 16,963
Plan assets at fair value ..... 461,270 365,802 14,234 12,965
------------------------------------------------
Plan assets in excess of
(less than) projected
benefit obligation .......... 37,021 38,635 (6,443) (3,998)
Unrecognized net loss ......... 43,583 20,376 5,094 1,997
Unrecognized prior service
cost ........................ 3,039 2,192 1,735 1,803
Unrecognized net transition
(asset) obligation .......... (9,207) (2,671) 1,142 1,370
Adjustment required to
recognize minimum liability . (6,625) (2,728)
------------------------------------------------
Prepaid (accrued) pension
cost ....................... $ 74,436 $ 58,532 $ (5,097) $ (1,556)
================================================
</TABLE>

Prepaid pension costs of $5,737 and $8,188 were included in Prepaid
expenses in 1995 and 1994, respectively. In addition $68,699 and $50,344 were
included in Other Assets in 1995 and 1994, respectively.
The weighted-average discount rate used in determining the projected
benefit obligations was 7.25% in 1995, 8.5% in 1994, and 7% in 1993. The
assumed compensation increase was 4% in 1995 and 1993, and 5% in 1994. The
expected long-term rate of return on assets was 9.5% for all years presented.
The Company's Employee Savings and Stock Ownership Plan provides that all
eligible employees may contribute 1% to 16% of their gross pay to the Plan
subject to Internal Revenue Service regulations. The Company may make matching
contributions in an amount to be determined annually by the Company's Board of
Directors. The Company's contributions to the plan for 1995, 1994, and 1993,
were $5,570, $5,380 and $5,250, respectively.

13. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
................................................................................
The Company provides health care and life benefits to the majority of its
United States retirees and their eligible dependents. The Company's
subsidiaries in Canada also provide postretirement benefits to eligible
retirees. In accordance with the provisions of Statement of Financial
Accounting Standards 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" (FAS 106), the Company accrues for postretirement benefits
other than pensions over an employee's career. THE COMPANY FUNDS BENEFIT COSTS
PRINCIPALLY ON A PAY-AS-YOU-GO BASIS, WITH THE RETIREE PAYING A PORTION OF THE
COSTS. In situations where full-time employees retire from the Company between
age 55 and age 65, most are eligible to receive, at a cost to the retiree equal
to the cost for an active employee, certain health care benefits identical to
those available to active employees. After attaining age 65, an eligible
retiree's health care benefit coverage becomes coordinated with Medicare. For
purposes of projecting future benefit payments, early retiree contributions
were assumed to increase at the health care cost trend.
Non-pension retirement benefit expense includes the following:

<TABLE>
<CAPTION>
1995 1994 1993
-----------------------------
<S> <C> <C> <C>
Service cost-benefits
earned during year ........... $ 3,749 $ 5,180 $ 2,482
Interest cost on APBO ............ 8,673 7,110 8,196
Actual return on plan assets ..... (5,441) 459 (874)
Net amortization and deferral .... (312) (5,400) (189)
-----------------------------
Net periodic postretirement
benefit cost ................. $ 6,669 $ 7,349 $ 9,615
=============================
</TABLE>

The following sets forth the accrued obligation included in the
accompanying December 31 Consolidated Balance Sheets applicable to each
employee group for non-pension retirement benefits:

<TABLE>
<CAPTION>
1995 1994
----------------------
<S> <C> <C>
Accumulated postretirement
benefit obligation (APBO):
Retired employees ................ $ 69,627 $ 50,008
Active employees-fully eligible .. 21,489 17,671
Active employees-not yet eligible 26,128 27,329
----------------------
Accumulated benefit obligation ....... 117,244 95,008
Plan assets at fair value ............ 25,816 17,375
----------------------
Plan assets less than accumulated
benefit obligation ................ (91,428) (77,633)
Unrecognized net loss from
changes in assumptions ............ 22,766 9,552
Unrecognized prior service cost....... (17,980) (22,459)
----------------------
Accrued postretirement
benefit cost ...................... $ (86,642) $ (90,540)
======================
</TABLE>

Prepaid postretirement medical costs of $17,256 and $13,639 were included
in Other Assets in 1995 and 1994, respectively. The discount rate used in
determining the APBO was 7.25% in 1995, 8.5% in 1994 and 7% in 1993. The
assumed health care cost trend rate used in measuring the APBO was 10% in 1995
declining to 5% in the year 2005. Increasing the assumed trend rate for health
care costs by one percentage point would result in an increase in the APBO of
approximately $5,100 at December 31, 1995, and an

<PAGE> 18
42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

increase of $640 in the related 1995 expense. Plan assets are the result
of funding these benefit costs in amounts representing the maximum allowable
under Section 401(h) of the Internal Revenue Code. These assets are combined
with the pension plan assets and consist primarily of common stocks, bonds and
real estate. The expected long-term rate of return on assets was 9.5% for all
years presented.

14. INCOME TAXES
................................................................................
In accordance with Statement of Financial Accounting Standards 109,
"Accounting for Income Taxes" (FAS 109), the provision (benefit) for taxes on
income for the years ending December 31 consists of the following:

<TABLE>
<CAPTION>
----------------------------------
1995 1994 1993
----------------------------------
<S> <C> <C> <C>
Pretax income
Domestic ................. $ 233,125 $ 202,363 $ 189,122
Foreign .................. 37,665 8,567 3,785
----------------------------------
Total pretax income .... $ 270,790 $ 210,930 $ 192,907
==================================
Current
Federal .................. $ 86,611 $ 62,800 $ 43,998
State .................... 13,533 10,074 7,320
Foreign .................. 11,843 3,958 1,521
----------------------------------
Total current ......... 111,987 76,832 52,839
----------------------------------
Deferred
Federal .................. (6,065) 4,263 14,005
State .................... (866) 949 2,924
Foreign .................. 1,584 456 5,432
----------------------------------
Total deferred ........ (5,347) 5,668 22,361
----------------------------------
Total taxes ................. $ 106,640 $ 82,500 $ 75,200
==================================

</TABLE>

Current deferred income tax (benefit) expense results from temporary
differences in the recognition of revenue and expense for tax and financial
statement purposes. The sources of these differences and the tax effect of each
are as follows:

<TABLE>
<CAPTION>
----------------------------------
1995 1994 1993
----------------------------------
<S> <C> <C> <C>
Restructuring charge .......... $ 1,034 $ 2,815 $ 8,711
Sale of an affiliate .......... 6,409
Depreciation expense .......... (2,884) 45 1,163
Benefit plan costs ............ (1,282) 3,125 7,379
Other items, net .............. (2,215) (317) (1,301)
----------------------------------
Total deferred .......... $ (5,347) $ 5,668 $ 22,361
</TABLE> ==================================

Cumulative deferred tax liabilities (assets) are comprised of the
following at December 31:

<TABLE>
<CAPTION>
--------------------
1995 1994
--------------------
<S> <C> <C>
Depreciation ..................... $ 67,872 $ 70,751
Employee benefits ................ 26,182 21,062
Other ............................ 970 2,179
--------------------
Gross deferred tax liabilities .. 95,024 93,992
--------------------
Restructuring .................... (3,354) (4,193)
Retiree health benefits .......... (31,550) (27,482)
Foreign loss carryforwards ....... (10,960) (11,231)
Capital loss carryforwards ....... (6,047) (6,830)
Employee benefits ................ (15,382) (13,026)
Other ............................ (8,024) (7,199)
--------------------
Gross deferred tax assets ........ (75,317) (69,961)
Valuation allowance on deferred
tax assets .................... 10,960 11,231
--------------------
Total deferred taxes, net ..... $ 30,667 $ 35,262
</TABLE> ====================

The net change in the valuation allowance for deferred tax assets is a net
decrease of $271 in 1995, compared with a net increase of $3,220 in 1994. The
change relates to utilization of current net operating losses of certain
foreign subsidiaries and the addition to the reserve for current net operating
losses for which their use is limited to future taxable earnings.
Approximately $28,000 of foreign subsidiary net operating loss
carryforwards remain at December 31, 1995. Their use is limited to future
taxable earnings of the respective foreign subsidiaries. Of these loss
carryforwards approximately $17,300 have no expiration date. The remaining loss
carryforwards expire at various dates in the future.
A reconciliation of the U.S. federal statutory tax rate to the actual
consolidated tax expense is as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------
1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Statutory tax rate ..... $ 94,776 35.0% $ 73,825 35.0% $ 67,517 35.0%
State income taxes,
net of federal tax
benefit ................ 8,560 3.2 7,087 3.3 7,039 3.6
Goodwill ............... 3,556 1.3 3,777 1.8 1,694 .9
Company-owned
life insurance ......... (10,024) (3.7) (5,091) (2.4) (1,570) (.8)
Adjustment of prior
years' accrual ......... 6,266 2.3
Other, net ............. 3,506 1.3 2,902 1.4 520 .3
---------------------------------------------------------------
Total taxes ......... $ 106,640 39.4% $ 82,500 39.1% $ 75,200 39.0%
===============================================================
</TABLE>

The Internal Revenue Service has examined the Company's federal income tax
returns for all years through 1992, and the years have been closed through
1989. The Company believes that it has made adequate provision for income taxes
that may become payable with respect to open years.

<PAGE> 19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sonoco Products Company
(Dollars and shares in thousands except per share data)

Undistributed earnings of international subsidiaries totaled $49,192 at
December 31, 1995. There have been no U.S. income taxes provided on the
undistributed earnings since the Company considers these earnings to be
indefinitely reinvested to finance international growth and expansion. If such
amounts were remitted, loaned to the Company or the stock in the foreign
subsidiaries sold, these earnings could become subject to tax; however, the
Company believes United States foreign tax credits would substantially
eliminate any taxes due.

15. COMMITMENTS AND CONTINGENCIES
................................................................................
The Company is a party to various legal proceedings incidental to its
business and is subject to a variety of environmental and pollution control
laws and regulations in all jurisdictions in which it operates. As is the case
with other companies in similar industries, the Company faces exposure from
actual or potential claims and legal proceedings. In 1994, a suit was filed
against the Company in the U.S. District Court for the District of
Massachusetts for alleged patent infringement involving grocery bag packs. The
suit also seeks to have a patent involving plastic bag loading systems owned by
the Company declared invalid. The Company believes this lawsuit is without
merit. The Company is vigorously defending its position and expects to prevail.
The Company has been named as a potentially responsible party at several
environmentally contaminated sites, primarily located in the Northeast, owned
by third parties. These sites represent the Company's largest potential
environmental liabilities. The Company has $4,400 accrued for these
contingencies as of December 31, 1995 and 1994. Due to the complexity of
determining clean-up costs associated with the sites, a reliable estimate of
the ultimate cost to the Company cannot be determined. Further, all of the
sites are also the responsibility of other parties. The Company's liability, if
any, is shared with such other parties, but the Company's share has not been
finally determined in most cases. In some cases, the Company has cost sharing
agreements with other potentially responsible parties with respect to a
particular site. Such agreements relate to the sharing of legal defense costs
or clean-up costs, or both. The Company has assumed, for purposes of estimating
amounts to be accrued, that the other parties to such cost sharing agreements
will perform as agreed. It appears that final resolution of some of the sites
is years away. Accordingly, a reliable estimate of the ultimate cost to the
Company with respect to such sites cannot be determined. However, costs will be
accrued as necessary once reasonable estimates are determined.
Although the level of future expenditures for legal and environmental
matters is impossible to determine with any degree of probability, it is
management's opinion that such costs, when finally determined, will not have a
material adverse effect on the consolidated financial position of the Company.

16. INTERNATIONAL OPERATIONS
................................................................................
The operating profit, net assets and dividends received by the Company
from operations outside the United States are as follows:

<TABLE>
<CAPTION>
---------------------
1995 1994
---------------------
<S> <C> <C>
Operating profit ................... $ 41,984 $ 15,675
Net assets ......................... 299,792 245,423
Dividends .......................... 581 502
</TABLE>

The aggregate foreign currency transaction gain/loss recognized in net
income was immaterial for 1995, 1994 and 1993. Information regarding the
Company's significant foreign geographic area in Europe is as follows:

<TABLE>
<CAPTION>
------------------------------
1995 1994 1993
------------------------------
<S> <C> <C> <C>
Sales to unaffiliated
customers................ $276,029 $184,247 $180,044
Operating profit (loss)..... 8,446 (2,085) (890)
Total assets................ 296,325 258,463 171,073
</TABLE>

17.SHAREHOLDERS' EQUITY
................................................................................
On April 19, 1995, the Board of Directors declared a five percent stock
dividend issued on June 9, 1995. All references in the accompanying
Consolidated Financial Statements to numbers of common shares and per share
data have been restated to give retroactive effect to the stock dividend.
In 1993, the Company issued 3,450,000 shares of $2.25 Series A Cumulative
Convertible Preferred Stock for $172,500, or $50 per share. These securities
are convertible into the Company's common stock at a price of $24.11 per share.
This stock is redeemable at the option of the Company, on or after November 8,
1996, at a redemption price of $51.575 per share and decreasing ratably
annually to $50 per share on or after November 1, 2003. Dividends on the
Convertible Preferred Stock, which are paid quarterly, accrue and are
cumulative from the date of original issuance.

<PAGE> 20
44

Notes to Consolidated Financial Statements
Sonoco Products Company

18. FINANCIAL REPORTING FOR BUSINESS SEGMENTS
..............................................................................
(Years ended December 31)

The Financial Reporting for Business Segments should be read in conjunction
with the Management's Discussion and Analysis (which describes the segments in
detail) appearing on pages 26-31.

<TABLE>
<CAPTION>
------------------------------------------------------------------------
CONVERTED
(Dollars in thousands) PRODUCTS PAPER INTERNATIONAL CORPORATE CONSOLIDATED
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total Revenue
1995............................ $1,994,535 $ 445,072 $ 574,890 $ 3,014,497
1994............................ 1,771,441 330,982 438,383 2,540,806
1993............................ 1,466,486 278,904 406,914 2,152,304

Intersegment Sales(1)
1995............................ $ 32,375 $ 267,401 $ 8,548 $ 308,324
1994............................ 29,970 203,569 7,140 240,679
1993............................ 28,615 173,640 2,825 205,080

Sales to Unaffiliated Customers
1995............................ $1,962,160 $ 177,671 $ 566,342 $ 2,706,173
1994............................ 1,741,471 127,413 431,243 2,300,127
1993........................... 1,437,871 105,264 404,089 1,947,224

Operating Profit(2)
1995............................ $ 215,553 $ 87,455 $ 41,984 $ (74,202) $ 270,790
1994............................ 188,517 64,495 15,675 (57,757) 210,930
1993............................ 157,426 57,867 11,923 (34,309) 192,907

Identifiable Assets(3)
1995............................ $1,150,146 $ 193,739 $ 492,916 $ 278,612 $ 2,115,413
1994............................ 1,056,341 157,408 405,604 215,700 1,835,053
1993............................ 1,018,056 140,406 349,144 199,519 1,707,125

Depreciation, Depletion and
Amortization
1995............................ $ 76,767 $ 15,876 $ 27,857 $ 5,336 $ 125,836
1994............................ 69,076 14,471 23,161 6,089 112,797
1993............................ 51,360 12,974 26,135 5,276 95,745

Capital Expenditures
1995............................ $ 86,514 $ 37,402 $ 45,044 $ 12,472 $ 181,432
1994............................ 77,275 18,874 27,727 2,870 126,746
1993............................ 46,969 20,450 41,209 6,968 115,596
</TABLE>

(1) Intersegment sales are recorded at a market-related transfer price.

(2) Interest income, interest expense and unallocated corporate expenses are
excluded from the operating profits by segment and are shown under
Corporate. In addition, 1993 Corporate operating profit includes $5,800 for
unusual items, as described in Note 3 to the Consolidated Financial
Statements.

