Graphic Packaging has announced plans to invest around $600 million to purchase coated recycled board (CRB) packaging equipment, in order to meet the increasing demand for sustainable packaging solutions.
According to Graphic Packaging, the new CRB production machine will produce approximately 500,000 tonnes of CRB every year, and the investment is expected to deliver $100 million in annual EBITDA once the site is fully operational, estimated to be in 2022.
The company is planning to make the investment in either Ohio or Michigan, subject to a number of conditions, including environmental regulations, and negotiations are currently underway relating to government incentives and labour relations.
Graphic Packaging claims that the CRB machine is designed to be “the largest and lowest-cost producer of CRB in North America.”
Graphic Packaging president and CEO, Michael Doss, said: “We are very pleased to announce our intent to proceed with this significant investment into our integrated CRB platform.
“This is a unique opportunity to make a highly strategic investment in sustainable packaging, exceptional product quality and an unmatched cost position for producing CRB.
“Importantly, the investment will be capacity neutral as we expect to reduce production at other higher-cost CRB facilities after we ramp up production of this highly productive CRB machine starting in early 2022.
“Increasing consumer preference for sustainable packaging is expected to drive steady, long-term demand for packaging solutions manufactured from 100% recycled fibre.
“We are confident the investment will deliver returns well above our cost of capital, and remain fully committed to executing our balanced approach to capital allocation as we continue to build a growing, highly integrated, low-cost paperboard packaging platform.”
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