Graphic Packaging to Possibly Consolidate Plants

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Graphic Packaging to Possibly Consolidate Plants

Unread postby NS3322 » Mon Aug 19, 2019 12:01 pm

The Battle Creek Enquirer published an article this morning saying that Graphic Packaging is a building a new $600 million "capacity-neutral" machine that will create 500,000 tons of coated recycled paperboard per year. Here's the kicker, it would likely move 500,000 tons of annual production from other plants. The combined production of the Battle Creek, White Pigeon, Middletown and East Angus mills is 498,000 tons. :(

The Kalamazoo mill is their biggest operation, producing 461,000 tons per year between its two machines.

GP operates three plants in Michigan: Battle Creek, Kalamazoo, and White Pigeon (formerly White Pigeon Paper/Artistic Carton). All three are active rail shippers.



Battle Creek Enquirer wrote:Graphic Packaging Holding Co. has announced that it is investing in a new $600 million machine that will create 500,000 tons of coated recycled paperboard per year.

The company has described the machine as "capacity-neutral," which means that it will not increase production for the company but instead replace production at other mills.

Graphic Packaging would likely need to move 500,000 tons of annual production from other plants.

Battle Creek city officials are worried about what it might mean for the Graphic Packaging mill here, which employs approximately 160 people.

"There's a lot we don't know," assistant city manager Ted Dearing said. "But if you do the math, a closure is a possibility."

Location undecided
Graphic Packaging has mills in Battle Creek; Kalamazoo; Middletown, Ohio; and East Angus, Quebec, with an agreement to acquire a mill from Artistic Carton in White Pigeon, Michigan.

The company, which has headquarters in Georgia, describes itself as one of the largest producers of folding cartons and paper food service products in the United States.

Sue Appleyard, senior manager of corporate communications for Graphic Packaging, said that the machine can be built at one of the company's current locations or at a new location and that it will likely be in either Michigan or Ohio.

The company plans to have a location picked by September 24.

The plan is to have the machine up and operating by early 2022, Appleyard said.

What's that means for Battle Creek's mill is unclear, but Dearing said the city is concerned.

“They could do it differently, but if they want to preserve Kalamazoo, all you have to do is do the math,” he said.

The Kalamazoo mill is by far their biggest operation, producing 461,000 tons per year between its two machines, according to an analysis by Fastmarkets RISI, a price reporting and market analysis provider for the forest products sector.

The new machine being capacity-neutral means that the company will need to eliminate 500,000 tons of production from their current mills.

The combined production of the Battle Creek, White Pigeon, Middletown and East Angus mills is 498,000 tons, Fastmarkets FISI’s analysis said.

Appleyard said the new machine does not necessarily guarantee consolidation of the other mills. The efficiency of the new machine and market conditions at the time of its operation will play into those decisions, she said.

“There’s just so many variables out right now,” she said. “As the project continues to move forward, we’ll know more information.”

Dearing said that, in theory, the Kalamazoo location could be eliminated because it produces close to 500,000 tons as well, but Fastmarkets RISI’s analysis says Kalamazoo has two machines that are among the company's cheapest to operate.

Dearing believes that makes it unlikely for the company to close its Kalamazoo location.

“Who knows?” Dearing said. “They could say, ‘we don’t need [Kalamazoo’s] production.’ But it certainly makes sense for them to preserve Kalamazoo.”

Dearing said that the city and Battle Creek Unlimited are making a pitch to be the home to the new machine, which would preserve Battle Creek’s location. The new machine would likely be built in the Fort Custer Industrial Park if Battle Creek landed it.

“In a perfect world, we capture that new machine,” he said. “I know BCU is doing everything it can to keep it here.”

Joe Sobieralski, president and CEO of Battle Creek Unlimited, said they are aware of the investment Graphic Packaging has made and have been in communications with them.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby AARR » Mon Aug 19, 2019 12:55 pm

I believe the BC plant gets tank cars. Do they get any box car traffic? What kind of traffic do the other plants get?
NS3322 wrote:GP operates three plants in Michigan: Battle Creek, Kalamazoo, and White Pigeon (formerly White Pigeon Paper/Artistic Carton). All three are active rail shippers.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby dave989 » Mon Aug 19, 2019 1:58 pm

AARR wrote:I believe the BC plant gets tank cars. Do they get any box car traffic? What kind of traffic do the other plants get?
NS3322 wrote:GP operates three plants in Michigan: Battle Creek, Kalamazoo, and White Pigeon (formerly White Pigeon Paper/Artistic Carton). All three are active rail shippers.
The Battle Creek plant gets tank cars from CN. Finished products are trucked. This could be anouther nail in the BC coffin.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby NS3322 » Mon Aug 19, 2019 7:15 pm

dave989 wrote:This could be anouther nail in the BC coffin.