(3) Identifiable assets are those assets used by each segment in its
operations. Corporate assets consist primarily of cash and cash
equivalents, investments in affiliates, headquarters facilities and prepaid
expenses.
<PAGE> 21
45

Reports to Consolidated Financial Statements

Report of Management

The management of Sonoco Products Company is responsible for the integrity
and objectivity of the financial statements and other financial information
included in this annual report. These statements have been prepared in
conformity with generally accepted accounting principles.
Sonoco's accounting systems are supported by internal control systems
augmented by written policies, internal audits and the selection and training
of qualified personnel.
The Board of Directors, through its Audit Committee, consisting of
outside directors, is responsible for reviewing and monitoring the Company's
financial reporting and accounting practices. This committee meets periodically
with management, the internal auditors and the independent accountants to
assure each is carrying out its responsibilities.
Coopers & Lybrand L.L.P., independent certified public accountants, have
audited the financial statements, and their report is herein.

F. Trent Hill, Jr.
- ------------------
F. Trent Hill, Jr.

Vice President and
Chief Financial Officer

Report of Independent Certified Public
Accountants

TO THE SHAREHOLDERS AND DIRECTORS OF
SONOCO PRODUCTS COMPANY:

We have audited the accompanying consolidated balance sheets of Sonoco
Products Company as of December 31, 1995 and 1994, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Sonoco
Products Company as of December 31, 1995 and 1994, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

COOPERS & LYBRAND L.L.P.
- ------------------------
COOPERS & LYBRAND L.L.P.

Charlotte, North Carolina
January 31, 1996

<PAGE> 22
46

Board of Directors:

[PHOTO] [PHOTO] [PHOTO]

Leo Benatar Charles J. Bradshaw Robert J. Brown

LEO BENATAR, 66, Chairman - Sonoco Engraph, Atlanta, Ga., 1995 - 1996 and Senior
Vice President, Sonoco Products Company 1993 - 1996. Served on Board since 1993.

- - -

CHARLES J. BRADSHAW, 59, President and Director, Bradshaw Investments, Inc.
(private investments), Georgetown, S.C., since 1986. Served on Board since
1986. Member of the Executive Compensation Committee.

- - -

ROBERT J. BROWN, 61, Founder, Chairman and President of B & C Associates (a
public relations and marketing research firm), High Point, N.C., since 1973.
Served on Board since 1993. Member of the Audit Committee and the Finance
Committee.

- - -

[PHOTO]

Peter C. Browning

PETER C. BROWNING, 54, President and Chief Operating Officer since 1996. Served
on Board since April 1995.

- - -

[PHOTO]

Charles W. Coker

CHARLES W. COKER, 62, Chairman and Chief Executive Officer since 1990. Served
on Board since 1962.

- - -

[PHOTO]

Fitz L. H. Coker

FITZ L. H. COKER, 60, Retired, formerly Senior Vice President, 1976 - 1979.
Served on Board since 1964. Member of the Finance Committee and the Nominating
Committee.

- - -

[PHOTO]

James L. Coker

JAMES L. COKER, 55, President, JLC Enterprises (private investments),
Stonington, Conn., since 1979. Served on Board since 1969. Member of the
Nominating Committee and the Finance Committee.

- - -

[PHOTO]

Thomas C. Coxe, III

THOMAS C. COXE, III, 65, Retired, formerly Senior Executive Vice President
1993-1996. Served on Board since 1982.

- - -

[PHOTO]

Alan T. Dickson

ALAN T. DICKSON, 64, Chairman, Ruddick Corporation (a diversified holding
company), Charlotte, N.C., since February 1994. Formerly President and
Director, Ruddick Corporation, since 1968. Served on Board since 1981. Member
of the Executive Compensation Committee, the Finance Committee and the Audit
Committee.

- - -

[PHOTO]

Robert E. Elberson

ROBERT E. ELBERSON, 67, Retired, formerly Vice Chairman and Director, Sara Lee
Corporation, Chicago, Ill., 1986 - 1989. Served on Board since 1985. Member of
the Executive Compensation Committee and the Nominating Committee.

- - -

[PHOTO]

James C. Fort

JAMES C. FORT, 69, Retired, formerly Senior Vice President, 1979 - 1987.
President and Director of the Trust Company of South Carolina, Inc. (insurance
brokers), Hartsville, S.C., since 1987. Served on Board since 1969. Member of
the Audit Committee and the Nominating Committee.

- - -

[PHOTO]

Paul Fulton

PAUL FULTON, 61, Dean, The Kenan-Flagler Business School, The University of
N.C., Chapel Hill, N.C., since 1993. Formerly President and Director of Sara
Lee Corporation. Served on Board since 1989. Member of the Finance Committee
and the Executive Compensation Committee.

- - -

[PHOTO]

Bernard L. M. Kasriel

BERNARD L. M. KASRIEL, 49, Vice Chairman and COO of Lafarge (a construction
materials group), Paris, France. Served on Board since April 1995. Member of
the Audit Committee and Executive Compensation Committee.

- - -

[PHOTO]

Russell C. King, Jr.

RUSSELL C. KING, JR., 61, Retired, formerly President and Chief Operating
Officer 1990 - 1994. Served on Board since 1991. Member of the Audit Committee
and the Finance Committee.

- - -

[PHOTO]

Edgar H. Lawton, Jr.

EDGAR H. LAWTON, JR., 66, President and Director, Hartsville Oil Mill (a
vegetable oil processor), Darlington, S.C., since 1962. Served on Board since
1968. Member of the Nominating Committee and the Executive Compensation
Committee.

- - -

HUGH L. MCCOLL, JR., 60, Chief Executive Officer, NationsBank Corporation,
Charlotte, N.C., since 1983. Served on Board since 1972. Member of the Finance
Committee and the Nominating Committee.

[PHOTO] [PHOTO] [PHOTO]

Hugh L. McColl, Jr. E. Craig Wall, Jr. Dona Davis Young

- - -

E. CRAIG WALL, JR., 58, President and Director, Canal Industries (a forest
products firm), Conway, S.C., since 1969. Served on Board since 1976. Member of
the Audit Committee and the Finance Committee.

- - -

DONA DAVIS YOUNG, 42, Executive Vice President, Individual Insurance and
General Counsel of Phoenix Home Life Mutual Insurance Company since 1995.
Served on Board since October 1995. Member of the Executive Compensation
Committee and the Audit Committee.

<PAGE> 23
47

Executive Officers:

CHARLES W. COKER, 62, Chairman of the Board and Chief Executive Officer since
1990. Previously President and Chief Executive Officer 1976 - 1990; President
1970 - 1976; Executive Vice President 1966-1970. Began full-time employment with
Sonoco in 1958.

- - -

PETER C. BROWNING, 54, President and Chief Operating Officer since February
1996. Previously Executive Vice President - Global Industrial Products & Paper
Divisions 1993 - 1996; Chairman & Chief Executive Officer - National Gypsum
Company 1990 - 1993. Joined Sonoco in 1993.

- - -

THOMAS C. COXE, III, 65, Senior Executive Vice President since 1993. Previously
Executive Vice President 1985 - 1993; Senior Vice President 1979 - 1983; Senior
Vice President - Corporate Development 1977-1979; Vice President - Corporate
Development 1977. Joined Sonoco in 1970. Retired February 1996.

- - -

LEO BENATAR, 66, Senior Vice President since 1993 and Chairman of Sonoco
Engraph since 1995. Previously Chairman and CEO of Engraph, Inc. 1981 - 1993;
President - Mead Packaging 1972 - 1981. Began working with The Mead Corporation
in 1954. Joined Sonoco with the Engraph acquisition in 1993. Retirement
announced for Spring 1996.

- - -

[PHOTO]

Bernard W. Campbell

BERNARD W. CAMPBELL, 46, Vice President - Information Services since February
1996. Previously Staff Vice President - Information Services 1991 - 1996;
Director - Corporate Information Services 1990 - 1991; Director - Software
Support 1988. Joined Sonoco in 1988.

- - -

[PHOTO]

Allan V. Cecil

ALLAN V. CECIL, 54, Vice President, Investor Relations and Corporate
Communications since 1996. Prior to Sonoco was with National Gypsum Company and
Mesa Petroleum Company. Joined Sonoco in January 1996.

- - -

[PHOTO]

C. William Claypool

C. WILLIAM CLAYPOOL, 60, Vice President - Paper Division since 1987. Previously
Division Vice President, General Manager - Paper 1986 - 1987; Division Vice
President 1980 - 1986; Regional General Manager 1977 - 1980. Joined Sonoco in
1977.

- - -

[PHOTO]

Peter C. Coggeshall, Jr.

PETER C. COGGESHALL, JR., 52, Vice President - Administration since 1991.
Previously Group Vice President-Global Paper - 1990 - 1991; Vice
President-Industrial Products Division - 1986 - 1990; Vice President-Paper
Division - 1978 - 1986; Division Vice President/General Manager - Paper Division
1977 - 1978; Division Vice President Operations - General Products Division
1977. Joined Sonoco in 1969.
- - -

[PHOTO]

Harris E. Delolach, Jr.

HARRIS E. DELOACH, JR., 51, Executive Vice President since February 1996.
Previously Group Vice President 1993 - 1996; Vice President - Film, Plastics &
Special Products 1993; Vice President - High Density Film Products Division
1989 - 1993; Vice President Administration & General Counsel 1985 - 1989. Joined
Sonoco in 1985.

- - -

[PHOTO]

Cynthia A. Hartley

CYNTHIA A. HARTLEY, 47, Vice President - Human Resources since 1995. Previously
Vice President - Human Resources with National Gypsum Company, Dames & Moore
and previous experience with Continental Can Corp. Joined Sonoco in 1995.

- - -

[PHOTO]

F. Trent Hill, Jr.

F. TRENT HILL, JR., 43, Vice President and Chief Financial Officer since 1995.
Previously Vice President - Finance 1994 - 1995; Vice President - Industrial
Products North America 1990 - 1994; Vice President - Finance 1987-1989; Vice
President - Corporate Controller 1982 - 1987; Staff Vice President Corporate
Controller 1981 - 1982; Director of Audit & Taxes 1979 - 1981; Internal Audit
Manager 1979. Prior to joining Sonoco in 1979 he worked with Coopers & Lybrand.

- - -

[PHOTO]

Ronald E. Holley

RONALD E. HOLLEY, 53, Vice President - High Density Film Products since 1993.
Previously Vice President - Total Quality Management 1990 - 1993; Vice President
- - Industrial Products Division 1987 - 1990; Division Vice President - Industrial
Products Division 1985 - 1987; Division Vice President Consumer Products
Division 1983. Joined Sonoco in 1964.

- - -

[PHOTO]

Charles J. Hupfer

CHARLES J. HUPFER, 49, Vice President, Treasurer and Corporate Secretary since
1995. Previously Treasurer 1988 - 1995; Director of Tax and Audit 1985 - 1988;
Director - International Finance & Accounting 1980 - 1985; Manager of Corporate
Accounting 1978 - 1980; Manager of Financial Reporting 1975 - 1978. Prior to
joining Sonoco in 1975 he worked with Coopers & Lybrand.

- - -

[PHOTO]

J. Randy Kelley

J. RANDY KELLEY, 41, Vice President Industrial Products Division - North
America since 1994. Previously Division Vice President Industrial Container
1991 - 1993; Area Manufacturing Manager - Consumer Products Division 1988 -
1990; Manager - Special Projects 1986 - 1987; Plant Manager - Consumer Products
Division, Naperville, Ill., 1984 - 1986. Joined Sonoco in 1978.

- - -

[PHOTO]

Raymond L. McGowan, Jr.

RAYMOND L. MCGOWAN, JR., 44, Vice President - Consumer Products Division, U.S.
and Canada since February 1996. Previously Division Vice President & General
Manager - Consumer Products Division, U.S. and Canada 1994 - 1996; Division Vice
President - Sales, Marketing & Technology - Consumer Products Division
1987 - 1992; Division Sales Manager - Consumer Products Division 1987; Division
Marketing Manager 1985. Prior to joining Sonoco in 1983 worked with Container
Corporation of America.

- - -

[PHOTO]

Harry J. Moran

HARRY J. MORAN, 63, Executive Vice President since February 1996. Previously
Group Vice President - Consumer Packaging Group 1993 - 1996; Vice President &
General Manager - Consumer Packaging 1990 - 1993; Division Vice President &
General Manager - Consumer Products Division 1985 - 1990; Division Vice
President - Consumer Products Division 1983 - 1984. Prior to joining Sonoco in
1983 he worked with Container Corporation of America.

- - -

[PHOTO]

Earl P. Norman, Jr.

EARL P. NORMAN, JR., 59, Vice President - Technology since 1989. Previously
Staff Vice President - Business Development & Technology 1985 - 1986; Director -
Business Development & Technology 1985. Prior to joining Sonoco in 1969 worked
with Reynolds Metals Company.

- - -

[PHOTO]

Maurice M. Richardson

MAURICE M. RICHARDSON, 61, Vice President of Sonoco and President of Sonoco
Engraph since February 1996. Previously Chief Executive Officer - Sonoco
Engraph's label, screen printing and paperboard carton businesses 1995 - 1996;
President, Chief Operating Officer of Engraph 1994 - 1995; Executive Vice
President, Chief Operating Officer 1992 - 1994; Group Vice President 1983 -
1992. Prior to working with Engraph was with Mead Packaging. Joined Sonoco
with the Engraph acquisition in 1993.

<PAGE> 24
48

Division and Staff Officers/Subsidiary and Affiliate Officers

JIM C. BOWEN, 45, Vice President - Manufacturing North America, Paper Division
since 1994. Previously Director of Manufacturing North America, Paper Division
1993 - 1994. Northeast Regional Manufacturing Manager 1988 - 1993. Production
Manager - Hartsville Cylinder Mill 1983 - 1988. Joined Sonoco in 1972.

- - -

GARY A. CRUTCHFIELD, 46, Division Vice President - Industrial Container
Division since 1994. Previously Division Vice President - Special Products
1989 - 1990; General Manager - Retail & Industrial Film - High Density Film
Division 1988 - 1989; Assistant to Senior Vice President 1987 - 1988; General
Manager - Baker Reels Division 1985 - 1987; Area Manufacturing Manager -
Consumer Products Division 1985. Joined Sonoco in 1974.

- - -

BASIL H. FORD, 51, Staff Vice President since 1995. Previously Vice President
with Engraph. Joined Sonoco with the Engraph acquisition in 1993.

- - -

LARRY O. GANTT, 58, Division Vice President - Global Operations - Consumer
Packaging since 1994. Previously Division Vice President Manufacturing -
Consumer Products Division 1987 - 1994; Division Operations Manager - Consumer
Packaging 1985 - 1987; Manufacturing Manager - Consumer Packaging 1980 - 1985;
Regional and Area Manager - Consumer Packaging 1973 - 1980; Plant Manager -
Consumer Packaging 1967 - 1973. Joined Sonoco in 1963.

- - -

DONALD M. GORE, 46, Division Vice President - Textiles and Specialty -
Industrial Products Division North America since 1994. Previously Vice
President - Sales for Industrial Products Division North America 1987 - 1991;
Director - Sales & Marketing 1983 - 1987; Director - Marketing 1972 - 1983;
Sales Representative 1972. Joined Sonoco in 1972.

- - -

JOHN D. HORTON, 53, Division Vice President - Sales & Marketing - High Density
Film Products since 1988. Previously Sales & Marketing Manager - Polysack
1987 - 1988; National Sales Manager - Consumer Products Division 1978 - 1987;
R&D Manager - Consumer Products Division 1977 - 1978; R&D Project Leader
1975 - 1977; Plant Manager - Consumer Products Division - Alpha, Ohio,
facility 1974 - 1975; Account Representative - Consumer Products Division
1974. Joined Sonoco in 1972.

