Graphic Packaging starts up recycled paperboard mill in Waco, Texas

In an earnings call this week to discuss third quarter financials, Graphic Packaging International announced the startup of its recycled paperboard mill in Waco, Texas—a nearly $1 billion project originally announced in February 2023.

The mill produced its first commercially saleable roll of recycled paperboard Oct. 24, with CEO Michael Doss saying that was significantly earlier than planned and a faster startup than the company’s recycled paperboard machine startup at its mill in Kalamazoo, Michigan, in early 2022.

The Atlanta-based packaging company originally targeted a fourth-quarter startup in Waco.

“I could not be more proud of our team, many of whom were part of our team that built our Kalamazoo K2 machine,” Doss said Nov. 4 during the earnings call. “Waco was Graphic Packaging's largest capital investment and extends our economic and quality advantage in recycled paperboard across all of North America.

“Waco is a critical enabler for the consumer packaging we sell, improving surety of supply, reducing waste, allowing us to only offer the highest quality packaging materials and expanding the markets our recycled paperboard packaging can serve. Having Waco in our system gives us competitive advantage that will last for decades.”

The Kalamazoo and Waco mills represent more than $2 billion of capital investment for Graphic Packaging.

The Waco site is expected to reach full production in the next 12-18 months, and Doss said the company has developed an internal fiber-sourcing plan, allowing it to source recovered fiber from its packaging facilities for the Waco mill.

“This is exceptionally clean and very low-cost fiber,” he said.

“By closing the loop between our own manufacturing system scrap and Waco's recovered fiber sourcing, we dramatically reduce overall system waste while simultaneously improving our production economics. And with the inclusion of paper cups in the Recycled Materials Association's recently updated guidelines, a key strategic investment we made at Waco looks even better.”

The Waco mill was designed to have the capability to process up to 15 million paper cups per day, and previous estimates indicate the facility also will consume about 20,000 tons per month of old corrugated containers.

“As cup collection ramps up, Graphic Packaging will play a key role in ensuring this high-value fiber source is put to good use rather than ending up as landfill,” Doss said.

Along with the Waco startup, the company also formally announced the closure of its recycled paperboard mill in East Angus, Quebec—a move announced two years ago as part of Graphic Packaging’s overall mill network optimization strategy. East Angus officially will cease production by Dec. 23.

The East Angus closure follows the closure of Graphic Packaging’s recycled paperboard mill in Middletown, Ohio, and when added to closures announced by other companies, Doss estimates the Waco mill will add “just a couple of percent” to the total recycled paperboard market capacity—about 75,000 tons more than the industry had at the start of 2025.

“As was the case in Kalamazoo, we do not expect the startup of Waco to materially impact recycled paperboard market balance,” he said.

Third quarter 2025 financial results

Overall, Graphic Packaging saw a decrease in earnings in the third quarter of this year.

The company reports $2.19 billion in net sales, down from $2.22 billion in the same period last year, while earnings before interest, taxes, depreciation and amortization (EBITDA) was down 13 percent this quarter, owing to the impact of lower price and volume.

Operating income was $234 million, down from $279 million last year, net income was down to $142 million compared with $165 million last year while volumes were down 2 percent year over year.

“In the fourth quarter, we will take further action to balance production with customer demand, which we expect to have approximately a $15 million impact on EBITDA,” Doss said. These decisions are intended to protect our margin profile and to protect our volume.

“We can't control demand and, lately, we can't predict it any better than our customers or our competitors can. But Graphic Packaging is at a very different place today. With Waco complete, we have the industry's best assets and best cost position. And we have far greater control over our ability to generate free cash flow than we did a year ago.”

Graphic Packaging’s full third-quarter 2025 earnings report can be found online.