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Company to Also Implement Customer Price Increases to Offset Continued Raw Material Cost Pressures
MARIETTA, Ga., June 20, 2008 — Graphic Packaging International Inc., a subsidiary of Graphic Packaging Holding Company(NYSE: GPK), today announced that, in response to sharp cost increases for mill inputs such as fiber, energy and chemicals, the Company plans to temporarily shut down its number-two coated board machine at its West Monroe, Louisiana mill. The number-two paper machine at West Monroe produces approximately 100,000 tons of coated unbleached kraft (CUK) annually, which is primarily used in the production of beverage cartons.
"The recent run up in the price of crude oil has translated into higher costs for key mill production inputs like fiber, natural gas and petro-based chemicals," said David W. Scheible, President and Chief Executive Officer. "In response, we are undertaking various actions to offset those increases that include idling certain older, higher-cost assets. The decision to temporarily suspend production from machine number-two will help streamline our cost structure, while customer orders will continue to be fully met by using production from our other, lower-cost CUK machines."
Scheible continued, "Due to the escalating costs and broader inflationary concerns, we are making these necessary adjustments to our operating structure. In addition to the actions we are enacting at our West Monroe mill, we have also determined it is necessary to implement price increases and renegotiate freight and delivery charges. Although Graphic Packaging has a strong reputation for low-cost manufacturing, these actions are necessary for us to remain competitive and to continue providing high-quality, innovative packaging to our customers, while also generating positive returns for our shareholders."
Forward Looking Statements
Statements of the Company's plans or expectations in this release constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements 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. 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 Holding Company
Graphic Packaging International, Inc., a subsidiary of Graphic Packaging Holding Company (NYSE: GPK), headquartered in Marietta, Georgia, is a leading provider of 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.
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