Good morning. I'm John Haley, Chairman of Sunoco's Board of Directors. On behalf of the board and the company's management, we welcome you to Sunoco's twenty twenty one Annual Shareholders Meeting. Due to the public health impact of the COVID nineteen pandemic and to support the health and safety of our associates and shareholders, we're conducting today's meeting with a limited number of shareholders at the Center Theater here in Hartsville, South Carolina, while all shareholders are also able to attend the meeting electronically. I will now call the business meeting to order and advise you that the annual report for 2020, notice of annual shareholders meeting, proxy statement, and the proxy were mailed on or about 03/17/2021 to shareholders of record as of 02/24/2021, notifying each of the annual meeting to be held today.
Just over 100,000,000 shares of our common stock are outstanding and entitled to vote, and each share of common stock has one vote. We've appointed Elizabeth Kramer of Sunoco and Mark Zemkind of Continental Stock Transfer and Trust Company as inspectors inspectors of election to tabulate the ballots. Our bylaws provide that the presence in person or by proxy of a majority of the outstanding shares entitled to vote constitutes a quorum. If you're joining us electronically and have not submitted your proxy vote, you may vote now on the online portal using the control number found on your proxy card. There's also a chat feature that will allow you to ask questions during the meeting.
Let me introduce our corporate secretary, John Florence, who is also Sonoco's vice president of human resources and our general counsel. Mister secretary, will you please advise if a quorum is present?
Mister chairman, I am advised by the inspectors of election that there have been delivered to the transferred agent prior to the meeting proxies executed by holders of more than 91% of shares outstanding entitled to vote. Therefore, a quorum is present.
Thank you, John. The annual meeting of Sonoco Products Company is duly convened, and we're ready to consider the matters of business. Mister Florence has the minutes of last year's meeting. And in the interest of expediency, I would entertain a motion to dispense with John's recitation of the minutes so that we may move on with the rest of the business portion of the meeting. Is there a motion?
So moved. Thank you, Rick. And a second? Second. Thank you, Rob.
Our next item of business involves proposals to come before shareholders. For a shareholder proposal to come before this meeting, it must have been submitted to the secretary of the company in writing before 02/05/2021, and it must comply with the requirements of our bylaws. Today, we have four proposals for consideration and an individual shareholder proposal. Starting with the first item, your board of directors recommends the election of the following directors for a one year term expiring at our next annual meeting in 2022. They include r Howard Coker, doctor Pamela l Davies, Theresa J Drew, Philippe Guimeau, John R Haley, Robert R Hill Junior, Eleni Istovredis, Richard G.
Kyle, Blythe J. McGarvey, James M. McCauley, Sundaram Nagarajan, Mark D. Okin, Thomas e Widden, and Lloyd m Yates. I'd like to recognize Harry Cockrell who served on our board since 2013 and has decided not to stand for reelection.
I know Harry's listening today. So on behalf of the entire board, I wanna thank you for many years of commitment to Sunoco, first as partner in the development of Sunoco's Asia Pacific business and then serving on our board since 2013. Harry, we wish you well in all your future endeavors. I also wanna recognize Eleni Istovridis who joined the board in October. Elaine has extensive leadership experience in banking and manufacturing, spending more than two decades working in Asia.
She's currently a business consultant residing in McLean, Virginia. And welcome, Elaine. Now do I have a motion?
So moved.
Thank you, Julie. And a second? Second. Thank you, Rick. Our second item is the ratification of selection of PricewaterhouseCoopers as our independent registered public accounting firm for the fiscal year ending 12/31/2021.
Do I have a motion? Soothe. Thank you, Roger. And a second? Second.
Thank you, Marcy. The third item is a resolution requiring shareholders to provide advisory nonbinding approval of compensation of the named executive officers as described in the proxy. Do I have a motion?
So moved.
Thank you, Roger. And a second?
Second.
Thank you, Elizabeth. The fourth item is a proposal to amend the articles of pro of incorporation to give shareholders the right to request that the company call a special meeting of shareholders. Do I have a motion?
So moved.
Thank you, Julie. And a second?
Second.
Thank you, Marcy. The final item is an advisory nonbinding shareholder proposal regarding a majority voting standard for the election of directors, which is outlined in the proxy. Your board of directors has carefully considered this proposal. And for reasons explained in the proxy, we do not believe the proposal is in the best interest of the company or its shareholders. Accordingly, the board has recommended a vote against this proposal.
Do any parties wish to speak for or against the resolution? At this time, I'd like to recognize Elizabeth Kramer, one of the inspectors of election, to present the shareholder proposal per the shareholder's request. Elizabeth?
