SPRING ICG NEWSLETTER

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Accord Carton Alsip, IL

Accord Carton

Alsip, IL

Accurate Box Co. Inc.

Paterson, NJ

All Packaging Company

Aurora, CO

Climax Manufacturing

Lowville, NY

Colbert Packaging Corp.

Lake Forest, IL

3C Packaging

Clayton NC

Curtis Packaging Corp. Sandy Hook, CT

Dee Paper Box

Chester, PA

Diamond Packaging

Rochester, NY

Disc Graphics, Inc.

Hauppauge, NY

El Paso Paper Box

El Paso, TX

Finn Industries

Ontario, CA

Frankston Packaging

Frankston, TX

Indiana Carton Company

Bremen, Indiana

Metro Packaging & Imaging

Wayne, NJ

Royal Paper Box Company

Montebello, California

Sonderen Packaging Co.

Spokane, WA

Thoro Packaging

Corona, CA

Zumbiel Packaging

Hebron, KY

SPRING ICG

NEWSLETTER

SPRING 2015

SONDEREN PACKAGING AUGUST CELEBRATION MEETING

The August meeting is filled with educational and fun opportunities. Early arrivals have the chance to play golf on Tuesday morning, August 4. Space is reserved for 4 foursomes at the Coeur d’Alene Resort Golf Course. Each foursome will be provided with a forecaddie. The times are 11:00, 11:10, 11:20 and 11:30 and the cost is $190 per person. This cost does not include a typical caddie gratuity of $25 per bag. Please direct any follow up to Keva @ [email protected].

Fly fishing is also available. If interested, you may contact Fly Fishing Orvis Northwest at 208-667-2707 or Lake Fishing Fins & Feathers at 208-667-9304 to schedule your own appointment.

On Tuesday evening, the optional pre-meeting cocktails and hearty hors d’oeuvres will take place at the Coeur d’Alene Resort’s 18th floor penthouse with astounding views of one of America’s most beautiful lakes. Space is limited to ICG members only, suppliers will not be participating in this event commencing at 6:30 PM MDT.

Consultants from Rumpeltes and Lawton (R&L) LLC of Spokane will be running an optional discussion on transition planning taking place on Wednesday, August 5 prior to the Sonderen plant tour. Sonderen was very pleased with the assistance received from R&L during its recent transitional phases. Before the presentation, an informal discussion session will be held.

Members will meet with their respective groups, the successors and potential replacements, who will later be brought together for the presentation. In the event you opt not to attend the 1 ½ hr discussion session, you are still

welcome and encouraged to attend the R&L presentation which will

immediately follow. Even if you are not planning a recent change, life does not always play out as envisioned and events may dictate a transition prior to what is otherwise intended. This event is for everyone and should not be missed if you are available to participate!

Wednesday evening’s cocktails and dinner afloat the Coeur d’Alene River will include a celebration for Mark Sonderen and also Pat Peterson. Pat has been invited to attend in celebration of her retirement and appreciation of her willingness to continue to run the ICG Technical Conferences. It is asked that you please consider and provide any good humor jokes, genuine praise or humor about Mark for a roast.

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PAGE 2 ICG SPRING NEWSLETTER

A LITTLE ABOUT THE MEETING EXIT PLAN CONSULTANTS

Ray Lawton and Ned Rumpeltes have extensive business management backgrounds and are in their fifth year as Rumpeltes & Lawton LLC, a business transition consulting firm. After

Lawton and Rumpeltes retired from their own companies, they decided to join together to help other owners transition out of their business.

As a third generation family, Ray Lawton ran a Spokane-based printing company, Lawton Printing, and also File EZ Folder Inc. It was Lawton’s responsibility to pass the business along to its fourth generation. This challenge is what sparked the interest and desire to help others in similar situations.

Ned Rumpeltes also was running a family business that he acquired from his father called, Inland Pacific Stamp, which he grew through the acquisition of six smaller companies on the West Coast. Rumpeltes too saw that nobody he dealt with had any transition preparations in place, and as a result he was able to buy out businesses due to someone else’s hardship and lack of planning. Rumpeltes sold his business in 2004 to Harwood Heights, Ill.-based Cosco Industries, and Cosco in turn was acquired by North Mankato, Minn.-based Taylor Corp., which Rumpeltes claims is the largest privately –owned printing company in the U.S., with about $2 billion in sales annually.

