PaperAge Magazine

Graphic Packaging and DHL to Invest $274 Million in Louisiana Paper Mill, Folding Carton Plant, Logistics Center

Gov. John Bel Edwards "With this modernization and expansion announcement, we are securing the future of Graphic Packaging in Louisiana for generations to come while attracting an invaluable logistics partner in DHL." – Louisiana Gov. John Bel Edwards.

May 2, 2017 - Louisiana Gov. John Bel Edwards on April 28 joined Michael Doss, President and CEO of Graphic Packaging International; and Scott Sureddin, CEO of DHL Supply Chain, North America, to announce the companies will make a combined $274 million capital investment in Northeast Louisiana and develop a 1.27 million-square-foot folding carton plant and logistics center in Monroe.

In West Monroe, Graphic Packaging will continue to reinvest in its paper manufacturing location, including upgrades to the mill's paper machines. The company's West Monroe operations will supply paperboard for the new packaging and logistics center in Monroe, where DHL will build the 1.27 million-square-foot center consisting of a 793,000-square-foot distribution facility and a 480,000-square-foot carton converting facility.

The project will create 93 new direct jobs, and Louisiana Economic Development (LED) estimates the warehouse operations will result in an additional 74 new indirect jobs, for a total of more than 160 new jobs in Northeast Louisiana. Graphic Packaging will continue to employ more than 800 people in its West Monroe mill and in the new combined folding carton plant, where Graphic Packaging will move carton production from the company's two existing carton sites in West Monroe to the new Monroe site. A combined annual payroll of more than $78 million will be associated with the investments in Northeast Louisiana.

“For decades, Graphic Packaging has been a backbone of the West Monroe community and a leading economic driver for Northeast Louisiana,” Gov. Edwards said. “With this modernization and expansion announcement, we are securing the future of Graphic Packaging in Louisiana for generations to come while attracting an invaluable logistics partner in DHL. The massive new facility in Monroe will combine Graphic Packaging's skill as a global paperboard and folding carton producer with DHL's expertise as a global logistics leader. Everyone in Louisiana will benefit from these investments, and the families of Ouachita Parish and Northeast Louisiana will be the biggest beneficiaries.”

In addition to West Monroe mill investments totaling $120 million over the next several years, Graphic Packaging will invest $70 million in new state-of-the-art folding carton plant equipment for the converting plant in Monroe. DHL will construct that building and the adjoining distribution center. The total construction investment for the new Monroe facility will be over $84 million.

“After a thorough analysis of our manufacturing needs, it was clear that Ouachita Parish was the best location for this new facility,” said Graphic Packaging's Doss. “A number of factors influenced our decision, including access to an experienced and skilled local workforce and our relationship with the State of Louisiana and local community.”

Louisiana successfully competed against other states to attract the combined folding carton and logistics facility to Monroe. The companies evaluated multiple sites before choosing the 726-acre Millhaven Road property, an LED Certified Site adjacent to the Kansas City Southern Railroad and the north side of Interstate 20, and about two miles east of Monroe Regional Airport.

“DHL Supply Chain is eager to break ground today and begin work on this new facility in Louisiana,” Sureddin said. “The quality location and high-caliber workforce in the area are certainly appealing to us. DHL Supply Chain's relationship with Graphic Packaging helps enable the customer to take business to the next level. The launch of this partnership means the beginning of increased efficiency for the organization and its customers, and that's something DHL Supply Chain is proud to enable.”

LED began discussing the first component of the projects with Graphic Packaging in September 2014. To secure the projects, the State of Louisiana offered a competitive incentive package consisting of a performance-based, $3 million Modernization Tax Credit, payable in five annual installments, for Graphic Packaging and associated chiefly with its investment in the new converting facility equipment. For its total $190 million capital investment, Graphic Packaging secured a local tax exemption agreement with the Ouachita Industrial Development Board as an alternative to the state's Industrial Tax Exemption Program. The agreement will exempt Graphic Packaging from paying $1.9 million in local property taxes annually for 10 years on the new capital improvements.

For its investment in the Monroe facility, DHL will receive an exemption of local property taxes equivalent to the estimated $11 million to $13 million it initially will provide for public infrastructure improvements at the Millhaven Road site.

In addition, Graphic Packaging will receive support from the nation's No. 1 state workforce training program, LED FastStart®, and the warehouse operator will be eligible to participate in the state's Enterprise Zone Program, which provides a one-time tax credit of up to $3,500 for each new job created, along with either a sales tax rebate on capital equipment and materials purchased or a 1.5 percent tax credit on the company's total capital investment.

DHL will complete the new logistics center by the second half of 2018, with Graphic Packaging consolidating the production of its two West Monroe carton plants into the new combined converting facility in 2019.

SOURCE: Louisiana Economic Development (LED)