Proposal five, directors to be elected by majority vote. Resolved. Shareholders hereby request that our board of directors initiate the appropriate process as soon as possible to amend our company's articles of incorporation and or bylaws to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders with a plurality vote standard retained for contested director elections. That is when the number of director nominees exceeds the number of board seats. In order to provide shareholders a meaningful role in director elections, our company's current director election standard should be changed from a plurality vote standard to a majority vote standard.
The majority vote standard is the most appropriate voting standard for director elections where only board nominated candidates are on the ballot. This will establish a more meaningful vote standard for board nominees and could lead to improved performance by individual directors and the entire board. Under our company's current voting system, a director can be elected with as little as one vote from the same director standing for election. It's like an election in North Korea. More than 77% of companies in the S and P 500 have already adopted majority voting for uncontested elections.
Our company has an opportunity to join the growing list of companies that have already adopted the standard. Please vote yes, directors to be elected by majority vote proposal five.
Thank you, Elizabeth. Do I have a motion? So moved. And a second?
Second.
Thank you, Roger. I'd like to make you aware that Sunoco will be releasing its first quarter twenty twenty one financial results before the market opens tomorrow, Thursday, April 22. You're invited to listen to a webcast teleconference between management and the financial community starting at 11AM Eastern Time on our website at sunoco.com. Mister secretary, please report on the preliminary tabulation by the inspectors of the voting on the resolutions presented to this meeting.
Mister chairman, the inspectors of election have reported that shareholders have voted with substantial support to elect all nominees for director and have voted by a majority to ratify the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending 12/31/2021. Shareholders approved the advisory resolution on executive compensation as well as proposal four to amend the articles of incorporation. Finally, the advisory nonbinding shareholder proposal regarding a majority voting standard for the election of direction election of directors received the majority of votes cast, but less than 50% of shares entitled to vote.
Thank you, John. This concludes the business portion of our annual meeting. I'd now like to turn the meeting over to Howard Coker, our President and CEO, to provide an update on the state of the company. Howard, the floor is yours.
Thank you, John, and good morning, everyone. Let me start by thanking our shareholders for your support and for working with us while dealing with the limitations imposed by the ongoing pandemic. 2020 was both a test of our resolve as a company and a testament to the strength of our people. We rang in a new decade, faced a global health and economic crisis, as well as social and political unrest around the world. Any one of these events would have made for a historic year, but we faced all of them at once.
And I believe we've come out the other side a much better company. Before I begin, let me remind you today's presentation contains a number of forward looking statements based on current expectations, estimates and projections. Actual results could differ materially. Information about these forward looking statements and our use of non GAAP financial measures is available in the Investor Relations section of the company's website at sunoco.com. Despite the impact of the recession, we quickly refocused operations on accelerating production of food packaging to meet consumers' growing preference for at home eating, while adjusting our industrial related and protective packaging businesses in response to demand swings.
We developed vitally needed temperature assured packaging to begin shipping life saving vaccines and therapeutic drugs to combat the spread of the virus. We further improved our portfolio by acquiring Can Packaging, a French designer and manufacturer of sustainable paper packaging, while divesting our lower margin display and packaging businesses. Overall, we produced solid financial results in 2020 with net sales down just 2.5% and base earnings declining 3.4%. However, base operating profit before depreciation and amortization improved to a record $781,000,000 I'm also pleased that we continue to be selected as one of Fortune's most admired companies and were named for the third year in a row to Barron's top 100 most sustainable company. These recognitions are a tribute to our 20,000 associates working in more than 320 locations in 34 countries around the world.
Today, Sunoco is the global leader in paperboard cans as well as provider of flexible and rigid plastic food packaging. Approximately 80% of consumer sales are for food related products, which continues to show solid growth. We're also the global leader in the production of uncoated recycled paperboard along with tubes, cores, and cones used in industrial packaging applications serving the paper, film, textile, tape, and specialty markets. These center of excellence are augmented by growing businesses in health care, protective, and retail packaging. As I look back at all we accomplished last year, it can never measure up to the spirit of generosity that I found in our company.
I'm struck by how much this organization has given back and impacted the lives of others, whether that was providing essential food, medical, and industrial packaging to keep the global economy moving or helping our communities and our neighbors navigate extremely difficult times. Several of our businesses produce or provide a personal protective equipment, which has been so critical to supporting frontline health care workers. We develop packaging for shipping COVID nineteen diagnostic test kits, vaccines, and other critical medicines and medical devices. Some of our businesses partnered with local farmers to provide packaging to help stock food banks, which have become a lifeline for so many families during these uncertain times. Just as our guiding principle states, people build businesses by doing the right thing.
