Graphic Packaging Continues Manufacturing Integration and Optimization to Achieve Targeted Synergies of $90 Million
The Company Plans to Close Three U.S. Folding Carton Plants and a Multiwall Bag Facility Plus Streamline Manufacturing Operations in Its Folding Carton Business
MARIETTA, Ga., Feb. 10 /PRNewswire-FirstCall/ -- Graphic Packaging International, Inc., a subsidiary of Graphic Packaging Holding Company (NYSE: GPK), today announced that it plans to close four manufacturing facilities and transition their business to other U.S. operating locations as it continues to aggressively complete integration plans to achieve the previously announced synergy savings of $90 million by 2010.
Graphic Packaging's folding carton facility in Tuscaloosa, Alabama is expected to discontinue production by the end of the second quarter of 2009, and the folding carton plants in Morris, Illinois and Muncie, Indiana are expected to cease operations during third quarter of 2009.
The company also plans to close a multiwall bag packaging facility, located in Cantonment, Florida, by the end of the third quarter of 2009, and redeploy production to other company manufacturing sites in the U.S. to improve operating efficiencies in its specialty bag business and further strengthen synergy savings expected from the combination of Altivity Packaging, LLC and Graphic Packaging Corporation, completed in the first quarter of 2008.
Additionally, Graphic Packaging announced a permanent layoff of approximately 60 employees today at its Elk Grove Village, Illinois folding carton facility in a strategic move to streamline operations and help to ensure the company operates with the lowest cost structure in the industry.
"A year ago, in March 2008, we combined the operations of Graphic Packaging and Altivity Packaging to create one of the world's largest packaging companies. We are continuing to push aggressively in 2009 to integrate assets and streamline operations, as well as achieve a minimum of $90 million in synergy savings expected from our combination," said David W. Scheible, president and chief executive officer of Graphic Packaging International, Inc.
"We intend to compete as the lowest cost producer in our markets. Our initiatives to integrate and optimize our manufacturing base ensure that our customers are reliably supported from a solid network of efficient, low-cost manufacturing facilities. We have focused steadily on these goals over the past 12 months, and we are better positioned today to strengthen our earnings performance and continue to reduce debt even under the current challenging operating environment," Scheible said.
Any statements of the Company's expectations in this press release constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements, which include statements regarding facility closures, transition of business to other locations and our ability to achieve $90 million of annualized synergies by 2010, are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's present expectations. These risks and uncertainties include, but are not limited to, the Company's substantial amount of debt, inflation of and volatility in raw material and energy costs, continuing pressure for lower cost products, the Company's ability to implement its business strategies, including productivity initiatives and cost reduction plans, currency movements and other risks of conducting business internationally, and the impact of regulatory and litigation matters. 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. Additional information regarding these and other risks is contained in the Company's periodic filings with the SEC.
About Graphic Packaging International, Inc.
Graphic Packaging International, Inc., a subsidiary of Graphic Packaging Holding Company (NYSE: GPK), headquartered in Marietta, Georgia, is a leading provider of paperboard packaging solutions for a wide variety of products to food, beverage and other consumer products companies. The company is one of the largest producers of folding cartons and holds a leading market position in coated-recycled boxboard and specialty bag packaging. The company's customers include some of the most widely recognized companies in the world. Additional information about Graphic Packaging, its business and its products is available on the company's web site at www.graphicpkg.com.
SOURCE Graphic Packaging Holding Company
Released February 10, 2009