After Lawton and Rumpeltes stepped away from their business, the duo realized there was a need for transition services so they decided to join together to help other owners create a strategy plan to transition.. Both agree that there are several core questions that come up when someone wants to sell or step down from their business. There are also the social issues which occur in every transition that is not going to a third party. Even when a business is being sold to a third party, social issues most often still do occur. The two do not provide specific answers for their clients, but rather lay out the options and make sure the clients understand them. Rumpeltes and Lawton look forward to meeting ICG Members at the August ICG meeting prior to the tour.

It is being requested that if any fans, friends, or well wishers feel that you would be a good fit for the roastmaster, to please contact the ICG office or Keva. [email protected].

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BOXBOARD NEWS ROUNDUP

RISI paperboard industry news roundup: Mixed paperboard results in 1Q 2015;

Caraustar closes Newark Group merger; GPK acquires Cascades mill/carton assets and Rose City carton plants

By James McLaren, senior editor, RISI/Pulp & Paper Week

US paperboard and folding carton company financial results were mixed in the first quarter 2015 with ongoing challenges in packaged cereal, carbonated soft drinks, and certain frozen food categories. That contrasted with stronger conditions in frozen pizza, craft beer, food service, and tobacco, companies told analysts in conference calls. "In particular, general food packaging in North America remains challenged as consumer preferences have shifted to specialty and fresh alternatives," summed up one executive. "Some end use markets like craft beer and frozen pizza are doing very well. But others like in cereal and soft drink continue to be challenged," another said, also noting strength in pasta. Graphic Packaging (GPK) reported a 6% decline in sales to $1.007 billion compared with a year ago, reflecting divested businesses, with adjusted sales up 5.2% on improved volume/mix and $2.2 million in higher pricing from 2013, offset by unfavorable foreign exchange rates. CEO David Scheible said in an Apr. 23 call with analysts that the first quarter "was nothing new" from the ongoing consumer trends impacting some packaging end uses since late last year. "Consumers are managing spending very closely and buying only what they need and some of their preferences are changing. Fresh and healthier choices along with smaller specialty brands are trends in the market and large US driven beverage companies are having to adjust their

businesses," he told analysts, according to a Seeking Alpha transcript. "Sales on our ongoing businesses increased by about 5% in the quarter and were driven

predominantly by acquisitions, new product launches, and some substrate substitution," Scheible added. The company said it produced 20,000 more tons of paperboard and integrated 20,000 tons of its solid unbleached sulfate (SUS) board, also known as coated unbleached kraft (CUK). With several acquisitions in Europe, GPK expects to ship

150,000 tons of SUS to Europe in 2015, up from 115,000 tons in 2014. MeadWestvaco (MWV) reported its food and beverage volume declined 1% in the quarter from a year ago with certain gains amid "softer overall paperboard packaging markets." The company highlighted liquid packaging and tobacco packaging markets, saying international demand "has held up relatively well. We continue to enjoy very good success in the tobacco market," Exec VP Robert Feeser told analysts. "We positioned ourselves at the highest end of that market, and in a number of the markets that we participate in, China in particular, there is a continued demand for tobacco packaging still moving from soft pack to hard pack."

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Caraustar on Feb. 19 closed the acquisition of The Newark Group after it cleared a US Dept of Justice (DOJ) antitrust review that did not require any divestitures. Caraustar, owned by private equity firm H.I.G. Capital, announced the merger in July 2014. Market sources told RISI that the DOJ was investigating the merger up until early January of this year. Newark Group is owned by DDJ Capital. The deal combined the second and third largest producers of uncoated recycled paperboard (URB) used in tube and core, and other products with total capacity of about 847,000 tons/yr. The new company also produces coated recycled board, gypsum wallboard, and recycled containerboard at 13 US mills that operate 1.16 million tons of capacity. The enterprise value of the purchase has not been disclosed. Moody's estimated Caraustar's 2014 revenues at $745 million and the combination with Newark to increase sales to $1.28 billion. Caraustar added $395 million to an existing term loan to fund the acquisition. The new company also operates dozens of tube and core plants, and paper recycling centers, seven folding carton plants, and other converting operations. Also, Caraustar/Newark combined is the ninth largest recovered paper consumer in North America, based on RISI research. In a December rating action, Moody's noted that Caraustar's debt will nearly double