- - -

KEVIN P. MAHONEY, 40, Staff Vice President - Corporate Planning since February
1996. Previously Director of Corporate Planning 1993 - 1996; Manager of
Financial Planning 1989 - 1993. Prior to joining Sonoco in 1987 he worked with
Arthur Andersen.

- - -

JOHN MIKULA, 54, Division Vice President, Marketing/Customer Service -
Industrial Container Division since October 1994. Previously Manager -
Strategic Planning and New Business Development 1992 - 1994; General Manager
Sonoco Plastic Drum 1986 - 1992. Prior to joining Sonoco in 1986 he worked with
Pepsi and Continental Fibre Drum.

- - -

MARC W. NATHAN, 43, Staff Vice President - Compensation and Benefits since
1994. Previously Director - Compensation and Benefits 1990 - 1994. Prior to
joining Sonoco in 1990 worked with Ryder System, Inc. and Sirota & Alper
Associates.

- - -

JOHN L. NEWSOME, JR., 49, Division Vice President - Paper Mill Core & Film Core
Business Units - Industrial Products since 1994. Previously Division Vice
President - Operations North America - Industrial Products Division 1992 - 1994;
Vice President - Operations - Paper Division 1987 - 1992; Division Vice
President 1984 - 1987; Production Manager - Hartsville Cylinder Mill 1976.
Joined Sonoco in 1969.

- - -

CHARLES F. PATERNO, 39, Division Vice President, Industrial
Products/Paper-Europe since 1996. Previously President-Sonoco Limited
1994 - 1995; General Manager, Specialty Business Unit - IPD 1991 - 1994; General
Manager - Western Region IPD 1989 - 1991; Sales Manager - Northwest IPD
1987 - 1989; Plant Manager - Vancouver, Wash. - IPD 1985 - 1987; Plant Manager -
Camden, Ark. 1984 - 1985. Joined Sonoco in 1983.

- - -

FRANK J. POPELARS, 54, Staff Vice President, Corporate Controller since 1993.
Previously served as Director Administration & Control, Consumer Packaging
Group 1989 - 1993; Assistant Controller, Consumer Products Group 1987 - 1989;
Division Manager, Accounting/MIS 1986 - 1987. Prior to joining Sonoco in 1983
worked with Container Corporation of America.

- - -

CHARLES W. REID, 57, Division Vice President and General Manager - Baker
Division since 1988. Worked with Baker Reels during and prior to Sonoco's 1980
acquisition. Rejoined Sonoco in 1988.

- - -

J. C. RHODES, 57, Division Vice President - Operations Support since 1991.
Previously Division Vice President - Industrial Products Division 1980 - 1991;
General Manager of the Midwest Region Industrial Products Division 1978 - 1980;
Plant Manager - Industrial Products - Akron, Ind., plant 1973-1978. Joined
Sonoco in 1961.

- - -

JUAN ROMAN, 54, Vice President IPD/Paper South America since 1993; General
Manager, Colombia, 1984 - 1992. Joined Sonoco in 1984. Previously with
International Paper, W.R. Grace and Fabricato Colombia.

- - -

JAMES H. SHELLEY, 52, Staff Vice President - Employee Relations & Labor Counsel
since 1980. Previously Director of Industrial Relations & Personnel 1974 - 1980;
Director, Industrial Relations 1974. Joined Sonoco in 1965.

- - -

EDDIE L. SMITH, 44, Division Vice President - Consumer Products, Europe since
1994. Prior to joining Sonoco, he was Managing Director, CMB/Sonoco 1989 - 1993.
He also held the positions of General Manager and Sales and Marketing Manager
with CarnaudMetalbox.

- - -

KARL SVENDSEN, 54, Division Vice President, Operating Resources - Industrial
Container Division since October 1994. Previously General Manufacturing Manager
1981 - 1994; Plant Manager 1981. Prior to joining Sonoco in 1970 worked with
General Dynamics.

- - -

DAVID THORNELY, 51, Managing Director - Sonoco Australasia since 1994.
Previously General Manager - Sonoco Australia 1991 - 1994. Prior to joining
Sonoco was Managing Director, Bunzl Industries Ltd., Australia.

- - -

Subsidiary and Affiliate Officers

CRELLIN INTERNATIONAL
MICHAEL DRANICHAK, 61, President & CEO - Crellin International since 1989.
Previously President - Crellin, Inc. 1984 - 1989; Assistant to the President,
Vice President and President of Crellin Plastics (Albany International)
1969 - 1983; Service Engineer, Designer and Department Manager of several
different production departments 1959 - 1969. Joined Sonoco with the Crellin
acquisition in 1993.

- - -

PAPER STOCK DEALERS, INC.
J. BLAKE BOYD, 43, President-Paper Stock Dealers, Inc. since 1989. Previously
Manager - Paper Stock Procurement 1980 - 1989; Eastern Regional Manager - Paper
Stock Procurement 1976 - 1979. Joined Sonoco in 1976.

- - -

PAPETERIES DU RHIN
PIERRE LHOMME, 73, President-Papeteries Du Rhin since 1986. Previously Chairman
of Lhomme S.A. 1965 - 1990; President of the French Cardboard Federation
1974 - 1980; President of the Chamber of Commerce in Sens 1985 - 1989. Joined
Sonoco in 1990 when Lhomme S.A. was purchased by Sonoco.

- - -

SHOWA MARUTSUTSU
ISAO SATO, 64, Chairman of Showa Marutsutsu Company, Ltd. and Showa Products
Company Ltd. since July 1995 and October 1995, respectively. President of
Showa Products and Showa Marutsutsu since 1964 and 1966, respectively. Joined
Showa Marutsutsu in 1954.

- - -

JUN SATO, 35, President of Showa Marutsutsu and Showa Products since July 1995
and October 1995, respectively. Director of Showa Marutsutsu since 1991. Joined
Showa Marutsutsu in 1986.

- - -

SONOCO ASIA
PERRY D. SMITH, 45, Managing Director - Sonoco Asia, L.L.C. since 1994.
Previously Director, Business Development - Asia Pacific 1992 - 1994; Director,
Marketing - International Division (Asia) 1988 - 1992. Prior to joining Sonoco
in 1988 worked with LTV Aerospace and Defense.

- - -

SONOCO ENGRAPH
MAURICE M. RICHARDSON, 61, President of Sonoco Engraph since 1994.

- - -

WILLIAM J. BIEDENHARN, 43, President, General Manager-Labels, Sonoco Engraph
since 1996. Previously Division Vice President - Industrial Products & Paper
Europe 1993 - 1995; Division Vice President - Global Marketing Industrial
Products Division 1989 - 1993; Consumer Products Division Marketing Manager
1985-1989. Prior to joining Sonoco in 1985 he worked with Owens-Illinois.

- - -

SONOCO LIMITED
RODGER D. FULLER, 34, President - Sonoco Limited since February 1996.
Previously Manager of Manufacturing - Consumer Products Division 1994 - 1996;
Area Manufacturing Manager 1991 - 1994; Plant Manager 1989 - 1990;
miscellaneous manufacturing and administrative positions since joining Sonoco
in 1985.

<PAGE> 25
Shareholder Information

Corporate Offices
North Second Street
Hartsville, SC 29550
(803) 383-7000
Fax: (803) 383-7008

Independent Accountants
Coopers & Lybrand L.L.P.
NationsBank Corporate Center
100 North Tryon Street, #3400
Charlotte, NC 28202

Transfer Agent
Wachovia Bank of North Carolina, N.A.
Corporate Trust Department
P.O. Box 3001
Winston-Salem, NC 27102

Legal Counsel
Sinkler & Boyd, P.A.
P.O. Box 11889
Columbia, SC 29211

Shareholder Services
Sonoco Products Company
Treasurer-B01
P.O. Box 160
Hartsville, SC 29551-0160
(803) 383-7277

Investor Relations and
Corporate Communications
Sonoco Products Company
Corporate Communications-A09
P.O. Box 160
Hartsville, SC 29551-0160
(803) 383-7437
Fax: (803) 383-7008
Internet: http://www.sonoco.com

Sonoco News Release
Copies of the Company's recent news releases
are available at no charge via fax by calling
"Company News On-Call" at 1-800-758-5804,
Sonoco code #805487. This program is a service
of PR NewsWire.

Annual Meeting of Sonoco Shareholders
The annual meeting of shareholders will be
held at the Center Theater on Fifth Street in
Hartsville, S.C., at 11 a.m., Wednesday,
April 17, 1996.

Sonoco Shares
Sonoco common (symbol:SON) and preferred
(symbol:SONprA) stock is traded on the New
York Stock Exchange.

[LOGO]

Form 10-K Available
A copy of the Company's annual report on Form
10-K filed with the Securities and Exchange
Commission may be obtained by shareholders
without charge after April 1, 1996, by writing to:
Sonoco Products Company
Corporate Communications - A09
P.O. Box 160
Hartsville, SC 29551-0160

Dividend Reinvestment
A dividend reinvestment plan is available to
record Sonoco shareholders. For more
information write to:
Wachovia Bank of North Carolina, N.A.
Corporate Trust Department
P.O. Box 3001
Winston-Salem, NC 27102

Direct Deposit of Dividends
Sonoco shareholders may request automatic
deposit of cash dividends to checking, savings
or money market accounts that participate in
the Automatic Clearinghouse System. If you
would like this service, please contact:
Wachovia Bank of North Carolina, N.A.
Corporate Trust Department
P.O. Box 3001
Winston-Salem, NC 27102

Share Account Information
Shareholders with inquiries concerning their
accounts may call Wachovia Bank of North
Carolina, N.A. on their toll-free line. The number
is 1-800-633-4236.

[GRAPH]

CASH DIVIDENDS DECLARED - COMMON
(millions $)
The Sonoco quarterly dividend was
increased from $.13 to $.15 per share
beginning in the second quarter of 1995.
Dividends are increased as earnings justify.

[GRAPH]

MARKET VS. BOOK VALUE
PER COMMON SHARE
($)
The market price of the Company's stock increased
26% to $26.25 per share at the end of 1995. The
book value per common share increased to $8.19
in 1995, compared with $7.23 in 1994.

Prior years' data restated to reflect the 5% stock
dividend in June 1995.

[GRAPH]

LONG-TERM DEBT
(millions $)
Long-term debt increased $103.9 million
to $591.9 million in 1995, primarily to
fund acquisitions and internal expansion.

<PAGE> 1

EXHIBIT (21)

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

Subsidiaries of Sonoco Products Company, pursuant to Item 601 of Regulation
S-K, as of December 31, 1995 are:

1. KMI Continental Fibre Drum, Inc., 100%-owned domestic
subsidiary incorporated in the State of Delaware.

a. Sonoco Fibre Drum, Inc., 100%-owned domestic
subsidiary, incorporated in the State of Delaware.

2. Sonoco Plastic Drum, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Illinois.

a. Sonoco Plastic Drum Southwest Division, Inc., 100%-owned
domestic subsidiary, incorporated in the State of Texas.

b. Sonoco Plastic Drum Southeast Division, Inc., 100%-owned
domestic subsidiary, incorporated in the State of Kentucky.

3. Paper Stock Dealers, Inc., 100%-owned domestic subsidiary,
incorporated in the State of North Carolina.

4. Sonoco-Crellin, Inc., 100%-owned domestic subsidiary, incorporated
in the State of Delaware.

a. Crellin International, Inc., 100%-owned domestic
subsidiary, incorporated in the State of Delaware, holder of
securities in:

1. Crellin, Inc., 100%-owned domestic subsidiary, incorporated
in the State of New York.

a. Crellin Europe B.V., 100%-owned Dutch subsidiary.

1. Crellin B.V., 100%-owned Dutch subsidiary.

2. Sebro Plastics, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Michigan.

3. Injecto Mold, 100%-owned domestic subsidiary, incorporated
in the State of Illinois.

5. Engraph, Inc., 100%-owned domestic subsidiary, incorporated in the
State of Delaware.

a. Engraph Puerto Rico, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Delaware.

<PAGE> 2
EXHIBIT (21)
SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

b. E L R, Inc., 100%-owned domestic subsidiary, incorporated in
the State of Delaware.

1. Screen Graphics, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Tennessee.

2. Graphic Resources, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Kentucky.

c. Polaris Packaging, Inc., 100%-owned domestic subsidiary,
incorporated in the State of New Jersey.

d. Engraph Mexico S.A. de C.V., 100%-owned Mexican subsidiary.

6. SPC Management, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Delaware.

a. SPC Capital Management, Inc., 100%-owned domestic
subsidiary, incorporated in the State of Delaware.

b. SPC Resources, Inc., 100%-owned domestic
subsidiary, incorporated in the State of Delaware.

7. Timber Properties, Ltd., (B.V.I.), 100%-owned by Sonoco
Products Company.

8. Sonoco International, Inc., 100%-owned domestic subsidiary,
incorporated in the State of Delaware, holder of securities in:

a. Sonoco Limited, 100%-owned Canadian subsidiary.

b. Sonoco U.K. Limited Inc., 100%-owned subsidiary
incorporated in the State of Delaware, holder of securities in:

1. Sonoco Products Company U.K. Limited, 100%-owned U.K.
subsidiary.

a. Sonoco Limited, 100%-owned English subsidiary.

b. Sonoco Consumer Products Limited, U.K., 100%-owned
English subsidiary.

<PAGE> 3

EXHIBIT (21)

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

2. The Harland Group Limited, 100%-owned U.K.
subsidiary.

a. Harland Machine Systems Ltd., 100%-owned U.K.
subsidiary.

b. Harland France SARL, 100%-owned French subsidiary.

c. Harlands of America, Inc., 100%-owned subsidiary,
incorporated in the State of Delaware.

c. Sonoco Deutschland Holdings GmbH, 100%-owned German
subsidiary.

1. Sonoco Deutschland GmbH, 100%-owned German subsidiary.

2. Sonoco Plastics GmbH, 100%-owned German subsidiary.

3. Sonoco IPD GmbH, 100%-owned German subsidiary.

a. Sonoco MBS GmbH, 100%-owned subsidiary.

b. OPV Oberrhein GmbH, 100%-owned German subsidiary.

c. Sonoco MBS GmbH and Company, 100%-owned German
partnership.

d. OPV Textihulsen GmbH, 100%-owned German partnership.

4. Caprex AG, 72%-owned Swiss subsidiary.

d. Sonoco SNC, 100%-owned French partnership with the
following subsidiaries and affiliate:

1. Sonoco Holdings, 100%-owned French subsidiary.

a. Sonoco Lhomme S.A., 100%-owned French subsidiary.

1. Sonoco Eurocore, Belgium, 100%-owned Belgian
subsidiary.

2. Papeteries Du Rhin, 47%-owned French affiliate.

b. Sonoco Consumer Products S.A., 100%-owned French
subsidiary.

e. Sonoco Italia S.R.L., 100%-owned Italian subsidiary.

f. Sonoco Asia, L.L.C., 90.9%-owned limited liability company.

<PAGE> 4

EXHIBIT (21)

SONOCO PRODUCTS COMPANY AND CONSOLIDATED SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

1. Sonoco Singapore Pte, Ltd., 100%-owned Singapore subsidiary.

a. Sonoco Malaysia, SDN BHD, 100%-owned Malaysian subsidiary.

2. Sonoco Taiwan Limited, 100%-owned Republic of China subsidiary.

3. Sonoco Thailand Ltd., 70%-owned Thai subsidiary.

g. Sonoco Asia Management Company, L.L.C., 70%-owned limited liability
company.

