Graphic Packaging Holding Company to Close Middletown, Ohio Paperboard Manufacturing Facility

Rhea-AI Summary

Graphic Packaging Holding Company (NYSE: GPK) announced the permanent closure of its Middletown, Ohio coated recycled paperboard manufacturing facility, scheduled for June 1, 2025. The closure, affecting approximately 130 employees, is part of a previously disclosed plan to consolidate recycled paperboard production into Kalamazoo, Michigan, and the new Waco, Texas facility.

The Waco facility is expected to begin commercial production later this year. The company states this consolidation advances their strategy to build competitive advantage in paperboard manufacturing while improving environmental metrics including water and energy efficiency. Management emphasized that the timing aligns with Waco's completion and transition inventory being in place.

Positive

• Strategic consolidation to improve operational efficiency
• New Waco facility coming online to enhance production capabilities
• Expected improvements in water and energy efficiency
• Transition inventory already in place for smooth operational shift

Negative

• Loss of 130 jobs at Middletown facility
• Potential short-term operational disruption during transition
• Costs associated with facility closure and consolidation

Insights

Financial Analyst

Graphic Packaging's closure of its Middletown facility represents a strategic consolidation of its recycled paperboard manufacturing into newer, more efficient operations. This move affects 130 employees but advances the company's previously disclosed plan to optimize its production footprint.

The timing is strategically sound as the company prepares to bring its new Waco facility online later this year while maintaining production at its Kalamazoo location. By concentrating production in these facilities, GPK is positioning itself to capture manufacturing efficiencies and cost advantages that should improve its competitive position in the sustainable packaging market.

This consolidation aligns with two key value drivers: operational efficiency and environmental improvement. The company specifically mentions water and energy efficiency gains, which should reduce operating costs while supporting its sustainability commitments.

While facility closures involve short-term costs and human impact, the long-term financial benefits typically outweigh these considerations. Modernized facilities generally deliver better margins through reduced waste, lower maintenance costs, and improved production yields. The reference to producing "the highest quality, most economically advantaged paperboard" suggests GPK expects meaningful production cost advantages from this consolidation.

This move reflects disciplined capital allocation and operational focus that should benefit shareholders through improved return on invested capital, though specific financial projections weren't disclosed.

ATLANTA, April 1, 2025 /PRNewswire/ -- Graphic Packaging Holding Company (NYSE: GPK) ("Graphic Packaging", or "the Company"), a global leader in sustainable consumer packaging, today announced that it will permanently close its Middletown, Ohio, coated recycled paperboard manufacturing facility on or about June 1, 2025. The closure is part of a previously disclosed plan to consolidate recycled paperboard production into Kalamazoo, Michigan, and the new Waco, Texas, facility, which is expected to begin commercial production later this year. The Middletown closure will affect approximately 130 employees.

"I want to thank the Middletown team which has played an important role in the growth and success of Graphic Packaging. We are working closely with affected employees to provide employment placement assistance and support," said Graphic Packaging President and CEO Michael Doss.

The closure of Middletown advances the Company's strategy to build competitive advantage in paperboard manufacturing while driving environmental improvements including water and energy efficiency.

"Graphic Packaging's investments in innovation and execution capabilities have made us the global leader in sustainable consumer packaging," Mr. Doss added. "Our investments in Kalamazoo and Waco are a critical part of the value we deliver to our customers, allowing us to produce the highest quality, most economically advantaged paperboard available in North America. With Waco moving quickly toward completion and transition inventory in place, this is the right time to further simplify our paperboard manufacturing footprint."

Media: comms@graphicpkg.com
Investors: investor.relations@graphicpkg.com 

Forward Looking Statements

Any statements of the Company's expectations in this press release, including, but not limited to the timing of the closure of the Middletown, OH recycled paperboard manufacturing facility and the commencement of commercial production at the Waco, Texas paperboard manufacturing facility, and expected environmental improvements such as water and energy efficiency, product quality and economic advantage, constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and its present expectations. These risks and uncertainties include, but are not limited to, inflation of and volatility in raw material and energy costs, changes in consumer buying habits and product preferences, competition with other paperboard manufacturers and product substitution, the Company's ability to implement its business strategies, including strategic acquisitions, productivity initiatives, cost reduction plans and integration activities, as well as the Company's debt level, currency movements and other risks of conducting business internationally, the impact of regulatory and litigation matters, including the continued availability of the Company's U.S. federal income tax attributes to offset U.S. federal income taxes and the timing related to the Company's future U.S. federal income tax payments. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made and the Company undertakes no obligation to update such statements, except as may be required by law. Additional information regarding these and other risks is contained in the Company's periodic filings with the Securities and Exchange Commission.

About Graphic Packaging Holding Company

Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia, designs and produces consumer packaging made primarily from renewable or recycled materials. An industry leader in innovation, the Company is committed to reducing the environmental footprint of consumer packaging. Graphic Packaging operates a global network of design and manufacturing facilities serving the world's most widely recognized brands in food, beverage, foodservice, household, and other consumer products. Learn more at www.graphicpkg.com.

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SOURCE Graphic Packaging Holding Company

FAQ

When will Graphic Packaging (GPK) close its Middletown, Ohio facility?

The Middletown facility will permanently close on or about June 1, 2025.

How many employees will be affected by GPK's Middletown facility closure?

Approximately 130 employees will be affected by the closure.

Where is GPK consolidating its recycled paperboard production?

Production is being consolidated into facilities in Kalamazoo, Michigan and the new Waco, Texas facility.

When will GPK's new Waco, Texas facility begin commercial production?

The Waco facility is expected to begin commercial production later in 2025.

What are the expected benefits of GPK's facility consolidation?

The consolidation aims to improve competitive advantage, water and energy efficiency, and produce higher quality, more economically advantaged paperboard.