following the acquisition, and it will need significant synergies to bring its leverage more in line with a B2 rating and return its margins to pre-acquisition levels. "Newark has lower margins than Caraustar, which will initially pressure the margins of the combined company," Moody's added. "The company benefits from vertical integration in the tube and core segment that supports its EBITDA margins as well as from its recycling

operation and adequate liquidity." Axinn, which counseled H.I.G. Capital, and Caraustar, said it secured antitrust clearance with no divestiture or any other remedy required after successfully navigating a more than six-month DOJ investigation, which included a second request, depositions, and meetings with staff. "The DOJ Antitrust Division has significant experience and institutional knowledge in the pulp and paper space," said Axinn, "so there are no shortcuts in these deals."

Graphic Packaging (GPK) on Feb. 6 completed the acquisition of Rose City Printing and Packaging, an operator of two folding carton plants in the Portland, OR, area. GPK also completed the previously announced acquisition of Cascades/Norampac's boxboard assets in Canada, including two mills and three carton plants for about $36 million. The two deals totaled $118 million, GPK reported. The Cascades acquisition included a coated recycled (CRB) mill in East Angus, QC, and a mill in Jonquiere, QC, that makes a hybrid solid bleached sulfate (SBS) grade using thermomechical pulp. The "complex" deal provides a vertically integrated platform of both mills and carton converting in Canada, that will take time to optimize, GPK CEO David Scheible said. "But the

acquisition puts the initial assets in place to capitalize on a geographic region where our participation today is low," he said. The Jonquiere mill has capacity of 159,000 tons/yr and East Angus has capacity of 79,000 tons/yr. The sale includes three folding carton plants in Winnipeg, MB, and Mississauga and Cobourg, ON. GPK's lone Canadian

converting plant is also in Mississauga. The purchase lifts GPK’s share of US-Canada CRB capacity to about 41.6%, according to RISI estimates. Graphic Packaging said that the expansion into Canada gives it about a 34% share of the total CRB market in the US,

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Canada and Mexico. Rose City's carton plants in Vancouver, WA, and Gresham, OR, target the food, nutrition, beverage, and consumer product segments. GPK said the purchase enhances its West Coast footprint, and allows for further integration of its coated unbleached kraft (CUK) and CRB production. In Northern California, GPK operates a CRB mill in Santa Clara, CA, and acquired carton and beverage carrier converter Sierra Pacific Packaging in Oroville, CA, in 2011. Rose City had been acquired by River Associates Investments in 2011 which recapitalized the company in partnership with management in 2012. The company was established as Rose City Paper Products in 1945. The two bolt-on deals added five carton plants to GPK's leading North America carton converting system of 26 facilities. GPK CEO David Scheible said the Santa Clara mill makes a hybrid CRB and CUK board grade targeted for craft beer packaging now enhanced by the Rose City purchase. "We've got a pretty good ecosystem around the Santa Clara board mill out there on the West Coast, which is incredibly important," he told analysts on the company's financial call.

Graphic Packaging (GPK) reviewed changes underway in consumer purchasing habits that are impacting folding carton demand. In an investor presentation, GPK cited changing demographics, particularly the aging baby boomer generation and the rise of millennials, as driving new consumer trends. The younger consumer is different, with "grab-and-go" consumption habits blurring the line of what is a snack and what is a meal. With 47% of all US food spending away-from-home, it is now a routine of most Americans' diets, and includes fresh food, typically not packaged in a carton, the

company showed. Amid the problems large consumer packaged goods (CPG) companies are seeing on the store shelves, GPK CEO David Scheible noted the geographic

expansion of recently-acquired Rose City Printing and Packaging allowed pull-through to GPK's integrated system. "They are in the food business, but they're selling to some of the regional guys, regional people that we don't necessarily see," he said, adding that the acquisitions in Canada and in Europe were providing similar benefits. "But while those guys (CPGs) struggle materially with their volumes, we overall were pretty flat, so what I would say is that as those large consumer goods companies sort of figure out their mojo and change their approach, then we're going to be bullied by that change," Scheible said. The company also said the integration with Cascades is underway and it is looking at optimizing calipers among the combined mills. Cascades produces a bleached paperboard grade using thermomechanical pulp that has not displaced the solid