<PAGE> 1

EXHIBIT (23)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference into the registration statements
of Sonoco Products Company on Form S-8 (filed September 9, 1985, June 3, 1988,
November 28, 1989, February 6, 1992, November 22, 1993 and June 7, 1995) and
Form S-3 (filed June 6, 1991, File No. 33-40538; filed October 4, 1993, File
No. 33-50501 as amended; filed October 4, 1993, File No. 33-50503 as amended)
of our report dated January 31, 1996, on our audits of the consolidated
financial statements and financial statement schedule of Sonoco Products
Company as of December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, which report is included in this Annual
Report on Form 10-K.

/s/ Coopers & Lybrand L.L.P.
--------------------------------
COOPERS & LYBRAND L.L.P.
Charlotte, North Carolina
March 27, 1996

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SONOCO PRODUCTS COMPANY FOR THE YEARS ENDED DECEMBER 31,
1995 AND DECEMBER 31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 27,300 26,674
<SECURITIES> 34,324 1,770
<RECEIVABLES> 318,765 276,044
<ALLOWANCES> 6,330 6,058
<INVENTORY> 231,476 207,662
<CURRENT-ASSETS> 661,783 570,711
<PP&E> 1,609,247 1,411,524
<DEPRECIATION> 743,618 648,415
<TOTAL-ASSETS> 2,115,413 1,835,053
<CURRENT-LIABILITIES> 432,455 348,643
<BONDS> 591,894 487,959
0 0
172,500 172,500
<COMMON> 7,175 7,175
<OTHER-SE> 739,074 652,543
<TOTAL-LIABILITY-AND-EQUITY> 2,115,413 1,835,053
<SALES> 2,706,173 2,300,127
<TOTAL-REVENUES> 2,706,173 2,300,127
<CGS> 2,106,987 1,803,427
<TOTAL-COSTS> 2,106,987 1,803,427
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 3,168 2,546
<INTEREST-EXPENSE> 44,004 35,861
<INCOME-PRETAX> 270,790 210,930
<INCOME-TAX> 106,640 82,500
<INCOME-CONTINUING> 164,519 129,849
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 164,519 129,849
<EPS-PRIMARY> $1.72 $1.34
<EPS-DILUTED> $1.64 $1.31

</TABLE>

<PAGE> 1

[SONOCO(R)]

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160 U.S.A.

March 15, 1996

TO OUR SHAREHOLDERS:

As a shareholder of Sonoco Products Company, you are cordially invited to
attend the Annual Shareholders' Meeting to be held at the Center Theater, 212
North Fifth Street, Hartsville, South Carolina, 29550, on Wednesday, April 17,
1996, at 11:00 A.M.

The accompanying Notice of Meeting and Proxy Statement cover the details of
matters to be presented at the meeting which consists of the election of
directors, a proposal to approve the 1996 Non-Employee Directors' Stock Plan,
and the election of independent auditors.

In addition to action to be taken on the matters listed in the Notice of
Annual Meeting of Shareholders, the Company's progress will be discussed, and
attendees will be given an opportunity to ask questions of general interest to
all shareholders.

A copy of the 1995 Annual Report, which reviews the Company's past year's
events, is enclosed unless you have signed a statement indicating that you have
access to another copy at your address.

Whether or not you plan to attend the meeting, you are urged to participate
by completing and returning your proxy in the enclosed business reply envelope.
If you later find you can be present or for any reason desire to revoke your
proxy, you can do so at any time before the voting. Your vote is important and
will be greatly appreciated.

/s/ Charles W. Coker
Charles W. Coker
Chairman and Chief Executive Officer
<PAGE> 2

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

<TABLE>
<S> <C>
TIME.......................... 11:00 A.M. on Wednesday, April 17, 1996.
PLACE......................... The Center Theater, 212 North Fifth Street, Hartsville, South
Carolina, 29550.
PURPOSES...................... (1) To elect six members of the Board of Directors, five to
serve for the next three years and one to serve for the next
year.
(2) To act upon a proposal to approve the 1996 Non-Employee
Directors' Stock Plan.
(3) To elect independent auditors.
(4) To transact such other business as may properly come
before the meeting or any adjournment thereof.
RECORD DATE................... Holders of Common Stock of record at the close of business
March 1, 1996, are entitled to notice of and to vote at the
meeting.
ANNUAL REPORT................. The Annual Report of the Company for the year 1995 is
enclosed unless you have signed a statement indicating that
you have access to another copy at your address.
PROXY VOTING.................. It is important that your shares be represented and voted at
the meeting. Please MARK, SIGN, DATE, and RETURN PROMPTLY the
enclosed proxy card in the envelope furnished. Any proxy so
given can be revoked in the manner described in the
accompanying Proxy Statement at any time prior to its
exercise at the meeting.
</TABLE>

By order of the Board of Directors,

Charles J. Hupfer, Secretary

March 15, 1996

1
<PAGE> 3

SONOCO PRODUCTS COMPANY

POST OFFICE BOX 160
ONE NORTH SECOND STREET
HARTSVILLE, SOUTH CAROLINA 29551-0160

PROXY STATEMENT

GENERAL INFORMATION

INFORMATION CONCERNING THE SOLICITATION

This statement is furnished in connection with the solicitation of proxies
to be used at the Annual Meeting of Shareholders (Annual Meeting) of Sonoco
Products Company (the "Company"), a South Carolina corporation, to be held on
April 17, 1996.

The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Company.

The cost of preparing, assembling and mailing the proxy material and of
reimbursing brokers, nominees and fiduciaries for the out-of-pocket and clerical
expense of transmitting copies of the proxy material to the beneficial owners of
shares held of record by such persons will be borne by the Company. The Company
does not intend to solicit proxies otherwise than by use of the mail; however,
certain officers and regular employees of the Company or its subsidiaries,
without additional compensation, may use their personal efforts by telephone,
telefacsimile or by personal calls to obtain proxies.

The proxy materials are being mailed on March 15, 1996, to shareholders of
record at the close of business on March 1, 1996.

Any shareholder who executes and delivers a proxy has the right to revoke
it at any time before it is voted. The proxy can be revoked by giving notice of
revocation at the Annual Meeting, or by delivery to the Secretary of the
Company, Post Office Box 160, Hartsville, South Carolina, 29551-0160, of an
instrument which by its terms revokes the proxy, or by delivery to the Secretary
of a duly executed proxy bearing a later date. Any shareholder who desires to do
so can attend the meeting and vote in person in which case the proxy will not be
used.

Shares represented by all properly executed proxies delivered pursuant to
this solicitation will be voted at the Annual Meeting or any adjournment
thereof. With respect to the election of directors and to any of the proposals
for which a choice is provided, the proxy will be voted in the manner directed
by the shareholder. If no direction is made, the proxy will be voted FOR the
persons named in this Proxy Statement as the Board of Directors' nominees for
election to the Board of Directors; FOR the adoption of the 1996 Non-Employee
Directors' Stock Plan; and FOR the election of Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year ending December 31, 1996. As
to any other matter of business that may be brought before the Annual Meeting, a
vote may be cast pursuant to the accompanying proxy in accordance with the

2
<PAGE> 4

best judgment of the persons holding the proxy, but the Board of Directors
presently does not know of any other such business.

OUTSTANDING SECURITIES

The Company has authorized two classes of stock consisting of 150,000,000
authorized shares of no par value Common Stock, of which 91,167,620 shares are
outstanding and 30,000,000 authorized shares of no par value Preferred Stock of
which 3,450,000 shares of $2.25 Series A Cumulative Convertible Preferred Stock
are outstanding. Each share of the Company's Common Stock is entitled to one
vote. The shareholders of the Company's $2.25 Series A Cumulative Convertible
Preferred Stock will not be entitled to vote at the Annual Meeting.

VOTING SECURITIES

Only shareholders of record of the Company's Common Stock at the close of
business on March 1, 1996, will be entitled to vote at the Annual Meeting. As of
that date there were issued and outstanding 91,167,620 shares of Common Stock.
Each share will be entitled to one vote on each matter submitted at the Annual
Meeting.

A majority of the shares entitled to be voted at the Annual Meeting
constitutes a quorum. If a share is represented for any purpose at the Annual
Meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" and shares that are not voted, including proxies submitted by brokers
that are the record owners of shares (so-called "broker non-votes"), will be
included in determining the number of votes present or represented at the Annual
Meeting.

If a quorum is present at the Annual Meeting, directors will be elected by
a plurality of the votes cast by shares present and entitled to vote at the
Annual Meeting. Votes that are withheld or that are not voted in the election of
directors will have no effect on the outcome of election of directors.
Cumulative voting is not permitted.

Approval of the proposal to adopt the 1996 Non-Employee Directors' Stock
Plan requires the affirmative vote of a simple majority of the total shares
present and entitled to vote at the Annual Meeting. With respect to shares that
are present and entitled to vote, votes that are withheld or shares that are not
voted for adoption of the plan will have the effect of votes against the plan.

Election of Coopers & Lybrand L.L.P., as independent auditors, and approval
of any other matter that may be brought before the meeting require that the
votes cast in favor of the matter exceed the votes cast against the matter.
Votes that are withheld or shares that are not voted will have no effect on the
outcome of such matters.

There is no person known by the management of the Company to own of record
or beneficially more than 5% of the outstanding voting shares of the Company.

3
<PAGE> 5

ELECTION OF DIRECTORS

At this Annual Meeting six directors are to be elected, five of whom shall
hold office for the next three years, their terms expiring at the Annual
Shareholders' Meeting in 1999, and one of whom shall hold office for the next
year, her term expiring at the Annual Shareholders' Meeting in 1997, or until
their successors are duly elected and qualified. It is the intention of the
persons named on the enclosed form of proxy to vote such proxy FOR the election
of the six persons named herein (or if any of the persons nominated is
unexpectedly unavailable to serve, for such substitutions as the Board of
Directors may designate), unless authority to vote is withheld for all or any of
the nominees. Proxies will not be voted for a greater number of persons than the
number of nominees named. Each nominee has been recommended for election by the
Board of Directors.

INFORMATION CONCERNING NOMINEES

<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- C. J. BRADSHAW (59). Mr. Bradshaw is President and 1986
- ----------------- Director of Bradshaw Investments, Inc. (private
- ----------------- investments), Georgetown, South Carolina, a position held
[PHOTO] since 1986. He served as President and Chief Operating
- ----------------- Officer of Transworld Corporation, New York, New York,
- ----------------- from 1984 to 1986 and Chairman of the Board and Chief
- ----------------- Executive Officer of Spartan Food Systems, Inc.,
- ----------------- Spartanburg, South Carolina, from 1961 to 1986. Mr.
Bradshaw is a director of Wachovia Bank of South Carolina,
N.A.
- ----------------- R. J. BROWN (61). Mr. Brown is Founder, Chairman and Chief 1993
- ----------------- Executive Officer of B&C Associates, Inc. (a management
- ----------------- consulting, marketing research and public relations firm),
[PHOTO] High Point, North Carolina, a position held since 1973. He
- ----------------- is a director of First Union Corporation, Duke Power
- ----------------- Company and Pacific National Financial Group.
- -----------------
- -----------------
</TABLE>

4
<PAGE> 6

- ----------------- PAUL FULTON (61). Mr. Fulton is Dean of The Kenan-Flagler 1989
- ----------------- Business School, The University of North Carolina, Chapel
- ----------------- Hill, North Carolina, a position held since 1994. He was
[PHOTO] President of Sara Lee Corporation (manufacturer and
- ----------------- marketer of consumer products), Chicago, Illinois, from
- ----------------- 1988 through 1993. He served as Executive Vice President
- ----------------- from 1987 to 1988 and as Senior Vice President of Sara Lee
- ----------------- Corporation and President of the Hanes Group of Sara Lee
Corporation from 1981 to 1986. Mr. Fulton is a director of
NationsBank Corporation, Bassett Furniture Industries,
Inc., Cato Corporation and Winston Hotels, Inc.

- ----------------- H. L. MCCOLL, JR. (60). Mr. McColl is Chairman of the 1972
- ----------------- Board and Chief Executive Officer and Director of
- ----------------- NationsBank Corporation, Charlotte, North Carolina, and
- ----------------- Chief Executive Officer of each of its subsidiary banks.
[PHOTO] He has served as Chief Executive Officer of NationsBank
- ----------------- Corporation since 1983. He is a director of CSX
- ----------------- Corporation, Ruddick Corporation, Jefferson-Pilot
- ----------------- Corporation and Jefferson-Pilot Life Insurance Company.
</TABLE>

- ---------------

* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker and of P. C. Coggeshall, Jr., an executive officer of the Company.

5
<PAGE> 7

All nominees previously have been elected to the Board of Directors by the
Common Shareholders except Mrs. Young.

At its meeting on October 18, 1995, the Board of Directors decided it was
in the best interest of the Company to increase the size of the Board of
Directors from seventeen to eighteen; and pursuant to Article III, Section 1, of
the By-Laws of the Company, amendment of which was approved by the shareholders
at their Annual Meeting in 1994, the Board fixed the number of directors of the
corporation at eighteen.

Mrs. Young was elected by the Board of Directors at its October 18, 1995,
meeting, and has been nominated for election by the shareholders at this Annual
Meeting, to serve a one-year term which will expire at the Annual Shareholders'
Meeting in 1997. Although Mrs. Young has been nominated for election at the 1996
Annual Meeting to serve only a one-year term, which will expire in 1997, it
presently is anticipated that she will be nominated by the Board of Directors
for election at the 1997 Annual Meeting to serve an additional three-year term,
which will expire in 2000. Mrs. Young's terms are being bifurcated in this
manner to cause the distribution of directors among the three classes to be as
nearly equal as possible in future years, as required by South Carolina
corporate law and the Company's By-Laws. The Nominating Committee of the Board
of Directors recommends Mrs. Young for election by the Common Shareholders.

The Nominating Committee recommends to the Board of Directors nominees to
fill vacancies on the Board as they occur and recommends candidates for election
as directors at Annual Meetings of Shareholders. The committee will consider
persons recommended to be nominees by shareholders upon submission in writing to
the Nominating Committee of the Company of the names of such persons, together
with their qualifications for service and evidence of their willingness to
serve. The Company's Restated Articles of Incorporation require that nominations
for any person who is not then a director of the Company, whether made by the
Nominating Committee or any shareholder, be submitted to the Secretary not less
than sixty days prior to the Annual Meeting for which such nominations are made.

6
<PAGE> 8

Members of the Board of Directors whose terms of office will continue until
the Annual Shareholders' Meeting in 1997 are:

- ----------------- A. T. DICKSON (64). Mr. Dickson is President and Director 1981
- ----------------- of Ruddick Corporation (a diversified holding company),
[PHOTO] Charlotte, North Carolina, a position held since 1968. He
- ----------------- is a director of Lance, Inc., NationsBank Corporation and
- ----------------- Bassett Furniture Industries, Inc.

- ----------------- R. E. ELBERSON (67). Mr. Elberson is a retired executive 1985
- ----------------- officer and director of Sara Lee Corporation (manufacturer
- ----------------- and marketer of consumer products), Chicago, Illinois. He
[PHOTO] served as Vice Chairman of Sara Lee Corporation from 1986
- ----------------- to 1989 and as President and Chief Operating Officer from
- ----------------- 1983 to 1986. Mr. Elberson is a director of W. W.
- ----------------- Grainger, Inc.
- -----------------
</TABLE>

- ---------------

* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker and of P.C. Coggeshall, Jr., an executive officer of the Company.