Not sure what you mean by that. The Fort Custer Industrial Park has lots of industry moving in. Although no one uses rail out there.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby NS3322 » Mon Aug 19, 2019 7:24 pm

AARR wrote:I believe the BC plant gets tank cars. Do they get any box car traffic? What kind of traffic do the other plants get?
NS3322 wrote:GP operates three plants in Michigan: Battle Creek, Kalamazoo, and White Pigeon (formerly White Pigeon Paper/Artistic Carton). All three are active rail shippers.


BC just gets tank cars. White Pigeon seems to get mainly tank cars, and possibly covered hoppers. Kzoo gets tank cars, covered hoppers, and boxcars.
Last edited by NS3322 on Tue Aug 20, 2019 11:49 am, edited 1 time in total.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Mike H » Mon Aug 19, 2019 11:59 pm

[/quote]Note: The news article is deceptive when it comes to the number of plants GP has. There are a lot more than listed.
For example, they missed the mills in Kendallville, Indiana and Xenia, Ohio to name just two.[/quote]

Those locations are not Mills. You are confusing box plants with Mills which are two different things. The Mills make the paper & box plants like Kendallville take paper from the mill & convert it into sheets or boxes depending on the final product they are making.

It's interesting that Graphic is looking to do this project, but you can be sure the mill in White Pigeon will close. The odds of this new mill being built near the existing Mills is probably highly unlikely due to the outbound logistics of having 2 big mills near each other, plus they would both be competing for the same fiber & there is only so much scrap paper in this market. For that reason Ohio probably has a better shot of landing this, but hopefully they build it in the area so local jobs can be retained.

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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Super Chief » Tue Aug 20, 2019 6:11 am

I concur with Mike on White Piegon, last time I was in that mill the roof barely kept rain off the paper machine. It is an old mill and the companies only keep the most efficient machines running. Look at all the shuttered ones left in the state or torn down. With the ground water contamination left at the existing sites I don't think Pure Michigan politicians will kick in incentives. Pioneer looses a customer which is half their volume on that line.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby AARR » Tue Aug 20, 2019 6:16 am

So is White Pigeon Paper a Graphic Packaging company?
Super Chief wrote:Pioneer looses a customer which is half their volume on that line.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Super Chief » Tue Aug 20, 2019 6:32 am

As the article states Don "in the process of acquiring ". If the new mill replaces the volume of the existing mills output the handwriting is on the wall for that mill in 2022.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby AARR » Tue Aug 20, 2019 7:12 am

Super Chief wrote:As the article states Don "in the process of acquiring ". If the new mill replaces the volume of the existing mills output the handwriting is on the wall for that mill in 2022.


So it was said the
Pioneer looses a customer which is half their volume on that line.


I didn't realize WPP was half of MSO's business :o . How many carloads does WPP receive?
Last edited by AARR on Tue Aug 20, 2019 8:04 am, edited 1 time in total.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Super Chief » Tue Aug 20, 2019 7:18 am

So if BC puts it in the Ft. Custer park NS would switch it off the Amtrak line. So many things as far as market conditions etc. would affect the final mill count at that time. I've been in every mill selling product from White Piegon to Ontonagon, Alpena to Niles and all of Wisconsin, the 09 recession was not kind to those employees. Railroads lost a lot of traffic with that one. The number of mills in Canada, New England and beyond that went south or closed altogether. If they keep it here great.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby NS3322 » Tue Aug 20, 2019 11:53 am

Mike H wrote:Those locations are not Mills. You are confusing box plants with Mills which are two different things. The Mills make the paper & box plants like Kendallville take paper from the mill & convert it into sheets or boxes depending on the final product they are making.


Thank you for clarifying this!

Super Chief wrote:I concur with Mike on White Piegon, last time I was in that mill the roof barely kept rain off the paper machine. It is an old mill and the companies only keep the most efficient machines running. Look at all the shuttered ones left in the state or torn down. With the ground water contamination left at the existing sites I don't think Pure Michigan politicians will kick in incentives. Pioneer looses a customer which is half their volume on that line.


