Graphic Packaging to close recycled paperboard mill

Graphic Packaging International, headquartered in Atlanta, is moving forward with the planned closure of its coated recycled paperboard (CRB) mill in Tama, Iowa, though the company said in its first quarter earnings presentation the shutdown is happening earlier than anticipated.

The closure is part of the company’s mill network optimization strategy introduced with its plans to build a $1 billion CRB mill in Waco, Texas, and Graphic Packaging says the Tama site should be closed by June.

“With this new investment [in Waco] and targeted mill closures, we are looking at a simplified and optimized mill network that will lower cost and strategically increase capacity,” Graphic Packaging President and CEO Michael Doss said during the company’s full-year earnings call in February.

Graphic Packaging acquired the Tama mill Jan. 31, and according to a report from KCCI in Des Moines, Iowa, Tama Mayor Doug Ray said the company purchased the facility with the intention of eventually closing it.

According to Graphic Packaging’s latest financial report, the Tama mill netted $4 million in sales in the first quarter of this year.

The company’s CRB mill network includes facilities in Tama; Kalamazoo, Michigan; Middletown, Ohio; and East Angus, Quebec. Along with the Tama mill, Graphic Packaging eventually will close the Middletown and East Angus sites, too.

With its current mill network, including the four CRB facilities and four virgin fiber-fed mills, Graphic Packaging reports 4.2 million tons of annual paperboard capacity, and in its full-year financial report, said its mills consumed 1.4 million tons of recycled fiber last year as well as 10 million tons of virgin wood fiber.

Graphic Packaging’s planned optimized mill network will include the Kalamazoo and Waco CRB mills and its virgin paperboard mills in West Monroe, Louisiana; Queen City, Texas; Augusta, Georgia; and Macon, Georgia. The company anticipates the optimization to increase its total paperboard capacity to 4.4 million tons—a 5 percent increase that Doss said provides flexibility to adjust capacity in line with demand.

“While the capacity expansion is driven by the addition of the new Waco mill, the benefits run across other substrates,” he said in February. “The improved CRB quality made possible by our new machines will enable substrate optimization across our mill system as some packages that historically require virgin fiber can now be made with CRB. This will free up incremental virgin capacity in our other mills to meet our growing global demand.

“The combination of our global packaging growth plans and our mill network optimization plans will support integration rates in excess of 90 percent once the new mill is in operation. Overall, this investment will extend our position as the lowest-cost, highest-quality paperboard producer in North America.”