7
<PAGE> 9

- ----------------- R. C. KING, JR. (61). Mr. King is an independent 1991
- ----------------- consultant. Until his retirement from the Company in 1994,
[PHOTO] he was President and Chief Operating Officer, a position
- ----------------- held since 1990. He served as Senior Vice President from
- ----------------- 1987 to 1990. He is a director of United Dominion
- ----------------- Industries.
</TABLE>

Members of the Board of Directors whose terms of office will continue until the
Annual Shareholders' Meeting in 1998 are:

<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- LEO BENATAR (66). Mr. Benatar is Senior Vice President of 1993
- ----------------- the Company, a position held since 1993, and Chairman of
- ----------------- Engraph, Inc. (printer and fabricator of roll labels,
[PHOTO] decals, and specialty paperboard items), Atlanta, Georgia,
- ----------------- a position held since 1981. He also was Chief Executive
- ----------------- Officer of Engraph, Inc. from 1981 to 1995. Engraph, Inc.
- ----------------- became a wholly-owned subsidiary of the Company on October
- ----------------- 21, 1993. He was President of Mead Packaging, a division
of the Mead Corporation, from 1972 to 1981. Mr. Benatar is
a director of Interstate Bakeries Corporation, Aaron
Rents, Inc., Mohawk Industries, Inc. and Riverwood
International Corporation, and is past Chairman of the
Federal Reserve Bank of Atlanta. Mr. Benatar has announced
his intention to retire from the Company in the spring of
1996.
</TABLE>

8
<PAGE> 10

<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- P. C. BROWNING (54). Mr. Browning is President and Chief 1995
- ----------------- Operating Officer of the Company, a position held since
- ----------------- February 1996. He was Executive Vice President of the
[PHOTO] Company from 1993 to 1996. He served as President,
- ----------------- Chairman and Chief Executive Officer of National Gypsum
- ----------------- Company (manufacturer and supplier of products and
- ----------------- services used in building and construction), Charlotte,
- ----------------- North Carolina, from 1990 to 1993 and as President-Gold
Bond Division, National Gypsum Company, from 1989 to 1990.
Prior to 1989 he spent twenty-four years with Continental
Can Company, serving as President of Continental's
Bondware and White Cap Divisions and later as the
company's Executive Vice President. Mr. Browning is a
director of Phoenix Home Life Mutual Insurance Company,
Loctite Corporation and First Union National Bank of South
Carolina.

- ----------------- *F. L. H. COKER (60). Mr. Coker is retired. He was 1964
- ----------------- President and Director of Sea Corporation of Myrtle Beach,
- ----------------- Inc. (private investments), Myrtle Beach, South Carolina,
[PHOTO] from 1983 to 1989. Until his retirement from the Company
- ----------------- in 1979, Mr. Coker was Senior Vice President, a position
- ----------------- held since 1976.

- ----------------- T. C. COXE, III (65). Mr. Coxe retired on February 29, 1982
- ----------------- 1996. He was Senior Executive Vice President of the
[PHOTO] Company from 1993 to 1996 and was Executive Vice President
- ----------------- from 1985 to 1993. He is a director of Wachovia Bank of
- ----------------- South Carolina, N.A.
</TABLE>

- ---------------

* C. W. Coker and F. L. H. Coker are brothers and are first cousins of J. L.
Coker and of P.C. Coggeshall, Jr., an executive officer of the Company.

9
<PAGE> 11

<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION FOR LAST FIVE SERVED AS A
YEARS AND DIRECTORSHIPS IN PUBLIC CORPORATIONS DIRECTOR SINCE
---------------------------------------------------------- --------------
<C> <S> <C>
- ----------------- B. L. M. KASRIEL (49). Mr. Kasriel is Vice Chairman and 1995
- ----------------- Chief Operating Officer of Lafarge (a construction
- ----------------- materials group), Paris, France, a position held since
[PHOTO] January 1995. He served as Managing Director of Lafarge
- ----------------- Coppee from 1989 to 1994 and as Senior Executive Vice
- ----------------- President from 1987 to 1989. Mr. Kasriel temporarily was
- ----------------- detached to National Gypsum Company, Charlotte, North
- ----------------- Carolina, as President and Chief Operating Officer from
1987 to 1989. He served as Executive Vice President of
Lafarge Coppee from 1984 to 1987. Mr. Kasriel is a
director of Lafarge and Lafarge Corporation.

- ----------------- E. H. LAWTON, JR. (66). Mr. Lawton is President and 1968
- ----------------- Director of Hartsville Oil Mill (vegetable oils
[PHOTO] processor), Darlington, South Carolina, a position held
- ----------------- since 1962. He is a director of NationsBank, N.A.,
- ----------------- formerly NationsBank, N.A. (Carolinas).

- ----------------- E. C. WALL, JR. (58). Mr. Wall is President and Director 1976
- ----------------- of Canal Industries (forest products), Conway, South
[PHOTO] Carolina, a position held since 1969. He is a director of
- ----------------- Ruddick Corporation, SCANA Corporation, NationsBank
- ----------------- Corporation and Blue Cross-Blue Shield of South Carolina.
</TABLE>

10
<PAGE> 12

BOARD COMMITTEES

During 1995 the Board of Directors held four regularly scheduled meetings
and one special meeting to review significant developments affecting the Company
and to act on matters requiring Board approval. To assist it in the discharge of
its responsibilities, the Board has established four committees:

<TABLE>
<CAPTION>
NUMBER OF
COMMITTEE CURRENT 1995
NAME PURPOSE MEMBERS MEETINGS
- ----------------- --------------------------------------- -------------------- ----------
<S> <C> <C> <C>
Audit Committee Responsible for the scope of both E. C. Wall, Jr. -- 2
internal and external audit programs in Chairman
order to fully protect assets of the R. J. Brown
Company. A. T. Dickson
J. C. Fort
R. C. King, Jr.
B. L. M. Kasriel
D. D. Young
Executive Responsible for establishing and A. T. Dickson -- 5
Compensation maintaining officer-level salaries and Chairman
Committee administering executive compensation C. J. Bradshaw
plans. R. E. Elberson
Paul Fulton
B. L. M. Kasriel
E. H. Lawton, Jr.
D. D. Young
Nominating Responsible for recommending to the F. L. H. Coker -- 2
Committee directors qualified candidates to fill Chairman
vacancies on the Board. J. L. Coker
R. E. Elberson
J. C. Fort
E. H. Lawton, Jr.
H. L. McColl, Jr.
Finance Committee Responsible for evaluating the H. L. McColl, Jr. -- 2
Company's financial status, advising Chairman
corporate management and the full Board R. J. Brown
on financial matters, and reviewing the F. L. H. Coker
Company's long-term financial J. L. Coker
requirements and plans. A. T. Dickson
Paul Fulton
R. C. King, Jr.
E. C. Wall, Jr.
</TABLE>

During 1995 all directors attended 75% or more of the aggregate number of
meetings of the Board and committees except Mr. F. L. H. Coker who attended 67%.

11
<PAGE> 13

SECURITY OWNERSHIP OF MANAGEMENT AS OF DECEMBER 31, 1995

<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
--------------------------
NAME POSITION NUMBER(1) PERCENTAGE(2)
- --------------------- ------------------------------------------------ --------- -------------
<S> <C> <C> <C>
C. J. Bradshaw Director 22,659
R. J. Brown Director 1,438
F. L. H. Coker Director 1,204,831 1.3
J. L. Coker Director 292,048
A. T. Dickson Director 62,596
R. E. Elberson Director 26,150
J. C. Fort Director 1,172,399 1.3
Paul Fulton Director 7,560
B. L. M. Kasriel Director 105
R. C. King, Jr. Director 285,955
E. H. Lawton, Jr. Director 737,269(3)
H. L. McColl, Jr. Director 18,207
E. C. Wall, Jr. Director 86,824
D. D. Young Director 300
C. W. Coker Chairman, President, Chief Executive Officer 1,515,159 1.7
and Director
P. C. Browning Executive Vice President and Director 226,400
T. C. Coxe, III Senior Executive Vice President and Director 348,716
Leo Benatar Senior Vice President and Director 188,813
H. E. DeLoach, Jr. Group Vice President 510,092(4)
All Executive Officers and Directors (28 persons) 7,839,792(5) 8.6
</TABLE>

- ---------------

(1) Shareholdings represent the number of shares beneficially owned directly or
indirectly by each named director and executive officer as of December 31,
1995. The number includes shares subject to currently exercisable options,
granted by the Company under the 1983 Key Employee Stock Option Plan (the
"1983 Plan") and the 1991 Key Employee Stock Plan (the "1991 Plan"), for
the following directors and named executive officers: C. W.
Coker -- 460,035; P. C. Browning -- 223,965; T. C. Coxe, III -- 94,755; Leo
Benatar -- 156,924; H. E. DeLoach, Jr. -- 120,015; and R. C. King,
Jr. -- 216,510. Shareholdings do not include Restricted Stock Rights, which
begin to vest in 1997, granted under the 1991 Plan for the following named
executive officers: C. W. Coker -- 86,547; P. C. Browning -- 64,911; and H.
E. DeLoach, Jr. -- 43,274. Shareholdings also do not include 21,637 shares
of Restricted Stock Rights granted to T.C. Coxe, III and 21,637 shares of
Restricted Stock Rights granted to Leo Benatar under the 1991 Plan, which
will fully vest in October 1996.

12
<PAGE> 14

Also included are shares held in the Company's Dividend Reinvestment Plan
(1,606), the Employee Savings and Stock Ownership Plan (47,995), and share
equivalents in deferred compensation plans (41,227).

(2) Percentages not shown are less than 1%.

(3) Includes 636,027 shares of Common Stock owned by trusts for which Mr. Lawton
is trustee. Mr. Lawton disclaims beneficial ownership of such shares.

(4) Includes 330,118 shares of Common Stock owned by trusts and an estate for
which Mr. DeLoach is trustee and executor, respectively. Mr. DeLoach
disclaims beneficial ownership of such shares.

(5) Includes 2,093,081 shares of Common Stock which the executive officers and
two directors have a right to acquire pursuant to options granted by the
Company under the 1983 and 1991 Plans.

13
<PAGE> 15

EXECUTIVE COMPENSATION COMMITTEE'S REPORT TO SHAREHOLDERS

The Executive Compensation Committee of the Board of Directors (the
"Committee") is responsible for setting the remuneration levels for executives
of the Company. It also oversees the Company's various executive compensation
plans, as well as the overall management compensation program. Additionally, the
Committee reviews and plans for top management succession and reviews executive
job performance. The Committee periodically evaluates the Company's executive
compensation program in terms of appropriateness, including competitive
positioning relative to other companies' practices. The Committee obtains
independent and impartial advice from external compensation consulting firms in
order to maintain objectivity in executing its responsibilities. The Committee
met five times during 1995, and had met once in 1996 as of the printing of this
report.

PHILOSOPHY

The executive compensation program has been designed to attract, motivate,
reward, and retain senior management by providing competitive total compensation
opportunities based on performance, teamwork, and the creation of shareholder
value. The basic program consists of salary, annual cash bonus awards, annual
stock option awards, perquisites, and employee benefits.

In order to determine competitive compensation levels, the Company
participates in a number of surveys conducted by independent consulting firms,
and from time to time contracts with these firms to perform customized studies
of companies in its industry groups and/or with companies showing similar
long-term financial performance results. In these surveys executive compensation
levels are developed by looking at large numbers of similar positions across
American industry and reflect adjustments based upon company revenues. The Dow
Jones Containers and Packaging Group Index, which includes the Company, was used
in the five-year shareholder return performance graph that appears on Page 17.
The companies in this Index also are included, as available, among the companies
whose survey data is used in the Company's compensation studies.

The total compensation package for executives is generally structured to be
competitive with the median total pay practices for executives of other large
corporations. The base salary midpoints are targeted to be at the median of
surveyed market rates. Incentive compensation, consisting of the annual cash
bonus plan and the annual stock option awards, is targeted at the median of
surveyed market compensation for expected Company performance, and provides
opportunities to motivate and reward executives for exceptional performance.
Executive perquisites are limited and provide a lower benefit than the market
median. The benefits program for executives provides a benefit that is somewhat
higher than the market median. This benefits program, in particular the
retirement and life insurance plans, is designed to enhance retention of
executives until normal retirement age.

Following is a discussion of the elements of the executive compensation
program, along with a description of the decisions and actions taken by the
Committee with regard to 1995 compensation. Also included is a specific
discussion of the decisions regarding Mr. Coker's compensation for performing
the duties of Chairman, President and Chief Executive Officer ("CEO"). The
tables and accompanying narrative and footnotes which follow this report reflect
the decisions covered by the discussions below.

14
<PAGE> 16

SALARY

The Company's salary ranges and resulting salaries are based on a relative
valuing of the duties and responsibilities of each position. The Company reviews
the base salaries of all salaried employees on an annual basis.

Merit salary increases are based on a table which considers each
individual's performance rating and position in his or her salary range.
Promotional salary increases are awarded to recognize increased responsibilities
and accountabilities. The Committee used this table to determine salary
adjustments for each of the executive officers, including Mr. Coker, whose most
recent increase was effective June 1, 1995.

ANNUAL BONUS AWARDS

The Company has a bonus plan which provided for cash incentive
opportunities for 1995, based upon achievement of pre-determined annual
financial performance goals, as well as attainment of key individual strategic
and operational objectives. The purpose of this plan is to link a significant
portion of executive pay to both the Company's operating performance for the
year and to critical issues affecting the long-term health of the Company. The
Incentive Compensation Terms that were utilized for Messrs. Coker and Browning
were based solely on operating performance measured in earnings per share (EPS),
and were designed to obtain tax deductibility for their resulting annual
incentive compensation payments.

Financial performance goals were weighted from 73% to 100% of total bonus
opportunity. For executives with corporate responsibility, including the Group
Vice Presidents, the plan's financial goals were based on corporate EPS from
ongoing operations. For executives with business unit responsibility, one half
of the bonus opportunity available for financial performance was based on
corporate EPS and the remainder was based on business unit profit before
interest and taxes.

The key strategic and operational objectives for 1995, which were weighted
from 0% to 27% of total bonus opportunity, varied by individual and were in
areas such as employee safety, Vision 2000, customer satisfaction, business
development, strategic acquisitions, technology innovation, management
succession and employee development, process improvement, total quality
management, and environmental protection.

On February 6, 1996, the Committee reviewed and approved the 1995 annual
bonus awards for executive officers. Initial bonus amounts were assigned to each
executive officer (except Messrs. Coker and Browning) based on the scoring of
financial goal attainment and subjective evaluations of how well the
personalized objectives were met. In some cases the Committee used additional
discretion based on its assessment of individual performance and internal equity
in the determination of final bonus amounts. Mr. Coker's bonus, which reflects
the Committee's assessment of his contribution and efforts in 1995, is included
among the values listed under the "Bonus" caption in the Summary Compensation
Table on Page 18. In setting the amount, the Committee considered, in addition
to the record level of EPS, his performance in leading the Company and his role
in establishing strategic initiatives and implementing operational tactics. The
amount of Mr. Coker's bonus was less than the maximum that could have been paid
under the EPS schedule adopted for him by the Committee in early 1995. Mr.
Browning's bonus award also was determined in the same manner as Mr. Coker's
bonus award.

15
<PAGE> 17

STOCK OPTIONS

In 1995 Mr. Coker, the executive officers, and other key management
employees were granted options to purchase shares of Common Stock by the
Committee under a plan which previously had been approved by the Company's
shareholders. The price of these options was set at the prevailing market price
on the date the options were awarded. Accordingly, these options will be
valuable to the recipients only if the market price of Company stock increases.
Stock option awards and annual cash bonus opportunities are the Company's
performance-based compensation elements. The level of the combined award
opportunities, including Mr. Coker's, reflects median competitive total annual
incentive compensation opportunities as reported by the independent consulting
firms. Stock option awards for Mr. Coker and the other four named officers are
included in the Summary Compensation Table on Page 18 under the caption "Number
of Securities Underlying Options Granted" and in the Option Grants Table on Page
20.