Although I have never been inside this mill, I drove by it last fall and was shocked to see how old and outdated it looked from the exterior. Plus it is also in a semi-residential area. The closing of this mill will be a big blow to the White Piegon economy.

I bet GP purchased WPP just to shut it down. :(
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby NS3322 » Tue Aug 20, 2019 12:04 pm

Super Chief wrote:So if BC puts it in the Ft. Custer park NS would switch it off the Amtrak line.


There is actually already a disused railroad spur in place in Ft. Custer. However, it is my understanding that the grade is very significant on this spur.
And most of the property the spur runs through is being used by Prairie Farms Dairy. (They recently purchased the big warehouse to the right of the Geislinger Corporation).

ft custer.JPG


AARR wrote:I didn't realize WPP was half of MSO's business :o . How many carloads does WPP receive?

Here is the current list of MSO customers. I would love to add carload counts, if those are available! I assume Abbott Nutrition is the majority of the other half of MSO's business?
I wonder if the new owners of Pioneer will "dump" this line if WPP closes?

mso.JPG
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby 1TrackMind » Tue Aug 20, 2019 1:49 pm

White Pigeon doesn't get that many tanks for the mill. Only a few each month.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Super Chief » Wed Sep 04, 2019 9:47 pm

Graphic Packaging announced today that they will build a $600 million dollar plant on 123 acres on the old Checker Motors site. The city , township and state are ponying up a tax incentive package that beat out the site in Ohio. They are to produce 500,000 tons of recycled cardboard at this plant. Michigan will lead the nation in this product. Looks like the rails past BO tower will still stay shiny with this news. Good for the Elk too. Two new power sub-stations to be built there too by Consumers Energy. Will take 2 years to build plant so more stone trains.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Ben Higdon » Mon Sep 09, 2019 9:35 am

Great news for the Elk and the NYC North Industrial. I hope this plant will ship outbound by rail...
Last time I saw a boxcar at the Graphic Packaging plant on Patterson was in the mid 90s, and even then I don't know if it was an outbound load.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby arty flowers » Mon Sep 09, 2019 9:42 am

Will CN still get to switch the plant too off their little industrial spur?
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Ben Higdon » Tue Sep 10, 2019 7:23 am

Good question. I don't know if the remnant of the GTW at Checker was owned by Checker or GTW. Up until shortly before Checker closed, the tracks still crossed Mosel Ave and there was a siding for Fletcher Paper (last served in mid/late 90s). So I would think GTW still owned at least some of the trackage at that point.
Maybe the option of service from two carriers was a (minor) selling point for the location.
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby chapmaja » Tue Sep 10, 2019 9:28 am

I am not familiar with the Checker Motors location. Where was this? Was it current plant located at 1500 Pitcher Rd? It looks like a plant was at this location at one time.

If so, which track would have been the GTW track into the property? Looking at the map, there is the "main" that runs up to where the plant on Pitcher is. This is the track than runs by BO Tower correct. When you get up near the Graphic Packaging plant, the line curves to the east and goes into the "yard" that is used to serve the plant. To the east is a north south track that also appears to appears to also be in place to serve the plant on Paterson. This line, when you follow it south, appears to be "intact" as far south as PCA Kalamazoo.

Was this at one time a GTW track that extended all the way north? If so, what happened to the line from the GTW's tracks south of the Amtrak mainline north to the point the line is still intact. Was this part of a track consolidation at one time?
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Re: Graphic Packaging to Possibly Consolidate Plants

Unread postby Ben Higdon » Wed Sep 11, 2019 8:41 am

Checker occupied the area bounded by Mosel Ave to the north, Pitcher to the west, NYC to the east, and Graphic Packaging to the south.
The NYC is the track that runs past BO. Once it straightens out north of Patterson St, it made a beeline north. The GTW was adjacent to the NYC from BO to Patterson, then ran along the east side of Pitcher St almost all the way to Mosel. It curved through the Checker plant and was again adjacent to the NYC for a short distance across Mosel Ave, then continued north a few more miles.
When Penn Central put in the new southeast wye at BO Tower around 1970, the GTW was abandoned from their freight house up to a ways north of Patterson. Reason being the curve necessary for the new wye required it be laid over the GTW right of way (which is why there is that S-curve in the Grand Elk main track at Michigan Ave). After that GTW used the CK&S or NYC to reach their tracks at Checker.
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