Our people demonstrated yet again that when we stay true to our values, there's nothing we can't do together. We had an excellent year in our consumer packaging segment with organic sales up 2% and operating profit reaching a record, up 27% from 2019. Rigid paper containers had a very solid growth year with volume mix up more than 4%. Flexibles also had one of its best years, although volume was mixed with gains in food packaging offset by declines in confectionery sales. Prepared and specialty plastic food trays had an exceptional year with organic sales up double digits, but that was offset by volume declines in our economic sensitive industrial plastics business.
Display and packaging segment sales declined due to the slowing retail promotional activity during the pandemic. However, the team managed the business extremely well and operating profits increased by 10%. As I mentioned earlier, we added can packaging to our rigid paper container portfolio in August. This business gives us advanced machinery innovation and production of sustainable paper packaging in Europe. CAN Packaging has technology to produce all paper containers as well as proprietary equipment to allow us to target growth in emerging markets.
To further focus our portfolio on our consumer and industrial centers of excellence, we made the decision to divest certain lower margin non core businesses. In November, we sold our European contract packaging business located in Poland. And earlier this month, we completed the sale of our U. S. Display and packaging business.
Combined, these two businesses were sold for approximately $200,000,000 and we're applying the proceeds to further invest in ourselves while returning value to our shareholders. The pandemic had a significant impact on our global paper industrial segment in 2020 with operating profits declining nearly 30% due to a 4.7% decline in volume mix and a negative price cost relationship driven by rising raw material prices. As the pandemic lockdown, global economies, our industrial volumes declined significantly in the second quarter of the year, but recovered through the rest of 2020 and continue to improve into 2021. Finally, our protective solutions segment had a strong 2020, which drove a 3% improvement in operating profit. As we focus our thinking on the future, we're spending more time looking in the mirror rather than looking out the window.
That means we're taking a closer view of our core consumer and industrial businesses and determining how increased investment in our people and technology can better drive both growth and margin improvement. A prime example of this strategy is our $114,000,000 capital commitment to project Horizon, an investment that will transform our Hartshall corrugated media machine into a state of the art uncoated recycled paperboard operation with annual production capacity of about a 180,000 tons. This machine is designed to be one of the lowest cost producers of URB in the world and is expected to be completed in the first half twenty twenty two. This upgrade will make our cost per ton about 18% lower than our close closest competitor, and we expect to drive additional cost savings from supply chain optimization, increased consumption of lower cost mixed paper, along with environmental and power consumption savings. There are four aspects to the project, starting with modernizing our facility to better transport, handle, and store recovered paper, our primary raw material.
We're well under construction and expect the phase of the first phase of the project to be completed by July. During demolition, we've been able to reclaim about 6,000 tons of concrete, which is being used to reduce gravel cost by about a $125,000 for eliminating landfill waste. Next is the construction of a new stock prep system, which will feed our new machine as well as other sealer machines on the complex. The new pulping system will allow us to to use more mixed paper, thus lowering our finished costs. Construction started in March and will be completed by October.
We will sequence these activities with the building of a new finished good warehouse to modernize the finishing and storage of our products. This will enable us to reduce handling and dependency of outside warehouses, thus reducing truck traffic and, of course, the number of trucks and trailers we currently use to move material around our campus. This new warehouse complex should be completed by mid October. I'll also mention that we're using a lot of local contractors on this project. And so far, we've dedicated about 20% of demolition and construction spanning to local companies.
Finally, the conversion of the number 10 machine should be completed toward the end of the 2022, which will be about three months longer than we anticipated due to COVID related construction and machinery delays. This will mean we will continue producing medium at least through the 2021, but considering favorable market conditions that should not impact our financial projections. While we were already moving into the healthcare space, the pandemic further confirmed to us the critical role that medical products play around the globe, and with it the importance of packaging. We continue to see growth potential in temperature assured packaging for biotech related pharmaceutical shipments. As this chart shows, biotech related medicine growth is projected to be about 9% through 2024, which is about equal to the sales growth we have seen in our ThermoSafe business.
And we intend to continue investing in our complementary protective packaging businesses where we see growing demand to provide product safety and security and growing ecommerce connected world. Beginning in 2021, we're changing our reporting structure to better reflect how we are managing our business going forward. This picture illustrates our simplified structure. This change leaves us reporting in two segments, consumer packaging and industrial paper packaging. Our remaining businesses will be presented in an all other group.
