US consumer packaging company Graphic Packaging Holding has announced it is to permanently decommission its K3 coated recycled paperboard (CRB) machine in Kalamazoo, Michigan, US.
The company said its K3 machine is one of three CRB machines installed at the Kalamazoo facility.
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The K3 machine is also one of the company’s longest-running machines.
All the production activities using the K3 machine were halted from 1 July 2023.
The latest announcement now marks Graphic Packaging’s decision to permanently shut down the machine, which has the capacity to produce 125,000 tonnes of CRB per annum.
The move to decommission the machine, according to the company, is not expected to have any impact on its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) forecasted for the year 2023.
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By GlobalDataThe company has projected adjusted EBITDA of $1.9bn, which is the midpoint of guidance range.
Graphic Packaging said that the current K3 decommissioning decision is also in line with its CRB optimisation plan.
First announced in 2019, the CRB optimisation effort aims to remove higher costs and to phase out machines and capabilities that are less efficient.
In the same year, Graphic Packaging also announced a transformational investment to install a new K2 CRB machine at its Kalamazoo facility.
Graphic Packaging’s $600m investment in the new CRB machine will boost annual CRB production to serve the company’s North American customers.
The permanent decommissioning of the old K3 machine also marks a key step towards network optimisation, the company said.
It will help in saving more resources, while also supporting the company’s margin enhancement goals for the CRB network.
Graphic Packaging said that its new K2 machine is already reaching the expected quality, cost improvement and volume targets, ahead of schedule, to cater to rising demand for high-quality coated recycled paperboard.
