Establishes integrated paperboard packaging company to capture growing demand in China

Graphic Packaging Holding Company today announced that through its Japanese subsidiary, Graphic Packaging International Japan Limited, the Company signed an agreement in March of this year with Hung Hing Printing Group Limited (HK:450: news, chart, profile) to jointly invest in an integrated paperboard packaging business in China.

Under the agreement, a new joint venture company, Graphic Hung Hing Packaging (Shanghai) Company Limited, has been formed and is based in Shanghai to provide beverage packaging and packaging machinery to beverage companies in China. The new company began operations in September 2008.

"As a world leader in beverage packaging, Graphic Packaging has significant global reach and an expanded portfolio of innovative paperboard packaging, multi-wall bag, labels, flexible packaging and specialty packaging solutions to support our global beverage customers, who are marketing in China. The market in China is expected to grow substantially and our long-term strategy includes participating as a leading supplier to our existing customers and further developing a strong customer base there. By establishing a joint venture with Hung Hing, a very well-respected and successful company in China, we will build a stronger foundation together upon which to implement our mutual strategies," said David W. Scheible, President and Chief Executive Officer, Graphic Packaging Holding Company.

"We are very pleased to establish this joint venture with Graphic Packaging International Japan, a business partner of ours for more than ten years. This new partnership will enhance our packaging capability and ensure we are well-positioned to capture opportunities, particularly in the food and beverage market, created by the rapidly growing Chinese economy," said Mr. Mathew Yum, Managing Director of Hung Hing.

"We appreciate that Hung Hing is a long-established and successful company in China. We are excited to combine our unique beverage packaging strengths with Hung Hing's business expertise and high value printing services to enhance both companies' strong relationships with global customers," said Mr. Takashi Sugiyama, President of Graphic Packaging International Japan.

The market for beverage packaging in China is expected to expand significantly as the economy grows and individual incomes continue to rise. Graphic Packaging International Japan estimates that demand for multi-pack beverage packaging in China will grow to approximately 15,000 tons of paperboard by 2010, around 7 to 8 times the 2007 figure.