The protective solutions and display and packaging segments will be eliminated. Changes to the consumer packaging segment will include moving our TEQ healthcare and industrial plastics business units to all other. Industrial paper packaging will be relatively unchanged except that our fiber protective packaging unit, which provides protection for appliances, will be added from the formal protective solutions segment. All other will include our health care and protective packaging businesses, including TEQ, ThermoSafe, our consumer and automotive molded foam businesses, as well as our alloyed retail security packaging unit. Let me switch gears for a moment to address our environmental, social, and governance commitments and actions.
We're committed to creating sustainable products, services, and programs for customers, our employees, and communities that support our corporate purpose of better packaging, better life. This chart highlights some of the key attributes of our ESG program. Snook has focused on the environmental impact of our products and operations for decades. We're one of the few packaging companies that operates one of the 10 largest recycling businesses in The United States. We're also focused on making significant reductions in greenhouse gas emissions and water usage, all in an effort to tackle the challenges of climate change.
While we've made substantial progress since our program began in 02/2008, we recently put together a global cross functional team working with science based targets to find ways to dramatically reduce our carbon footprint over the next decade and to explore new technologies that could lead us to further carbon emission reductions in the longer term. Our invest in our self strategy also means we're investing more in our people. Sunoco's core belief that we are only as strong as our people underlines our commitment to diversity inclusion. We have a very diverse global workforce and we're focused on improving women and minority representation in all our senior leadership. In addition, we're committed to lifting up historically disadvantaged businesses in an effort to make a positive economic impact on society.
We've had a dedicated supplier diversity program for twenty years. And since 2010, we have spent more than $1,500,000,000 with diverse suppliers. In 2020, our diversity spend was approximately 9.8% of our total supplier spend in The US and Canada. Finally, I'd be remiss if I did not mention our sustainability product development where we are focused on achieving more sustainable use and increased recyclability of our packaging. Recently, we hired a senior leader of sustainability reporting directly to me to work closely with our customers to identify opportunities to meet their changing product needs.
With that in mind, we continue to expand our EnviroSense line of more sustainable packaging. EnviroSense is represented across our portfolio from rigid plastics to flexibles to our iconic paper containers. In addition, we formed a partnership with TELUS, a producer of sugarcane pulp products, to produce dual ovenable bowls and trays for frozen and chilled foods made from a 100% US grown sugarcane, an annually renewable resource. We call this new product Nutrellis, and we had a very successful launch with the new frozen mill line produced by Primal Kitchen and expect to see more customers using this unique package in the coming years. Let me wrap up by making a few comments about our balanced capital deployment strategy.
Capital expenditures will increase to $300,000,000 in 2021, driven primarily by Project Horizon. But in addition, we have deployed a strong pipeline of high return internal opportunities that have the ability to accelerate growth or enhance margin improving productivity. Returning cash to our shareholders remains a top priority. The Board of Directors authorized a 5% increase in our dividend back in February, representing the ninety sixth consecutive year we provided a cash payout to our shareholders. I'll also mention this is the thirty eighth consecutive year that we have increased dividends and our payout provides just under a 3% yield, nearly twice that of the S and P five hundred.
I'm pleased to announce today that your board approved a quarterly dividend of $0.45 per share, payable on 06/10/2021 to shareholders of record on May 10. In addition, the board has approved a new share repurchase authorization of up to $350,000,000 This new authorization demonstrates our financial strength and illustrates our focus on a balanced capital allocation strategy that includes investing in our core consumer and industrial businesses while consistently returning cash to shareholders. Finally, we will continue to improve our portfolio by selectively acquiring and divesting to strengthen our core consumer and industrial businesses. Our strong balance sheet and robust cash flow provides us the flexibility to evaluate and pursue more internal and external opportunities. However, we do remain committed to maintaining our investment grade credit rating.
Entering twenty twenty one, we certainly are not free from challenges, but we do have many opportunities in front of us. The coronavirus may have upended the way we work, but it's also strengthened us and has helped us better prepare for what's next. As I shared with you last year, we will continue to drive a sense of urgency throughout our company to move more quickly to address longer term issues and support opportunities that can lead to long term performance improvements. We're proud of how our people have grown comfortable operating in uncomfortable times. We remain confident that Sunoco is well positioned for when the grip of the pandemic weakens and we'll continue to invest to reinforce the long term potential of our business while remaining committed to returning value to our shareholders.
We thank you for entrusting us with your investment. I wanna personally thank my teammates, our customers, the communities we serve, and of course, our shareholders for all the support I have received to undertook this great role of being your president and CEO. Let me stop here and see if there are any questions.