Provider of packaging services, Greif, Inc. (GEF), intends to expand its sheet- feeding network capacity which will include the addition of a second technologically advanced corrugator at South Eastern packaging in Concord, NC, by mid-2015.
The second corrugator at Southeastern Operation will comprise several proprietary technologies developed in these locations. The new expansion will strengthen Grief’s position to offer differentiated product and service value proposition to customers and optimize overall portfolio.
Greif has made strategic investments over the last few months in its Ohio, Michigan and Kentucky operations to add new capabilities and expand capacity. The expansion of South Eastern packaging is consistent with its strategy to revive the paper packaging business through continued investment, which will facilitate intensified value proposition as it capitalizes on the expansion at Containerboard mill in Riverville, VA.
Containerboard mill in Riverville, VA, which is nearby the Southeastern packaging Operation, also went through significant improvements in Dec 2013. The expansion comprised enhancement of all sections of the machine, to improve product quality, reduce costs and increase capacity.
Despite adverse weather conditions, Greif’s Paper Packaging segment posted sales improvement of 5.4% year over year in second-quarter fiscal 2014 (ended Apr 30, 2014). The segment also reported a record adjusted operating profit of $26.5 million, up 3.1% from the year-ago period driven by higher selling prices.
For fiscal 2014, Greif trimmed Earnings before interest, taxes, depreciation and amortization (EBITDA) guidance in the range of $475 million to $505 million from the previous band of $490 million to $540 million. Excluding timberland gains of around $20 million or 20 cents per share, earnings per share was also lowered to the new band of $2.48 to $2.80 from $2.60 to $3.15.
However, continual strategic investments and anticipated gradual global economic recovery should result in moderate sales and volume improvement.
Delaware, OH-based Greif manufactures and sells industrial packaging products, bulk containers, and containerboard and corrugated products worldwide. The company provides services such as blending, filling, packaging and recycling of industrial containers for a wide range of industries. Greif also manages timber properties in North America and offers land management consulting services.
Greif currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector include Crown Holdings Inc. (CCK), Graphic Packaging Holding Co. (GPK) and Sonoco Products Co. (SON). All of these companies hold a Zacks Rank #2 (Buy).
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