ATLANTA - WestRock Company (NYSE:WRK), a leading provider of sustainable paper and packaging solutions, has declared its intention to construct a new corrugated box manufacturing plant in Pleasant Prairie, Wisconsin. This move is aimed at addressing the increasing customer demand within the Great Lakes region. The company plans to shut down its current facility in North Chicago upon the completion of the new plant.
The investment, estimated at around $140M, is part of WestRock's strategy to enhance its production capabilities and improve cost efficiency in the region. The costs are expected to be partially defrayed by the sale of property.
David B. Sewell, CEO of WestRock, emphasized that the new state-of-the-art corrugated converting facility is set to elevate the company's production capabilities, align with its end market strategy, and contribute to margin improvement targets. He expressed confidence that such initiatives would reinforce WestRock’s position as a preferred supplier.
The upcoming facility is designed to support reduced manufacturing costs and waste, which will improve WestRock’s overall manufacturing cost profile. The plant will also aim to boost sustainability by lowering energy use and incorporating new technologies. Enhanced digital capabilities are expected to provide real-time data, improving decision-making and minimizing unplanned downtime. Additionally, the plant will focus on improving product quality and customer satisfaction through advanced automation.
The facility is slated to serve a diverse range of key end markets in the Great Lakes area, including retail, distribution, processed food, industrial, and protein businesses, among others.
Construction of the new plant is scheduled to commence in 2024, with the anticipated completion date set for 2025.
WestRock's commitment to sustainable practices is reflected in its global operations, which support customers across North America, South America, Europe, Asia, and Australia.
The information in this article is based on a press release statement. WestRock has cautioned that forward-looking statements involve risks and uncertainties and that actual results may differ materially from those projected. The company has outlined these risks in its filings with the Securities and Exchange Commission.
InvestingPro Insights
As WestRock Company (NYSE:WRK) gears up to enhance its production capabilities with a new corrugated box manufacturing plant, investors and stakeholders are closely monitoring the company's financial health and market performance. According to recent data from InvestingPro, WestRock's market capitalization stands at $10.25B, reflecting its significant presence in the paper and packaging industry. While the company's revenue for the last twelve months as of Q4 2023 has seen a decline of 4.45%, the gross profit margin remains robust at 17.63%. This indicates that despite revenue contraction, WestRock is maintaining profitability in its operations.
InvestingPro Tips suggest a mixed outlook: WestRock is not profitable over the last twelve months, but analysts are optimistic, predicting profitability for the current year. Moreover, the stock has experienced a strong return over the last three months, with a 19.27% price total return, and an even larger uptick over the last six months at 33.72%. This performance could signal investor confidence in the company's strategic initiatives and long-term growth prospects. It's also noteworthy that WestRock has a legacy of maintaining dividend payments for 30 consecutive years, with a current dividend yield of 3.03%, which could appeal to income-focused investors.
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