OTHER

As a result of recent changes to tax law, companies cannot deduct certain
types of compensation paid to the CEO or to the other executive officers named
in the Summary Compensation Table for individual amounts in excess of one
million dollars unless such compensation is approved by the shareholders and
meets certain other requirements. In 1995 shareholders approved Annual Incentive
Compensation Terms for Executive Officers and ratified amendments to the
Company's 1991 Key Employee Stock Plan. These actions were intended to ensure
tax deductibility of all executive compensation payments in 1995 and in future
years based on current regulations.

A.T. Dickson (Chairman) C.J. Bradshaw R. E. Elberson
P. Fulton B.L.M. Kasriel E.H. Lawton, Jr. D.D. Young

16
<PAGE> 18

COMPARATIVE COMPANY PERFORMANCE

The following line graph compares cumulative total shareholder return for
the Company with the cumulative total return of the S&P 500 Stock Index and a
nationally recognized industry index, the Dow Jones Containers and Packaging
Group (which includes the Company), from December 31, 1990, through December 31,
1995.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SONOCO PRODUCTS COMPANY, THE S&P 500 STOCK INDEX,
AND THE DOW JONES CONTAINERS & PACKAGING GROUP**

<TABLE>
<CAPTION>
DOW JONES
CONTAINERS &
MEASUREMENT PERIOD S&P 500 STOCK PACKAGING SONOCO PRODUCTS
(FISCAL YEAR COVERED) INDEX GROUP COMPANY
<S> <C> <C> <C>
1990 100 100 100
1991 130 157 109
1992 140 172 154
1993 155 164 146
1994 157 163 148
1995 215 176 192
</TABLE>

ASSUMES $100 INVESTED ON DECEMBER 31, 1990, IN SONOCO PRODUCTS COMPANY COMMON
STOCK, THE S&P 500 STOCK INDEX, AND THE DOW JONES CONTAINERS & PACKAGING GROUP.

* TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
** FISCAL YEAR ENDING DECEMBER 31

17
<PAGE> 19

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS
-----------------------
NUMBER OF
ANNUAL SECURITIES PAYOUTS
COMPENSATION(2) RESTRICTED UNDERLYING ----------
NAME AND PRINCIPAL --------------------- STOCK OPTIONS LTIP ALL OTHER
POSITION YEAR SALARY BONUS RIGHTS(3) GRANTED(4) PAYOUTS(5) COMPENSATION(6)
- --------------------- ---- -------- ---------- ---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. W. Coker 1995 $634,169 $1,000,000 $ -0- 79,275 $ -0- $ 229,571
Chairman, President 1994 602,835 691,416 1,820,000 66,360 -0- 205,936
and Chief Executive 1993 575,834 451,567 -0- 65,100 -0- 184,233
Officer
P. C. Browning 1995 466,791 600,000 -0- 40,215 -0- 92,309
Executive Vice 1994 449,759 360,241 1,365,000 26,250 -0- 56,228
President 1993 73,666 221,000 -0- 157,500 -0- 55,366
T. C. Coxe, III 1995 353,790 450,000 -0- 36,330 -0- 79,771
Senior Executive 1994 340,891 324,109 455,000 30,450 -0- 62,813
Vice President 1993 316,668 200,999 -0- 27,930 -0- 48,975
L. Benatar(1) 1995 380,100 380,100 -0- 23,835 -0- 91,294
Senior Vice 1994 368,579 230,000 455,000 21,000 -0- 87,078
President 1993 360,818 169,106 -0- -0- 55,200 13,832
H. E. DeLoach, Jr. 1995 309,585 340,415 -0- 23,835 -0- 56,647
Group Vice 1994 259,586 230,512 910,000 21,000 -0- 41,422
President 1993 220,351 172,690 -0- 13,230 -0- 25,398
</TABLE>

- ---------------

(1) Includes amounts paid by Engraph, Inc. for services as Chairman and CEO for
the period from January 1, 1993, through October 21, 1993, the date that
Engraph, Inc. merged with the Company.

(2) None of the executive officers received perquisites or personal benefits
which totaled the lesser of $50,000 or 10% of their respective salary plus
bonus payments.

(3) Dollar amounts shown equal the number of units of restricted stock rights
granted multiplied by the $22.75 per share stock price on October 21, 1994,
the date of grant. The number and dollar value of restricted stock rights
held, including dividend equivalents, adjusted for the 1995 stock dividend,
based on the closing stock price on December 31, 1995, of $26.25 per share
were: C. W. Coker -- 86,547 shares ($2,271,859); P. C. Browning -- 64,911
shares ($1,703,914); T. C. Coxe, III -- 21,637 shares ($567,971); L.
Benatar -- 21,637 shares ($567,971); and H. E. DeLoach, Jr. -- 43,274 shares
($1,135,943). Restrictions lapse over a five-year vesting period for Messrs.
Coker, Browning, and DeLoach with one-third of the shares vesting on each of
the third, fourth, and fifth anniversary dates of the grant. The
restrictions lapse and all shares vest for Messrs. Coxe and Benatar in
October 1996.

(4) Number of securities adjusted for the 5% stock dividend paid June 9, 1995.

18
<PAGE> 20

(5) This award was pursuant to the Engraph Long Range Incentive Plan for the
1991-1993 performance period. There are no other potential payment
obligations under this plan.

(6) All other compensation for 1995 consisted of the following components:

<TABLE>
<CAPTION>
COMPANY CONTRIBUTIONS AND
SPLIT-DOLLAR ABOVE-MARKET DEFERRED ACCRUALS TO DEFINED CONTRIBUTION
NAME LIFE INSURANCE COMPENSATION ACCRUALS(2) RETIREMENT PLANS
- ------------------- -------------- ------------------------ --------------------------------
<S> <C> <C> <C>
C. W. Coker $145,110(1) $ 44,693 $ 39,768(3)
P. C. Browning 67,498 -0- 24,811(3)
T. C. Coxe, III 26,498 32,936 20,337(3)
L. Benatar 81,544 -0- 9,750(4)
H. E. DeLoach, Jr. 28,553 11,885 16,209(3)
</TABLE>

---------------

(1) Includes additional insurance which was purchased for Mr. Coker during
December 1992 in exchange for cancellation of stock options that, at
the time of the transaction, had a market price gain of $497,875.

(2) Represents the above-market portion of interest credits on
previously-earned compensation for which payment has been deferred.

(3) Comprised of contributions to the Company's Employee Savings and Stock
Ownership Plan (ESSOP) and accruals to individual accounts in the
Company's non-qualified benefits restoration plan, in order to keep
employees whole with respect to Company contribution amounts that were
limited by tax law.

(4) Comprised of contributions to the Engraph, Inc. Retirement Plus Plan.

OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION EXERCISES IN 1995 AND 1995 YEAR-END VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AS OF IN-THE-MONEY OPTIONS
ACQUIRED 12/31/95 AS OF 12/31/95(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 30,000 $ 314,286 380,760 79,275 $ 2,715,952 $ 504,902
P. C. Browning -0- -0- 183,750 40,215 1,082,813 256,129
T. C. Coxe, III 45,000 336,544 58,425 36,330 581,316 231,386
L. Benatar -0- -0- 133,090 23,835 1,799,073 151,805
H. E. DeLoach, Jr. -0- -0- 96,180 23,835 679,124 151,805
</TABLE>

- ---------------

(1) The difference between the exercise price paid and the value of the acquired
shares based on the closing price of the Company's stock on the exercise
date.

(2) Based on $26.25 per share, the December 31, 1995, closing price.

19
<PAGE> 21

OPTION GRANTS TABLE
1995 STOCK OPTION GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AND RESULTING COMPANY
- -------------------------------------------------------------------------------- STOCK PRICE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR 10 YEAR OPTION TERM(2)
OPTIONS EMPLOYEES PRICE EXPIRATION ---------------------------------
NAME GRANTED(1) IN 1995 (PER SHARE) DATE 5% ($32.384) 10% ($51.566)
- ------------------- ---------- ----------- ----------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Coker 79,275 7.4 $19.881 2/1/2005 $ 991,175 $ 2,511,828
P. C. Browning 40,215 3.8 19.881 2/1/2005 502,808 1,274,212
T. C. Coxe, III 36,330 3.4 19.881 2/1/2005 454,234 1,151,116
L. Benatar 23,835 2.2 19.881 2/1/2005 298,009 755,212
H. E. DeLoach, Jr. 23,835 2.2 19.881 2/1/2005 298,009 755,212
Comparable gain in shareholder value for the 91,304,643 shares outstanding as of
February 1, 1995, the grant date. $1,141,581,951 $2,892,987,613
</TABLE>

- ---------------

(1) These options were granted on February 1, 1995, at the closing market price,
became exercisable on February 1, 1996, and were granted for a period of
ten years, subject to earlier expiration in certain events related to
termination of employment. The exercise price can be paid by cash or the
delivery of previously-owned shares. Tax obligations also can be paid by an
offset of the underlying shares.

(2) The amounts in these columns are the result of calculations based on the
assumption that the market price of the Common Stock will appreciate in
value from the date of grant to the end of the ten-year option term at the
rates of 5% and 10% per year. The 5% and 10% annual appreciation
assumptions are required by the rules of the Securities and Exchange
Commission; they are not intended to forecast possible future appreciation,
if any, of the Company's stock price.

20
<PAGE> 22

PENSION TABLE

Named executive officers participate in a non-contributory defined benefit
program which provides for a maximum annual lifetime retirement benefit equal to
60% of final average compensation, computed as a straight life annuity based on
the highest three of the last seven calendar years. In order to receive the full
benefit, the executive must have at least 15 years of service and retire no
earlier than age 65. Eligible spouses (married one year or longer at the
executive's retirement date) receive survivor benefits at a rate of 75% of the
benefit paid to the executives. The total benefit provided by the Company is
offset by 100% of primary U.S. Social Security.

<TABLE>
<CAPTION>
AGE 65 RETIREMENT
FINAL YEARS OF SERVICE
AVERAGE --------------------------------------------------------------------------------------
COMPENSATION(1) 5 10 15 20 25 30 35
- --------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 $ 60,000 $120,000 $180,000 $180,000 $180,000 $180,000 $180,000
400,000 80,000 160,000 240,000 240,000 240,000 240,000 240,000
500,000 100,000 200,000 300,000 300,000 300,000 300,000 300,000
600,000 120,000 240,000 360,000 360,000 360,000 360,000 360,000
700,000 140,000 280,000 420,000 420,000 420,000 420,000 420,000
800,000 160,000 320,000 480,000 480,000 480,000 480,000 480,000
900,000 180,000 360,000 540,000 540,000 540,000 540,000 540,000
1,000,000 200,000 400,000 600,000 600,000 600,000 600,000 600,000
1,100,000 220,000 440,000 660,000 660,000 660,000 660,000 660,000
1,200,000 240,000 480,000 720,000 720,000 720,000 720,000 720,000
1,300,000 260,000 520,000 780,000 780,000 780,000 780,000 780,000
1,400,000 280,000 560,000 840,000 840,000 840,000 840,000 840,000
1,500,000 300,000 600,000 900,000 900,000 900,000 900,000 900,000
1,600,000 320,000 620,000 960,000 960,000 960,000 960,000 960,000
</TABLE>

- ---------------

(1) Final average compensation includes salary, bonus, and cash awards from the
Company's former long-term incentive plan. Age, years of service, and final
average compensation as of December 31, 1995, for the named officers are as
follows:

<TABLE>
<CAPTION>
FINAL
YEARS OF AVERAGE
NAME AGE SERVICE COMPENSATION
- ------------------- --- -------- ------------
<S> <C> <C> <C>
C. W. Coker 62 38 $1,012,403
P. C. Browning 54 2 523,819
T. C. Coxe, III 65 43 582,622
L. Benatar 65 15 692,132
H. E. DeLoach, Jr. 51 10 434,404
</TABLE>

21
<PAGE> 23

EMPLOYMENT AGREEMENT

On September 12, 1993, in conjunction with the Company's tender offer for
Engraph, Inc. Common Stock, the Company entered into an employment agreement
with Mr. Leo Benatar, an executive officer and director of the Company. This
agreement, which superseded the employment agreement of May 7, 1992, between
Engraph, Inc. and Mr. Benatar, secured the continued service of Mr. Benatar
until March 31, 1995. The Company has extended the term of this agreement until
March 31, 1996. This agreement provides for a minimum annual base salary of
$362,500 (Mr. Benatar's then present salary as Chairman and CEO of Engraph,
Inc.), subject to annual review by the Board's Executive Compensation Committee,
and participation in the Company's executive officer bonus plan, Engraph benefit
plans, and the Company's executive benefit and perquisite programs. The
agreement stipulates that during the term of his employment and for two years
thereafter, Mr. Benatar will not compete with the Company, will not solicit its
customers or employees, and will not use or disclose its trade secrets and
proprietary information.

DIRECTORS' COMPENSATION

Employee directors receive no additional compensation for their services as
members of the Board of Directors. Effective July 1, 1994, non-employee
directors were paid a $9,250 quarterly retainer fee and a $1,000 attendance fee
for special meetings. On July 1, 1995, the quarterly retainer fee was increased
to $10,000.

Directors are able to defer part or all of their fees. Directors can choose
to earn market rate interest credits on their deferrals or have their deferrals
treated as if invested in equivalent units of Sonoco Products Company Common
Stock. In the latter account they earn dividend equivalent credits which are
reinvested in stock equivalent units. The directors can choose a fixed period,
commencing the January following termination from the Board of Directors, over
which the account balances will be paid in annual installments.

In accordance with the terms and conditions of the 1996 Non-Employee
Directors' Stock Plan, each non-employee director was awarded 2,000
non-qualified stock options at a price of $27.00 per share, 100% of fair market
value on February 7, 1996. Likewise, Mr. T.C. Coxe, III, was awarded 2,000
non-qualified stock options at a price of $27.25 per share, 100% of fair market
value on March 1, 1996, the date he became an eligible non-employee director.
These grants are subject to approval of shareholders at the Annual Shareholders'
Meeting on April 17, 1996.

Mr. R. C. King, Jr. elected to take early retirement from the Company
effective May 31, 1994, following over thirty-seven years of distinguished
service. To secure his advice and counsel, the Company entered into an agreement
with Mr. King under which he will provide consulting services to the Company on
an as-needed basis through December 31, 1996. Under this agreement, Mr. King
received consulting fees of $331,308 during 1995, and Sonoco arranged for a
third party purchase of Mr. King's home in Hartsville for his basis value in the
home. The cost to the Company was $66,684. In recognition of Mr. King's
innumerable and invaluable contributions to the Company in the past, the Company
provided to him certain benefits under the terms of a retirement agreement. Mr.
King's retirement benefit, including payments from Primary Social Security or
equivalents, Sonoco's Retirement Plan, and Sonoco's Supplemental Executive
Retirement Plan, totals $32,536 per month.

22
<PAGE> 24

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. A. T. Dickson, C. J. Bradshaw, R. E. Elberson, Paul Fulton, B. L.
M. Kasriel, E. H. Lawton, Jr. and Mrs. D. D. Young served on the Company's
Executive Compensation Committee during the year ended December 31, 1995. Mr.
Kasriel was appointed to the committee on April 19, 1995, and Mrs. Young was
appointed on October 18, 1995.

