Folding Carton

For coated recycled board in the U.S. Midwest

Graphic Packaging Holding Company’s Board of Directors has approved a $600 million investment in a new coated recycled board (CRB) machine in the Midwest with annual capacity of approximately 500,000 tons. The company is planning to make the investment in either Ohio or Michigan, subject to a number of conditions, including environmental permitting and negotiations currently underway relative to government incentives and labor relations.  

The CRB machine is designed to be the largest and lowest cost producer of CRB in North America. Upon completion of the project, the company believes the machine will produce the highest quality coated recycled board product in North America with the lowest-caliper capabilities in the industry. Graphic Packaging expects the investment to be capacity neutral by eliminating higher cost production at other facilities and will deliver an incremental $100 million in annualized EBITDA upon full ramp up in 2022. The increase in EBITDA will be driven by cost savings from significantly increased scale production, reduced raw material consumption, and lower fixed costs. The investment will be funded from cash flow and existing credit facilities with most of the spending occurring in 2020 and 2021. 

The company expects to complete final negotiations and provide an update on the status of the investment, including the location, in late September. It has also scheduled an Investor Day for September 26, 2019 in New York City at the NYSE where it will discuss the strategic and financial rationale for the investment in more detail, as well as other key strategic and financial priorities.