bleached sulfate (SBS) volumes that GPK buys for its carton system, Scheible added. MeadWestvaco announced Apr. 30 it completed the previously announced sale of its European-based tobacco folding carton business to AR Packaging Group for about $80 million. It includes operations at three facilities in Austria, Poland and Russia, which manufacture and print hinge-lid boxes, display cartons, and high-impact cigarette packaging, as well as folding carton packaging. AR Packaging is a maker of paperboard cartons, flexible packaging, and trays based in Lund, Sweden. The business being sold had annual revenue of about $190 million, which was included in MWV's Food & Beverage segment. The European tobacco carton business accounts for about 6% of MWV's Food & Beverage sales. After a series of acquisitions in the 2000s, MWV has

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pursued a strategy to focus on core packaging assets in recent years and in 2014 sold its Poland-based beauty and personal care folding carton business to ASG. In 2013, MWV sold most of its timberland assets to Plum Creek for $1.5 billion and in 2012 sold its consumer and office products business to ACCO Brands in an $860 million transaction. In 2010, the company sold its media and entertainment packaging business to Atlas Holdings, which later formed ASG, and exited the envelope business with a sale to Cenveo. BMO Capital Markets analyst Mark Wilde said of the tobacco assets sale that MWV has struggled with its European packaging portfolio. "As MWV embarks on a strategy of becoming a pure-play packaging company, our biggest concern is the value destruction in the several packaging companies that MWV acquired since 2000 -- most of these assets were part of MWV's ill-fated 'packaging strategy' during the 2000s," Wilde said. "The list of failed build/buy ventures over the past 15 years should make investors wary about MWV's ability to create sustained value as a packager in the

future. At its heart, MWV is still a 'mill' company, in our opinion, not a packager." Recent developments in the European cigarette market include the UK government's decision to pursue establishing plain packaging for tobacco products, which Australia did in 2012. Last year, cigarette giant Imperial Tobacco moved to close two plants in the UK and France with combined capacity for 57 billion cigarettes per year. The company said the closures reflected "declining industry volumes in Europe, impacted by tough economic conditions, increasing regulation and excise and growth in illicit trade."

US solid bleached sulfate (SBS) folding carton production in 2014 was 0.6% above a year earlier at 2.155 million tons, with a 94.3% operating rate from 97.3% in 2013, according to the American Forest & Paper Association (AF&PA). SBS folding domestic production ended the year 2.3% higher than 2013 while export output dropped 4.8% as US

suppliers face growing competition from offshore capacity expansion. SBS liquid packaging production in 2014 was up 1.3% with domestic output up 5.8% and export down 1.2%. Cupstock production was 5.8% higher for the year and plate/dish/tray was up 6.2%. Total food service production of 3.16 million tons was up 3.5% from 2013 with a total sector operating rate of 97% from 94%. Unbleached kraft folding production for the year rose 1.5% to 2.5 million tons with domestic production off 1% and output for export up 11.5%. Unbleached operated at 97.3% in 2014 from 98.7% in 2013, the AF&PA figures showed. Contacts said the export increase showed greater volumes moving to the UK and Western Europe following Graphic Packaging's acquisitions of carton plants in Europe in 2013.

Colbert Packaging is now operating a new Heidelberg Speedmaster XL 106 printing press at its 109,000 ft2 Elkhart, IN, carton plant, the supplier said. The 40-in offset press can print six-color processes and coat paperboard in a single pass -- using both

conventional and ultraviolet inks, and coatings. Colbert Packaging operates a carton, pressure-sensitive roll label, and inserts operation in Lake Forest, IL.

Dee Paper Box broadened its pressroom capabilities with a new KBA Rapida 145 57-in large-format press at its 100,000 ft2 plant in Chester, PA, near Philadelphia, the supplier reported. Founded in 1919, the carton manufacturer posted 20% growth in 2014 while emerging into higher-end carton production. The firm expects the new press to be

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operating in March. Dee Paper Box caters to predominantly East Coast customers across several industries and market segments, including food and confectionery, health and beauty, and specialty sectors such as pet supplies, automotive, dental, and baby products.