Mr. A. T. Dickson and Mr. Paul Fulton are directors of NationsBank
Corporation; Mr. E. H. Lawton, Jr., is a director of NationsBank, N.A., formerly
NationsBank, N.A. (Carolinas); and Mr. C. J. Bradshaw is a director of Wachovia
Bank of South Carolina, N.A. On October 1, 1993, NationsBank of North Carolina,
N.A., subsequently NationsBank, N.A. (Carolinas), and now NationsBank N.A.,
extended to the Company, as a backstop facility for its commercial paper program
and general corporate purposes, a five-year committed line of credit for
$75,000,000. Wachovia Bank of South Carolina, N.A. has extended a similar line
for $65,000,000. These committed lines of credit from NationsBank, N.A. and
Wachovia Bank of South Carolina, N.A. have been in place since 1987 and have
been renewed and increased or decreased according to the Company's needs.
Additionally, NationsBank, N.A. has extended other lines of credit to the
Company as support for letters of credit, overdrafts and other corporate needs.
NationsBank, N.A. also provides treasury management services to the Company and
investment management services through its trust department. The Company pays
fees to NationsBank, N.A. for these services and for the availability of the
lines of credit, as well as interest on borrowed funds. All transactions were
handled on a competitive basis. Management is convinced that the rates and
provisions were as favorable to the Company as otherwise could have been
obtained.

Mr. H. L. McColl, Jr., an executive officer of NationsBank Corporation, is
a member of the Company's Board but is not a member of the Company's Executive
Compensation Committee. Mr. C. W. Coker, Chairman and Chief Executive Officer of
the Company, is a member of NationsBank Corporation's Compensation Committee.

Mr. P. C. Browning, President and Chief Operating Officer of the Company,
serves as a director of Phoenix Home Life Mutual Insurance Company. Mrs. D. D.
Young, who is an executive officer of Phoenix Home Life Mutual Insurance
Company, serves on the Company's Executive Compensation Committee.

TRANSACTIONS WITH MANAGEMENT

Mr. H. L. McColl, Jr. is Chairman, Chief Executive Officer and Director of
NationsBank Corporation. Mr. C. W. Coker, Mr. A. T. Dickson, Mr. Paul Fulton and
Mr. E. C. Wall, Jr. are directors of NationsBank Corporation and Mr. E. H.
Lawton, Jr. is a director of NationsBank, N.A. Mr. C. J. Bradshaw and Mr. T. C.
Coxe, III are directors of Wachovia Bank of South Carolina, N.A. See the
"Compensation Committee Interlocks and Insider Participation" section above.

During 1995 the Company purchased lumber from a company of which Mr. E. C.
Wall, Jr., a director of the Company, is Chairman of the Board and more than a
10% beneficial owner. Mr. T. C. Coxe, III, a director and former executive
officer of the Company, also is a director of this company. The aggregate
purchase price of the lumber was $878,960.

23
<PAGE> 25

The Company also purchased timber during the year from a trust of which Mr.
T. C. Coxe, III, a director and former executive officer of the Company, is
trustee and more than a 10% beneficial owner. The aggregate purchase price of
the timber was $433,514.

The Company purchased wooden pallets from a company of which Mr. J. C.
Fort, a director of the Company, is more than a 10% beneficial owner. The
aggregate purchase price of the pallets was approximately $683,244. The Company,
in turn, sold to the same company approximately $719,000 in hardwood timbers.

Management of the Company believes the prices and terms were comparable to
those the Company could have obtained from unaffiliated third parties.

ADOPTION OF THE 1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN

On February 7, 1996, the Board of Directors (the "Board") adopted the 1996
Non-Employee Directors' Stock Plan (the "Plan"), subject to the approval of
shareholders at this Annual Meeting. The full text of this Plan is appended to
this Proxy Statement as Exhibit I. The following summary of the Plan's terms is
qualified in its entirety by the Plan.

The Board believes that the Plan enhances the Company's ability to attract
and retain talented individuals to serve as members of the Board and to promote
a greater alignment of interests between non-employee members of the Board and
the shareholders of the Company. Under the Plan, non-employee directors will
receive non-qualified stock options as a part of their compensation package. The
Plan also permits non-employee directors to elect to receive all or a portion of
their annual retainers and meeting fees in the form of stock options or deferred
stock units.

The Board of Directors recommends that you vote FOR ratification of the
1996 Non-Employee Directors' Stock Plan.

The following is a summary description of the Plan.

Term. If approved by the shareholders, the Plan shall be effective
February 7, 1996, and will remain in effect for an indefinite period of time,
until terminated by the Board.

Common Shares Available for Issuance. For each calendar year the Plan is
in effect, beginning in 1996, subject to adjustments discussed below, 125,000
shares of Common Stock will be made available for issuance under the Plan.
Accordingly, the number of shares available for issuance under the Plan will
increase annually without further shareholder approval. If any grants under the
Plan are settled in cash or in any form other than shares, or if any stock
options expire without being exercised, then the shares covered by such
settlements or expirations shall not be deemed issued and shall remain available
for issuance under the Plan. Any shares of Common Stock exchanged as payment
upon the exercise of stock options also shall be available for future issuance
under the Plan. Additionally, the crediting of dividend equivalents in
conjunction with outstanding awards shall not be counted against the shares
available for issuance. Any shares issued under the Plan may be either
authorized but unissued shares, or previously-issued shares reacquired by the
Company.

Adjustments and Reorganizations. The Board may make such adjustments as it
deems appropriate in the event of changes that impact the Company's share price
or share status, provided that any such actions are

24
<PAGE> 26

consistently and equitably applied to all affected directors and are not
inconsistent with adjustments made to stock options and other stock-based awards
held by employees of the Company. Such events include stock dividends, stock
splits, combination or exchange of shares, merger, consolidation, spin-off or
other distribution (other than normal cash dividends) of Company assets to
shareholders, or any other change affecting shares. In the event the Company is
not the surviving company of a merger, consolidation or amalgamation with
another company or in the event of a liquidation, reorganization or significant
change of control of the Company, and in the absence of any surviving
corporation's assumption of outstanding awards made under the Plan, the Board
may provide for appropriate settlements of such awards either at the time of
grant or at a subsequent date.

Plan Operation. The Plan is intended to permit non-employee directors to
qualify as "disinterested" persons under Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934
("1934 Act"). Accordingly, in many respects the Plan is self-governing and
requires no discretionary action by the Board. However, should any questions of
interpretation arise, they shall be resolved by the Board or such committee of
the Board as may be designated from time to time.

Stock Options. The Plan provides for the granting of two types of stock
options: annual stock option awards and deferred compensation stock options. A
stock option entitles the recipient to purchase a specified number of shares of
Common Stock at a fixed price, subject to terms and conditions of the Plan.
Commencing in 1997, stock options issued under the Plan will carry restoration
rights whereby, if an active non-employee director exercises an option by
tendering previously-acquired shares of Common Stock, such individual will
receive another stock option covering the number of shares tendered with the
term equal to the remaining term of the original stock option and with a per
share exercise price equal to the fair market value of the Common Stock (as
determined under the Plan) as of the date of exercise of such original stock
option.

Each non-employee director will receive an annual stock option grant
covering 2,000 shares at the Board's first regularly scheduled meeting of each
calendar year ("Annual Stock Option"). A person who becomes a non-employee
director during any year after the Board's first regularly scheduled meeting for
such year shall receive a pro-rata Annual Stock Option grant on the date such
person becomes a non-employee director with the number of shares covered by the
option prorated for the number of fiscal quarters remaining in the calendar year
including any partial fiscal quarters. The exercise price of each such Annual
Stock Option shall be the fair market value of the Common Stock on the grant
date and each Annual Stock Option shall generally have a ten-year term and may
be exercised no sooner than six months after the grant date. The number of
shares covered by the Annual Stock Option granted to each non-employee director
in any calendar year may be increased to up to 10,000 shares (subject to the
overall Plan share limitation) without additional shareholder approval provided
that the Board determines that such an amendment would not prevent non-employee
directors from being "disinterested persons" for the purposes of Rule 16b-3 of
the 1934 Act.

If permitted by the Board, non-employee directors may elect to take a
portion or all of their retainers and fees in deferred compensation stock
options. Such options are intended to serve as a deferred payment vehicle for
compensation earned by non-employee directors. The per share exercise price of
each such stock option shall be seventy-five percent of the fair market value of
Common Stock on the grant date, and the total purchase price of the option grant
shall be three times the amount deferred. This results in a total stock option
gain at the time of grant that is equal to the amount of compensation deferred.
The number of such stock

25
<PAGE> 27

options shall be the amount of retainers and fees deferred divided by 25% of the
fair market value of the Common Stock on the grant date. Each deferred
compensation stock option shall have a term that ends five years after the
non-employee director ends his or her service on the Board, and shall be
credited with partial dividend equivalent rights when dividends are paid on
shares of Common Stock.

Deferred Stock Units. If permitted by the Board, non-employee directors
may defer their retainers and fees into deferred stock units. A deferred stock
unit is a bookkeeping entry, equivalent in value to a share of Common Stock
("Deferred Stock Unit"). Such units are intended to serve as a deferred payment
vehicle for compensation earned by non-employee directors. The number of
Deferred Stock Units credited shall be equal to the amount of compensation
deferred divided by the fair market value of Common Stock on the grant date.
Deferred Stock Units shall be credited with dividend equivalent rights when
dividends are paid on shares of Common Stock and shall be paid out in one to
fifteen annual installments, commencing no sooner than the first business day
following the six-month anniversary of the individual's termination of Board
service. The payments may be in the form of shares of Common Stock equal in
number to the amount of Deferred Stock Units credited to the individual's
account and/or in cash based on the fair market value of the Common Stock at
time of payment.

General. Stock options and Deferred Stock Units shall be transferable or
assignable only by will, by the laws of descent and distribution, pursuant to a
qualified domestic relations order; or to the extent permitted by Rule 16b-3
under the 1934 Act to either a trust or estate in which the non-employee
director or his or her spouse or other relative has a substantial interest, or
to a spouse or other immediate relative.

The Board may amend the Plan no more frequently than once every six months,
as it deems necessary or appropriate, to better achieve the purposes of the Plan
unless such amendment is necessary to comport with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act or the rules
thereunder. No amendment without the approval of the Company's shareholders
shall be made which would (i) increase the total number of shares available for
issuance, (ii) except as discussed above, increase the maximum individual Annual
Stock Option limit, (iii) materially increase benefits to participants under the
Plan, (iv) materially modify eligibility requirements or (v) cause the Plan not
to comply with the then-existing Rule 16b-3 or any successor rule under the 1934
Act.

Under the Internal Revenue Code of 1986, the granting of a stock option
does not produce income to the participant or a tax deduction for the Company
unless the option itself has a determinable market value and is not an incentive
stock option. Upon exercise of a stock option, the excess of the fair market
value of the shares over the option exercise price is taxable to the participant
as ordinary income and deductible as an expense by the Company.

Subject to shareholder approval of the Plan, each current non-employee
director has been granted an Annual Stock Option covering 2,000 shares of Common
Stock. Except for the option granted to Mr. Coxe, the exercise price per share
for these options is $27.00, the fair market value of the Common Stock on the
first regularly scheduled meeting of the Board held on February 7, 1996, the
date the options were granted. Mr. Coxe's option was granted on March 1, the
date he became a non-employee director as a result of his retirement. The
exercise price per share for his option is $27.25, the fair market value of the
Common Stock on March 1, 1996. Each of these annual stock options will expire
ten years after the grant date, except in the

26
<PAGE> 28

event of the participant's death while the option is outstanding, in which case
the option will expire no sooner than one year following the date of death. The
amount of any future benefits to be received by non-employee directors under the
Plan is not determinable.

In order to be approved, the Plan must receive the affirmative vote of a
majority of the outstanding shares of Common Stock present, or represented, and
eligible to vote at the Annual Meeting.

The Board of Directors recommends that you vote FOR ratification of the
1996 Non-Employee Directors' Stock Plan.

ELECTION OF INDEPENDENT AUDITORS

Independent auditors are to be elected by the shareholders for the calendar
year 1996. The firm of Coopers & Lybrand L.L.P., Certified Public Accountants,
has audited the books and records of the Company for many years, and the Audit
Committee of the Board of Directors recommends continuing the services of this
firm. Representatives of Coopers & Lybrand L.L.P. will be present and available
to answer any questions that may arise at the Annual Meeting and may make a
statement if they so desire.

The Board of Directors recommends that you vote FOR the election of Coopers
& Lybrand L.L.P. as independent auditors for the Company for the current year.

COMPLIANCE WITH THE SECURITIES EXCHANGE ACT OF 1934

As required by Section 16(a) of the Securities Exchange Act of 1934, the
Company's directors, its executive officers and certain individuals are required
to report periodically their ownership of the Company's Common Stock and any
changes in ownership to the Securities and Exchange Commission and the New York
Stock Exchange.

The Company failed to file on a timely basis three reports for Mr. E. C.
Wall, Jr. Mr. Wall made three small purchases for a Keogh Pension Plan on April
19, 1984, January 30, 1989, and February 12, 1990. Mr. Wall is a director of the
Company. This information should have been filed with the Securities and
Exchange Commission on Forms 4 due May 10, 1984, February 10, 1989, and March
10, 1990, but was reported on February 9, 1996, on Form 5.

SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

A shareholder proposal to be presented at the next Annual Meeting must be
received by the Company not later than November 1, 1996, in order to be included
in the Proxy Statement and Proxy.

27
<PAGE> 29

OTHER MATTERS

As of the date of this statement management knows of no business which will
be presented for consideration at the meeting other than that stated in the
notice of the meeting. As to other business, if any, that may properly come
before the meeting, it is intended that proxies in the accompanying form will be
voted in respect thereof in accordance with the best judgment of the person or
persons voting the proxies.

TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE MARK, SIGN, DATE, AND
RETURN YOUR PROXY AS PROMPTLY AS POSSIBLE. PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS ON THE ACCOMPANYING PROXY.

Charles J. Hupfer, Secretary

March 15, 1996

28
<PAGE> 30

EXHIBIT 1

SONOCO PRODUCTS COMPANY

1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN

1. Purpose. The Sonoco Products Company Non-Employee Directors' Stock
Plan (the "Plan") is intended to enhance the Company's ability to attract and
retain talented individuals to serve as members of the Board and to promote a
greater alignment of interests between non-employee members of the Board and the
shareholders of the Company.

2. Definitions. As used in the Plan, the following terms have the
respective meanings:

(a) "Annual Stock Option" means the Stock Option granted to each
Eligible Director pursuant to Section 7.

(b) "Board" means the Company's Board of Directors.

(d) "Company" means Sonoco Products Company, a corporation established
under the laws of the State of South Carolina.

(e) "Deferred Stock Unit" means a bookkeeping entry, equivalent in
value to a share of Common Stock, credited in accordance with an election
made by an Eligible Director pursuant to Section 8.

(f) "Election Date" means the date on which an Eligible Director files
an election with the Secretary of the Company pursuant to Section 8(a).

(g) "Eligible Director" means any director who is not an employee of
the Company or any subsidiary or affiliate of the Company on the applicable
Grant Date for purposes of Section 7 and on the applicable Election Date
for purposes of Section 8.

(h) "Exercise Price" shall mean (a) the Fair Market Value for a Stock
Option granted pursuant to Section 7 of the Plan and (b) the Fair Market
Value less the per share amount of compensation deferred for a Stock Option
granted pursuant to Section 8(c) of the Plan.

(i) "Fair Market Value" means the closing price of a share of Common
Stock as reported on the composite tape for securities listed on the New
York Stock Exchange (the "Exchange") for the specific Grant Date or other
date in question. If no sales of Common Stock were made on the Exchange on
that date, the closing price of a share of Common Stock as reported on said
composite tape for the preceding day on which sales of Common Stock were
made on the Exchange shall be used.

(j) "Grant Date" means the date specified in Section 7 and Sections
8(b) and 8(c) as shall be applicable.

