Graphic Packaging Plans to Close Bag Facility and Folding Carton Plants

Graphic Packaging International, Inc., a subsidiary of Graphic Packaging Holding Company, 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.

Source: Graphic Packaging International, Inc.

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