Graphic Packaging to Invest in New Coated Recycled Board Machine

SEATTLE (Scrap Monster): The Board of Directors of Graphic Packaging Holding Company has approved the proposal to make strategic investment of $600 million in a new coated recycled board (CRB) machine in the Midwest. The new machine is estimated to have annual capacity of approximately 500,000 tons.

According to company press release, it has not yet finalized the location for the investment. The location will be chosen from Ohio or Michigan, depending upon a number of conditions including government incentives, environmental permits and labor relations. An update on the status of the investment and finalized location is expected in late September this year, upon completion of final negotiations.

The CRB machine, upon running, will have the capacity to produce the highest quality coated recycled board product in the entire North American region. It will help Graphic Packaging to offset higher cost production at its other facilities and deliver an incremental $100 million in annualized EBITDA, mainly driven by cost savings. The full ramp up of the project is expected in 2022. The company will fund the investment from cash flow and existing credit facilities, the press release noted.

Michael Doss, President and CEO expressed confidence that the investment will deliver returns well above the cost of capital. It is further to company’s goal to build a growing, highly integrated, low cost paperboard packaging platform, he added.