Graphic Packaging Holding Company (NYSE:GPK) Q4 2022 Earnings Call Transcript

Michael Doss: Yes. I think, look, if you think about that, and I appreciate the question, we really take a look at that 1 million tons we buy as make versus buy and that calculus will change over time based on freight and other things that go into that around some of the places we purchase the paperboard around the globe, particularly if we want to optimize our mill network, which we’ll be able to do once we’re done here with this Waco investment. So I think the biggest thing for driving integration rates up is our organic growth. Every time we grow each year we grow, like we’ve done over the last three, we need more tons next year and we have to have low cost, high quality material paperboard to be able to convert it for our customers.

Our customers really appreciate the vertical integration and they were reminded of how important that was during the pandemic and ultimately through some of the dislocations associated with these supply chain difficulties. So being an integrated supplier to these large brands and these large retailers really helps de-risk their overall supply chain profile. And so it’s an important part of that calculus. Having said that, you got to invest in your converting too, and we’ve done a good job on that over the years. To make sure that you’ve got, good converting plants that are geographically located to where your customers are. We like to say that all packaging is local. And so that, that end conversion has to be done in a way that helps service our customers facilities and plants.

And again, our selection of Waco is, great because we’ve got a 100 converting facilities here in the U.S. and it’s a great location for us to be able to service them geographically, as I mentioned, down into Mexico, the West Coast, back east, and even up into the upper Midwest. So that’s how we think about it, Cleve, why vertical integration is such a key part of our strategy and has been really for well over a decade now.

Cleveland Rueckert: Appreciate it. Thank you very much.

Michael Doss: You bet.

Operator: This concludes the call today and I’ll now turn the call back to Mike Doss, President and CEO for closing remarks.

Michael Doss: Thank you, Elliot. And I do want to thank everybody for joining us for our call today. We’ll look forward to talking to you again towards the end of April with our updated first quarter results. Have a great day.

Operator: Today’s call is now concluded. We like to thank you for your participation. You may now disconnect your lines.