(k) "Plan" means the 1996 Non-Employee Directors' Stock Plan.

(l) "Stock Option" means a right granted pursuant to either Section 7
or 8(c) of the Plan to an Eligible Director to purchase Common Stock at the
applicable Exercise Price.

(m) "1934 Act" means the Securities Exchange Act of 1934.

29
<PAGE> 31

3. Effective Date. Subject to the approval by the shareholders of the
Company prior to December 31, 1996, the Plan shall be effective as of February
7, 1996.

4. Common Shares Available for Issuance. Subject to any adjustments
contemplated by Section 5, for each calendar year the Plan is in effect, 125,000
shares of Common Stock shall be cumulatively available for Stock Options and the
settlement of Deferred Stock Units. Thus, any shares which are not issued in the
year they become available shall be available in subsequent years for the
settlement of Stock Options and Deferred Stock Units. In addition, any shares of
Common Stock which may be exchanged, either actually or by attestation, as full
or partial payment to the Company upon the exercise of a Stock Option, shall be
available for future awards under the Plan. If a Stock Option expires without
being exercised, the shares of Common Stock covered by such option shall remain
available for issuance under the Plan. If a Stock Option or Deferred Stock Unit
is settled in cash or in any form other than shares, then the shares covered by
these settlements shall not be deemed issued and shall remain available for
issuance under the Plan. The crediting of dividend equivalents in conjunction
with outstanding Deferred Stock Units or Stock Options shall not be counted
against the shares available for issuance. Any shares issued under the Plan may
be either authorized but unissued shares, or previously-issued shares reacquired
by the Company.

5. Adjustments and Reorganizations. The Board may make such adjustments
as it deems appropriate to meet the intent of the Plan in the event of changes
that impact the Company's share price or share status, provided that any such
actions are consistently and equitably applied to all affected Eligible
Directors (and are not inconsistent with adjustments made to Stock Options and
other stock-based awards held by employees of the Company).

Accordingly, in the event of any stock dividend, stock split, combination
or exchange of shares, merger, consolidation, spin-off or other distribution
(other than normal cash dividends) of Company assets to shareholders, or any
other change affecting shares, such proportionate adjustments, if any, as the
Board in its discretion may deem appropriate to reflect such change, shall be
made with respect to:

(i) he aggregate number of shares that may be issued under the Plan;

(ii) the number of shares covered by each outstanding award made
under the Plan;

(iii) the Exercise Price for each outstanding Stock Option; and

(iv) the limit on the number of shares that may be covered by each
Annual Stock Option grant set forth in Section 7.

In the event the Company is not the surviving company of a merger,
consolidation or amalgamation with another company or in the event of a
liquidation, reorganization or significant change of control of the Company, and
in the absence of any surviving corporation's assumption of outstanding awards
made under the Plan, the Board may provide for appropriate settlements of such
awards either at the time of grant or at a subsequent date.

6. Plan Operation. The Plan is intended to permit Eligible Directors to
qualify as "disinterested" persons under Rule 16b-3 promulgated by the
Securities and Exchange Commission under the 1934 Act. Accordingly, in many
respects the Plan is self-governing and requires no discretionary action by the
Board except as contemplated by the language herein. However, should any
questions of interpretation arise, they shall be resolved by the Board or such
committee of the Board as may be designated from time to time.

30
<PAGE> 32

7. Annual Stock Option Grants.

a. Grants to be Made at the First Regularly Scheduled Meeting of the
Board. Commencing with calendar year 1996, at the first regularly
scheduled Board meeting of each calendar year the Plan is in effect, each
Eligible Director will receive an Annual Stock Option to purchase 2,000
shares of Common Stock or such higher number as may be established pursuant
to Section 17. The Exercise Price of each such option shall be the Fair
Market Value on the Grant Date, and each such option shall have a ten-year
term.

b. Grants to be Made Subsequent to the First Regularly Scheduled
Meeting of the Board. A person who becomes an Eligible Director,
subsequent to The Board's initial regularly scheduled meeting of a calendar
year during which the Plan is in effect, shall receive an Annual Stock
Option grant on the date such person becomes an Eligible Director. The
number of shares covered by the Annual Stock Option granted to such
individual shall be the product of multiplying:

(i) the number of shares to be covered by the Annual Stock Option
grant received by each Eligible Director for such calendar year pursuant
to subsection (a) above by

(ii) (A) 100% if the person becomes an Eligible Director during the
first calendar quarter, (B) 75% if the person becomes an Eligible
Director during the second calendar quarter, (C) 50% if the person
becomes an Eligible Director during the third calendar quarter, or (D)
25% if the person becomes an Eligible Director during the fourth
calendar quarter. If such calculation results in a fractional share, the
number of shares shall be increased to the next whole number.

8. Deferred Stock Units and Deferred Compensation Stock Options. Each
Eligible Director may elect to take a portion or all of his or her annual
retainer and committee and meeting fees in either the form of Deferred Stock
Units or in the form of Stock Options, provided that the Board has determined to
permit either or both such forms of deferred payment to be available for such an
election. However, in no event may the portion of the Eligible Director's annual
compensation affected by such an election be less than 25%.

a. Method of Electing. In order to elect either such form of deferred
payment, the Eligible Director must complete and deliver to the Secretary
of the Company a written election designating the portion of his or her
compensation that is to be deferred and the form of deferral. Such an
election shall be effective beginning with compensation earned for the
first calendar quarter commencing six months after the applicable Election
Date. Such election may be subsequently amended or revoked, but any such
change shall not be effective until the first calendar quarter commencing
six months after the Eligible Director has filed such a change in writing
with the Secretary of the Company. Any such election shall be effective
only to the extent that there are sufficient shares of Common Stock
available under the Plan pursuant to Section 4.

b. Deferred Stock Units. If an Eligible Director elects to receive
compensation in the form of Deferred Stock Units, such individual will have
Deferred Stock Units credited to his or her account on

31
<PAGE> 33

the first business day of each calendar quarter during which his or her
election is effective. The number of Deferred Stock Units covered by each
such crediting shall be determined by the following formula:

<TABLE>
<C> <S> <C>
Number of Amount of Compensation to be Deferred
Deferred Stock = -------------------------------------------------------------
Units Fair Market Value
</TABLE>

Deferred Stock Units shall be credited with dividend equivalents when
dividends are paid on shares of Common Stock and such dividend equivalents
shall be converted into additional Deferred Stock Units based on the Fair
Market Value on the date credited.

c. Deferred Compensation Stock Options. If an Eligible Director
elects to receive compensation in the form of Stock Options, such
individual shall be granted a Stock Option on the first business day of
each calendar quarter during which his or her election is effective. The
per share Exercise Price shall be seventy-five percent of the Fair Market
Value of Common Stock on the Grant Date. The number of shares covered by
each such Stock Option shall be determined by the following formula:

<TABLE>
<S> <C> <C>
Amount of Compensation to be Deferred
Number of Shares = -------------------------------------------------------------
25% of the Fair Market Value
</TABLE>

If this calculation results in a fractional share, the number of
shares covered by the resulting Stock Option shall be increased to the next
whole number.

Each such option shall expire five years after termination of Board
service. Individuals who hold outstanding Stock Options awarded under this
Section shall be credited with dividend equivalents based upon 25% of the
per share dividend when dividends are paid on shares of Common Stock, and
such dividend equivalents shall be converted into Deferred Stock Units
based on the Fair Market Value on the date credited.

9. Option Exercisability and Restoration. A Stock Option shall not be
exercisable until the later of six months following its Grant Date, or six
months following the date that the Plan is approved by the shareholders. The
following terms and conditions also shall apply, if applicable:

a. Participant's Death. In the event of the participant's death
during the final year of the term of an outstanding Stock Option, such
option shall remain exercisable for one full year after the participant's
death.

b. Exercise Payment. A Stock Option, or portion thereof, may be
exercised by written notice of exercise delivered to the Secretary of the
Company, accompanied by payment of the aggregate Exercise Price. Such
payments may be made in cash, personal check or with Common Stock (either
actually or by attestation) already owned by the individual, valued at the
Fair Market Value on the date of exercise, or a combination of such payment
methods. The Board, however, may deny the exercise of Stock Options during
a period of time that it deems necessary to prevent any possible violation
of federal securities laws or any other laws. As soon as practicable after
notice of exercise and receipt of full payment for shares of Common Stock
being acquired, the Company shall deliver to the individual a certificate
representing the Common Stock purchased through the Stock Option.

32
<PAGE> 34

c. Restoration Option Right. Commencing in 1997, each Stock Option
granted pursuant to the Plan will contain a restoration right whereby, if
an optionee, who is an Eligible Director on the date of exercise, exercises
the option by tendering, either actually or by attestation,
previously-acquired shares of Common Stock, such individual will receive a
Stock Option covering the number of shares tendered with the term equal to
the remaining term of the original Stock Option and with a per share
Exercise Price equal to the Fair Market Value as of the date of exercise of
the original stock option. Stock Options granted pursuant to such
restoration rights also will carry restoration Stock Option rights.

10. Termination of Board Service. Upon termination of Board service by an
individual holding awards granted under the Plan, the following conditions shall
apply:

a. Stock Options. Each Stock Option shall continue to remain
outstanding for the duration of its term, subject to the extension of such
term in the event of a participant's death while holding the option as
provided in Section 9(a).

b. Deferred Stock Units. Unless the Eligible Director has elected,
prior to termination of Board service, to receive payment in fifteen or
fewer annual installments, commencing no sooner than the first business day
following the six-month anniversary of the individual's termination of
Board service, he or she will receive a lump sum payment equal to the
aggregate Fair Market Value of the Deferred Stock Units credited to his or
her account as of such date. This payment may be in the form of shares of
Common Stock equal in number to the amount of Deferred Stock Units credited
to the Eligible Director's account. Installment payments may similarly be
made in shares of Common Stock. However, the Board may determine to settle
a portion or all of an award payment in cash based on the Fair Market Value
at time of payment.

11. No Fractional Shares. No fractional shares shall be issued under the
Plan and cash shall be paid based on the Fair Market Value at time of payment in
lieu of any fractional shares in settlement of Deferred Stock Units granted
under the Plan pursuant to Section 8.

12. Transferability of Awards. Stock Options and Deferred Stock Units
shall not be transferable or assignable other than (a) by will or the laws of
descent and distribution; (b) pursuant to a qualified domestic relations order;
or (c), to the extent permitted by Rule 16b-3 under the 1934 Act, as then
applicable to the Company's employee benefit plans, by gift or other transfer to
either (i) any trust or estate in which the original award recipient or such
person's spouse or other immediate relative has a substantial beneficial
interest, or (ii) a spouse or other immediate relative, provided that such a
transfer would continue to require such awards to be disclosed pursuant to Item
403 of Regulation S-K under the Securities Act of 1933, as amended from time to
time.

13. Award Documentation. Each award granted under the Plan shall be
evidenced by written documentation which shall contain the terms and conditions
governing such award. Directors need not execute any instrument or
acknowledgment of notice of an award under the Plan, in which case acceptance of
such an award by the respective participant will constitute agreement to the
terms of the award.

14. No Right to Service. Neither participation in the Plan nor any action
under the Plan shall be construed to give any Eligible Director a right to be
retained in the service of the Company.

33
<PAGE> 35

15. Unfunded Plan. Unless otherwise determined by the Board, the Plan
shall be unfunded and shall not create (or be construed to create) a trust or a
separate fund or funds. The Plan shall not establish any fiduciary relationship
between the Company or any participant or other individual. To the extent any
individual holds any rights by virtue of a grant awarded under the Plan, such
rights (unless otherwise determined by the Board) shall be no greater than the
rights of an unsecured general creditor of the Company.

16. Successors and Assigns. The Plan shall be binding on all successors
and assigns of a participant, including without limitation, the estate of such
participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the participant's
creditors.

17. Plan Amendment. The Board may amend the Plan as it deems necessary or
appropriate to better achieve the purposes of the Plan, except that no amendment
without the approval of the Company's shareholders shall be made which would:

(i) Subject to adjustments contemplated by Section 5, increase the
total number of shares available for issuance under Section 4 or the
individual Annual Stock Option limit set forth in Section 7, except that
such individual limit may be increased to up to 10,000 shares of Common
Stock if the Board has determined that such an amendment would not prevent
Eligible Directors from being "disinterested persons" for purposes of Rule
16b-3, if required by such rule or any successor rule under the 1934 Act;
or

(ii) To the extent such amendment would be inconsistent with the
then-existing Rule 16b-3 or any successor rule under the 1934 Act,
materially increase the benefits accruing to participants under the Plan or
materially modify the requirements as to eligibility for participation in
the Plan; or

(iii) Otherwise cause the Plan not to comply with Rule 16b-3 or any
successor rule under the 1934 Act.

In addition, the Plan may not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.

18. Plan Termination. The Board may terminate the Plan at any time.
However, if so terminated, prior awards shall remain outstanding and in effect
in accordance with their applicable terms and conditions.

19. Governing Law. The validity, construction and effect of the Plan and
any actions taken or relating to the Plan shall be determined in accordance with
the laws of the State of South Carolina and applicable federal laws.

34
<PAGE> 36

APPENDIX A
P
R
O
X
Y
DIRECTORS
RECOMMEND
VOTING
FOR 1,
2 AND 3

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

SONOCO PRODUCTS COMPANY
POST OFFICE BOX 160 - ONE NORTH SECOND STREET - HARTSVILLE, SOUTH CAROLINA
29551-0160

The undersigned hereby appoints Charles W. Coker, Chairman and Chief Executive
Officer, or Peter C. Browning, President and Chief Operating Officer, as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of Sonoco Products Company held of record by the undersigned on March 1,
1996, at the Annual Meeting of Shareholders to be held on April 17, 1996, or any
adjournment thereof.
(1) ELECTION OF DIRECTORS

<TABLE>
<S> <C>
/ / FOR All Nominees / / WITHHOLD on All Nominees
/ / Withhold On The Following Nominees
Only
---------------------------------------------------------------------------------------
</TABLE>

Nominees -- Three-Year Terms: C. J. Bradshaw, R. J. Brown, J. L. Coker,
Paul Fulton, H. L. McColl, Jr.
One-Year Term: Dona Davis Young
(2) PROPOSAL TO APPROVE THE 1996 NON-EMPLOYEE DIRECTORS' STOCK PLAN.

/ / FOR / / AGAINST / / ABSTAIN

(3) PROPOSAL TO APPROVE THE ELECTION OF COOPERS & LYBRAND L.L.P., CERTIFIED
PUBLIC ACCOUNTANTS, AS THE INDEPENDENT AUDITORS OF THE CORPORATION.

/ / FOR / / AGAINST / / ABSTAIN

(Continued and to be signed and dated on the reverse side)

(Continued from other side)

(4) In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.

Date 19
------------------------ --

------------------------------------

Please sign this proxy exactly
as your name appears hereon. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person. PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

<PAGE> 1

EXHIBIT (99-2)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.

-----------------

FORM 11-K

-----------------

ANNUAL REPORT

PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

-----------------

SONOCO PRODUCTS COMPANY
1983 KEY EMPLOYEE STOCK OPTION PLAN

AND

SONOCO PRODUCTS COMPANY
1991 KEY EMPLOYEE STOCK PLAN

SONOCO PRODUCTS COMPANY

NORTH SECOND STREET

HARTSVILLE, SOUTH CAROLINA 29550

<PAGE> 2

EXHIBIT (99-2)

SONOCO PRODUCTS COMPANY

KEY EMPLOYEE STOCK OPTION PLAN

--------------

The Consolidated Financial Statements and Notes to Consolidated Financial
Statements of Sonoco Products Company represent the financial statements of the
Plans and are hereby incorporated by reference in this Form 11-K Annual Report.