RISI is the leading information provider for the global forest products industry. Headquartered in Boston, MA, RISI operates additional offices throughout North and South America, Europe and Asia.

NEW ICG CLEARWATER REPRESENTATIVE

ROBIN RODGERS; DIRECTOR OF SALES

Clearwater announced a change to Clearwater Paper’s sales structure. Five year ICG Clearwater Representative, Bob Collins will be transitioning into Director of Sales – Foodservice and growing and enhancing the Cup segment. The ICG’s new Clearwater Representative is Robbin Rodgers; Director of Sales. Rodgers is approaching 18 years with Clearwater/Potlatch and his previous roles and responsibilities include Customer Service Representative, Account Executive, Customer Service Manager, Export Sales Manager and ID Paper Machine #1 Business Manager. Bob Collins is confident that Rodgers will be an asset to the ICG and is going to be working side by side to ensure a smooth transition. Rodgers will be based out of Illinois once he relocates from California.

STAPLES CONVENIENCE CARD

The ICG Staples contract includes the use of in-store corporate conveniences cards. This is helpful in the event you need something right away. The card automatically allows members to either receive the in-store sales price or the online ICG Group’s discounted Staples Advantage cost whichever is lower at the time. In addition, the in-store

corporate convenience card, used through the ICG Staples agreement, will realize the standard additional 10% ICG quarterly rebate and should be taken in to account when considering bottom line purchasing costs. If you have not received your Staples

corporate card yet, or need a replacement card, please contact your Staples Advantage Strategic Account Representative, Joel Hintz @ [email protected].

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WESTROCK ANNOUNCED AS NAME OF COMBINED MERGER

MEADWESTVACO / ROCK TENN

RICHMOND, Va., and NORCROSS, Ga., May 18, 2015 (GLOBE NEWSWIRE) -- WestRock Company was announced today by MeadWestvaco Corporation ("MWV") (NYSE:MWV) and Rock-Tenn Company ("RockTenn") (NYSE:RKT) as the name for the new company when the two packaging leaders complete their previously announced combination. WestRock will trade on the New York Stock Exchange under the ticker symbol WRK. "WestRock draws on the strongest elements from each of our legacy names," said Steve Voorhees, who will be the chief executive officer of WestRock Company. "The name speaks to our determination to build on the long track record of success and growth that has been established by both companies. WestRock's aspiration is to be the premier partner and unrivaled provider of winning paper and packaging solutions for our customers."

The pending combination between MWV and RockTenn was announced on January 26, 2015. The companies have received antitrust approval in the United States and are awaiting other regulatory and shareholder approvals that are expected in the month of June.

About WestRock

WestRock Company's (which will trade on the NYSE: WRK) aspiration is to be the premier partner and unrivaled provider of paper and packaging solutions in consumer and corrugated markets. WestRock's 42,000 team members will support customers around the world from more than 300 operating facilities spanning North America, South America, Europe and Asia.

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Upcoming Meetings Hosts & Dates

Independent Carton Group . 153 South Main Street . Newtown . Connecticut . 06470

Phone: 203-270-7578 Fax: 203-270-1578 Email: [email protected]  Please remember to contact the ICG

Office regarding meeting attendance if you have not already done so.

 You do not need to bring recently mailed booklets to the August meeting, Q2’15 books will be provided by the office.

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Sonderen Packaging August 5-6, 2015 Curtis Packaging November 4-5, 2015

Indiana Carton March 9-10, 2016

A memo went out regarding the updated meeting schedule. Please validate your calendar is current.

Upcoming Technical Conferences

Papermaking Process & Characteristics of SBS, CNK & CRB / Difference between FSC & SFI Host: Rock Tenn Stroudsburg Mill, PA

June 10 - 11, 2015

Overall Equipment Efffectiveness Host: Zumbiel

September 16-17, 2015

Information regarding meetings and technical conferences are posted to the ICG Website:

http://www.independentcartongroup.com/ AUGUST 2015 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NOVEMBER 2015 S M T W T F S 1 2 3 4 5 6 7 8 9 3 10 11 12 13 14 15 16 10 17 18 12 19 20 21 22 23 24 25 26 27 28 29 30 31 MARCH 2016 S M T W T F S 1 2 3 4 5 6 7 3 8 9 10 11 12 13 14 10 15 16 12 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31