With spring near, you may now notice cleanup work underway in and along the banks of the Kalamazoo River. Graphic Packaging is pleased to see this U.S. EPA-directed cleanup is being done for the community as it is part of a larger cleanup of the Kalamazoo River. Part of the work now underway is occurring near our operations. The cleanup work is not related to Graphic Packaging or our Kalamazoo operations.
The EPA is overseeing the removal of PCB-contaminated sediment within Verburg Park Pond and along the banks of the Kalamazoo River. This work is part of a larger cleanup of a section of the Kalamazoo River EPA has designated as Area 1. Cleanup activities are being conducted by Georgia-Pacific LLC and International Paper Company. We understand the cleanup activities starting in March are expected to take three years to complete.
Here at Graphic Packaging, we have been hard at work in Kalamazoo for nearly two years constructing a new $600 million paper machine that expands our processing capacity and ensures job security for our local employees for years to come.
Today, we are thrilled to say that construction was largely completed at the end of 2021 and our new machine, which we refer to as K2, is now producing paperboard. Once it is operating at full capacity, the new four-story machine will produce more than 1,400 tons per day of the highest-quality recycled paperboard in the industry. Here is what it looks like inside:
Phase 2: Exterior Campus Improvements
Now we are looking forward to the next phase of our project, which will be focused on renovating the exterior of all of the existing buildings at our Kalamazoo campus.
The purpose of this phase of the project is to improve the exterior looks of our existing buildings so that they match the exterior of our new K2 building, fit in better with the community, and include improved safety and weatherization elements for our employees. Once completed, the aesthetic of our buildings will be transformed from a traditional, no-frills manufacturing look to one that is far more modern and appealing to the community.
Work on our Kalamazoo beautification project, which has been approved by the city’s zoning board, is expected to begin this spring and continue into 2023. The project includes plans to overhaul all seven entrances to our buildings along North Pitcher Street.
The upgrades will include improved lighting, increased usage of bricks for facades, awnings over entrances and increased Graphic Packaging signage. We expect that the security entrance to our K1 machine will look like this architectural rendering when it is complete:
At our south entrance, we plan to overhaul the façade with upgraded materials, provide weatherization elements designed to reduce slips and falls, and improve the lighting. When completed, this entrance will look like this architectural rendering:
We are also renovating the interior of our operations. Here is a look at our control center where we monitor all aspects of the production process and product quality.
Securing Local Jobs for the Future Making Sustainable Products
All of these upgrades are in addition to the construction of our K2 machine, which is a state-of-the-art machine and the industry’s newest in more than thirty years.
In 2019, Graphic Packaging made a commitment to the state of Michigan and Kalamazoo that it would invest $600 million to expand our operations and create 25 new jobs. In return, the state and the city provided an economic incentive package. Since then, we have hired 140 new employees and now employ a total of 650 in Kalamazoo when we include those who work at our carton manufacturing plant. Additionally, economic estimates indicate that every direct job at Graphic Packaging in Kalamazoo supports up to three indirect jobs in the Kalamazoo community. These jobs include people with trade skills, security contractors and hospitality workers.
What’s even more important is that this project positions Kalamazoo as a global leader in recycling for years to come. When K2 is fully operational, more than 40% of the recycled paperboard for the North American market will come from Kalamazoo.
We are also proud of the impact this project makes on our global footprint. Based on initial estimates, K2 will reduce our greenhouse gas emissions by nearly 20%, reduce water usage by 300 million gallons annually and reduce purchased energy by 18% across our coated recycled board manufacturing platform in North America. We believe our investment in Kalamazoo benefits the community, the environment, our employees and our customers.
K2 and Kalamazoo in the National Spotlight
Our investment in Kalamazoo has been generating industry attention. Trade industry publications and even the Wall Street Journal have been writing about our project because of the interest in paperboard products as a better, more environmentally friendly, and sustainable option for product packaging than plastic. The Wall Street Journal said this in its Jan. 3rd edition when it took an in-depth look our Kalamazoo plant:
KALAMAZOO, Mich.—When a new building-size machine cranks up this month, it will begin turning mountains of recycled cardboard into paperboard suitable for greener forms of packaging.
The $600-million project, the first new paperboard production line built in the U.S. in decades, represents an enormous bet by owner Graphic Packaging Holding Co. …on a future without foam cups, plastic clamshell containers or six-pack rings.
