Operator
We go to Adam Josephson with KeyBanc. Please go ahead.
Adam Josephson, KeyBanc Capital Markets, Inc.
Good morning, everyone. Happy New Year as well. Just on the capital structure issue. Mark, you are putting about 550 million of debt on chemicals that leaves by my numbers about 800 million for packaging that would be about a little over one times EBITDA, do you expect to bring a leverage ratio higher than that for packaging or what is your target leverage ratio for the remaining entity? You talked about using the proceeds primarily to pay off debt, but given that low leverage ratio, I would think you might consider other alternatives such as a buyback. Can you provide thoughts along those lines?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yes, well, I think the focus is taking the amount of cash that we need to get our debt levels in line that ensure that we will maintain our investment grade credit rating. Likely, when we look to pay those levels of debt down, they are creating that pretty substantial premiums, so there are some premium cost in there as well, but we are not going to look to under lever the business. We want to maintain an appropriate target leverage ratio. That will do enough to maintain our investment grade credit rate?
Adam Josephson, KeyBanc Capital Markets, Inc.
Thanks a lot. I appreciate it.
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yes.
Operator
Our next question is from George Staphos of Bank of America Merrill Lynch. Please go ahead.
George Staphos, Bank of America Merrill Lynch
Thanks. Hi everybody. Good morning. Happy New Year. Good luck with the rest of transaction. Two questions here quickly. The consulting study we are looking at, you have not yet gotten back the results from the study,because you have not even gotten it yet. Do you anticipate that the – here, I am paraphrasing – the right sizing of the business structure will lead to further cost reduction. Is there anyway initially to size that? Then within packaging – you have actually had a pretty good year of catching up to your peers from a profit standpoint. Can you quantify or articulate what is left from your vantage point within home, health and beauty, within food &beverage, with an industrial temporary margin from here. Thank you.
John Luke, Chairman and CEO, MeadWestvaco Corporation
George, let me make a couple of points at the outset and I will turn to Bob and Mark. First of all, this consulting work has begun and we are hard at work during all of these and our focus clearly is on identifying opportunities to achieve greater efficiency as well as define ever further the right approach and the right capabilities to ensure, as Bob noted, the profitable growth strategies that we’ve got for packaging and about which we are very, very excited. As we reinforced over the course of the past year and in this call as well, our focus is not just to catch up, but our focus is to lead the industry with our margin profile as we are putting points on the board with profitable growth, and that’s the nature of this work as well.
Mark? Bob?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
Oh, that’s wellput, John. I would just punctuate the aspect of taking this as a really unique opportunity to step back and look at the organization, design, capabilities, resources, and processes that are required from a stand-alone packaging perspective, not only to continuous on the path that John described for market leading margins in each of the sectors, but actually accelerate our progress. Mark?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
I think you guys captured it well.
George Staphos, Bank of America Merrill Lynch
Okay, so will you be able to quantify future goals, cost-reduction programs, etc etc, on the next earnings call or by what point on should we expect it? Thanks and good luck.
