Caraustar To Close Reading Paperboard Mill

Atlanta, Georgia, USA, 12 October 2006 -- /PRNewswire/ -- Caraustar Industries, Inc. (NASDAQ:CSAR) today announced the closure of its Reading paperboard mill in Sinking Spring, Pennsylvania.

The Reading mill is a recycled uncoated paperboard manufacturing facility with an annual capacity of 16,000 tons. Caraustar expects to consolidate all of the Reading mill's production into other Caraustar locations, thus increasing capacity use in Caraustar's mill system.

The closure of the Reading mill reflects the company's previously announced plans to achieve greater cost efficiencies throughout its system and to better use capacity. Associated with this mill closure, the company will record a pre-tax charge of approximately USD 1.9 million, of which approximately USD 1.2 million will be non-cash. This rationalization is expected to generate an estimated USD 1.6 million in annual pre-tax savings.

The closure of the Reading mill will affect approximately 26 salaried and hourly employees. Caraustar will provide a comprehensive program of separation pay, benefits coverage, and job assistance to affected employees to facilitate their transition to alternate employment.

Caraustar, a recycled packaging company, is one of the world's largest integrated manufacturers of converted recycled paperboard and is dedicated to providing customers with outstanding value through innovative products and services. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end- use markets: tubes, cores and composite cans; folding cartons; gypsum facing paper and other specialty paperboard products. For additional information on Caraustar, visit at www.caraustar.com.