One of Augusta’s oldest and largest manufacturers is getting more than a quarter-billion dollars in upgrades.
Atlanta-based Graphic Packaging Holding Co. on Thursday said it is investing $350 million in the Augusta paper mill it acquired earlier this year from International Paper.
The capital infusion into the south Augusta plant will extend the life of the 60-year-old facility and enable it to maintain its 750-employee workforce.
Graphic Packaging officials said during an exclusive interview with The Augusta Chronicle that the six-year, multi-phase modernization will improve the quality of the bleached paperboard the mill manufactures for various food-service and consumer-product companies.
“We want to improve the product and the convertibility, or performance, of the product for our existing customers but also position ourselves to win new customers,” said Scott Grimes, a Graphic Packaging senior vice president who oversees the company’s Augusta and Macon plants.
The investment includes enhancements to existing machinery, installation of a new recovery boiler and improvements to the wood yard. The Fortune 500 company is financing the project through industrial revenue bonds approved earlier this month through the Augusta Economic Development Authority.
Authority Chairman Henry Ingram said it is “wonderful to see a company decide to reinvest in our community.”
“They could have put this investment anywhere in the world and deciding that Augusta, Georgia, is the location for this new investment is telling of the vitality and strength of our community,” Ingram said.
Discussions with the company began in May through a third-party site-selection consultant. Augusta EDA President Cal Wray and Adela Kelly, the Georgia Department of Economic Development’s senior project manager, served as Graphic Packaging’s primary local points of contact.
Kelly said the project’s size makes it one of the largest corporate investments in Georgia in 2018.
“It is certainly in the top 10,” she said.
Wray said the deal accounts for two-thirds of the $550 million invested in Augusta during the year. More important, he said, is the plant’s long-term viability.
“Investing this much money in Augusta makes (the plant) vital for many years to come,” he said.
Graphic Packaging acquired the mill Jan. 1 after purchasing a 79.5 percent stake in International Paper’s North American consumer packaging business.
Augusta Mayor Hardie Davis said the investment “sends a tremendous message” about the quality of the area’s workforce and business climate.
“When the plant was purchased, people were not sure what the long-term disposition would be,” Davis said. “To have this news now is just outstanding.”
Aside from the $350 million bond issue – which enables the company to obtain low-cost financing – the project was incentivized through state investment-tax credits, which can offset up to 50 percent of the company’s Georgia corporate income tax liability. The project is not expected to create additional jobs at the plant, which would make the company eligible for state job-tax credits of up to $4,000 for each new position created.
The plant is Richmond County’s third-largest taxpayer.
The 300-acre Augusta plant is known in the industry as a solid bleached sulfate mill. Graphic Packaging operates a similar plant in Texarkana, Texas. Combined, they produce 1.2 million tons of paper annually.
The publicly traded company last year reported $4.4 billion in sales on 2.9 million tons of paper products in 2017. Graphic Packaging does not disclose individual customers, but the company’s 2017 annual report has a photo of CEO Michael P. Doss posing in front of cups and bowls featuring the logos of Starbucks, Chick-fil-A and Panera Bread Co.
The Augusta mill was developed in 1960 by Continental Can Co. It was acquired by Federal Paper Board Co. in 1985 and by International Paper in 1996.
The mill processes timber – primarily hardwood – into chips that are converted into pulp using heat and chemicals. The fibers are rinsed, bleached and starched before being coated with kaolin clay, which gives the paper its smooth and glossy texture. The finished product is shipped to Graphic Packaging plants and other customers via truck and rail.
Andy Johnson, Graphic Packaging’s vice president of governmental affairs and sustainability, said the plant’s performance played a pivotal role in the company’s reinvestment decision.
“The location of the facility and the diverse educated and skilled local workforce, are very important in that,” Johnson said. “The relationship we have with the state of Georgia and the community there were instrumental in making our decision.”