Wall Street Journal subscribers can read the full story HERE.
Last year, we were happy to join the City of Kalamazoo and members of the community as a steering committee was formed to develop a community benefits agreement (CBA). Although our participation in any project is voluntary, we view the CBA as a positive collaboration between the community and Graphic Packaging.
Since then, Graphic Packaging has met with the committee three times and will meet again soon as we continue to discuss possible future programs and projects that would benefit the city and the communities, where our operations are located.
We are pleased to report that these early discussions have been productive. Kalamazoo community leaders have suggested several creative ideas related to youth activities, workforce development and other proposals. The steering team is defining the potential proposals and prioritizing the projects. If adopted, this would be Kalamazoo’s first community benefits agreement.
In most cases, a CBA is a contract between a developer and community-based organization representing residents’ interests. In our case, we are a manufacturer, not a real estate developer, and the idea for the CBA was suggested while the city was considering a tax abatement for our $600 million expansion project. With that context in mind, we are working with the committee to identify programs or community activities that will make the most impact in a short period of time.
As part of this process, Graphic Packaging developed an overview for the committee that outlines programs that we are working on or have completed that have had a positive impact on the community. These include, implementing programs to significantly mitigate the potential to create nuisance odors, purchasing and remediating several properties near our facility, and workforce recruiting and development programs. This overview was developed to provide a baseline, or starting point, for our discussion with the committee. Since many committee members said they found the overview helpful, we thought it would also be helpful to share it with the community. The full overview can be viewed here.
Graphic Packaging plans to continue to engage with the city’s steering committee and is hopeful that a set of recommendations can be provided to the Kalamazoo City Commissioners in April.
Over the past 12 to 18 months, we have worked with the city of Kalamazoo on our $600 million expansion project on Pitcher Street and we have listened closely to the community’s quality-of-life concerns in the neighborhood.
Graphic Packaging, and the companies that owned the coated recycled board (CRB) mill in this community before us, have been here for well over 100 years. Our employees live and work in this community and we are proud of what we do.
In September 2020, when the commission passed the first version of a tax abatement for our expansion project, we said publicly that we are committed to doing more for the community – in terms of working harder to mitigate potential odors at our operations, continuing our relationship with the local schools and through other community engagement efforts.
At Graphic Packaging, we are aware of the economic and social challenges faced by lower income and minority communities.
In fact, Graphic Packaging adopted a Sustainability program in 2008 that included corporate-wide environmental, social and governance initiatives and outlined our commitment to making the world a better place through efforts to reduce our environmental impact and contribute in positive ways on important social issues.
For all of these reasons, we are pleased to announce that we have agreed to enter into discussions with the city of Kalamazoo to develop a Community Benefits Agreement (CBA).
Graphic Packaging is committed to working with the city to select members of the steering committee by December 1 of this year and is working towards a proposed agreement for review by the Kalamazoo City Commission by April 2022.
After years of traffic bottlenecks and efforts by many local officials and businesses, Kalamazoo is finally poised to benefit from the federal funding necessary to reconstruct the U.S. 131 interchange located just northwest of downtown Kalamazoo. For more than 25 years, the townships of Kalamazoo, Cooper, and Oshtemo, the cities of Kalamazoo and Parchment, along with Kalamazoo County and our state and federal elected delegations have been having this discussion.
This long-awaited project would give the community – and anyone passing through the north side of Kalamazoo – the ability to get onto U.S. 131 and head south without first going north or without driving through residential neighborhoods or downtown to access West Main Street and connect with U.S. 131 to head south.
As a major employer in Kalamazoo, we at Graphic Packaging recognize our duty to partner with the community when it comes being a good neighbor and we know it is more important now than ever as we work towards the completion of an expansion project.
In Kalamazoo, we are currently in the midst of a $600 million project to build a new mill that will improve the competitiveness of our local operations and help to ensure job security for employees at our Kalamazoo operations for years to come.
Graphic Packaging’s Kalamazoo roots run deep. Our plant on Pitcher Street on the city’s North side has been in operation for more than 100 years, employing generations of Kalamazoo residents.
So, when the company was deciding in 2019 where to invest hundreds of millions of dollars to build a new, state-of-the-art coated recycled board (CRB) machine, Kalamazoo was at the top of the list. The only question was how state and local officials would react to the project, especially with a competing suitor to their south in Ohio.