SecProbe.io

CORRESP
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filename1.htm

July 7,
2005

Confidential

Via Electronic
Transmission and Federal Express

Division of
Corporate Finance

450 Fifth Street, N.W

Washington D.C. 20549-0404

Attention:  Ms. Jennifer Hardy

Re:          Graham Packaging Company, L.P.

Amendment No. 1 to Registration Statement on Form S-4

File No. 333-125173

Filed: July 7, 2005

Graham Packaging Holdings Company

Form 10-K for the Year Ended December 31, 2004

File No. 333-53603-03

Filed: March 31, 2005

Dear Ms. Hardy:

On behalf of
Graham Packaging Company, L.P., a Delaware limited partnership (the “Company”) and Graham Packaging Holdings
Company, a Pennsylvania limited partnership (“Holdings”),
I hereby submit their responses to the comment letter of the staff (the “Staff”) of the Securities and Exchange
Commission (the “Commission”)
dated June 20, 2005 (the “Comment
Letter”) with respect to the above referenced Registration Statement
of the Company on Form S-4 (File No. 333-125173) (the “Registration Statement”), including
exhibits, as filed with the Commission on May 24, 2005, and the above
referenced Form 10-K of Holdings, as filed on March 31, 2005.

The Company is
filing, via Edgar, Amendment No. 1 to the Registration Statement (the “Amendment”).  In addition, enclosed herewith are three
copies of the Amendment marked to indicate the changes from the Registration
Statement.

Set forth
below are the Company’s and Holdings' responses to the comments raised in your
letter.  For your convenience, we have
provided each of your numbered comments followed by our response in italics.  All references in this letter to page numbers
and captions correspond to the page numbers and captions in the
Registration Statement.  Page references
are generally not given when the changes appear throughout the Registration
Statement.  References throughout this
letter to “we” and “us” are to the Company.

General

1.         Prior
to effectiveness, please provide us with a supplemental letter stating that you
are registering the exchange offer in reliance on the staff’s position
enunciated in the Exxon Capital Holdings Corporation (May 13,
1988), Shearman & Sterling (July 2, 1993) and Morgan
Stanley & Co. Incorporated (June 5, 1991) no-action
letters.  Also include the supplemental
representations from Shearman & Sterling and Morgan Stanley &
Co. Incorporated.

We will comply with
this comment and provide the Commission with the requested supplemental letter
prior to the effectiveness of the Registration Statement.

2.         Disclose
whether the guarantors will wholly and unconditionally guarantee the notes.

The guarantors will
wholly and unconditionally guarantee the notes and we have made corresponding
revisions to the disclosure in response to this comment.  See page 8.

3.         As
currently represented, the offer could be open for less than 20 full business
days due to the 5:00 p.m. expiration time instead of an expiration time of
midnight on what ultimately may be the twentieth business day following
commencement.  See Question and Answer Eight in Exchange Act Release No. 16623
(March 5, 1980).  Please confirm
that the offer will be open at least through midnight on the twentieth business
day.  See Rule 14d-l(g)(3).

We confirm that the
exchange offer will be open through midnight on the twentieth business day
following commencement of the exchange offer and we have made corresponding
revisions to the disclosure in response to this comment.

4.         Please
confirm supplementally that the expiration date will be included in the final
prospectus disseminated to security holders and filed pursuant to the
applicable provisions of Rule 424.

We confirm that we
will include the expiration date in the final prospectus disseminated to
security holders and filed pursuant to the applicable provisions of Rule 424.

Forward-Looking
Statements, page ii

5.         Please
relocate this section to follow the Risk Factors.

We have revised the
disclosure in response to this comment. See page 25.

Summary, page 1

6.         We
note your summary contains a lengthy description of the company’s business,
competitive strengths and business strategy.
Further, we note the identical disclosure appears later in your
prospectus.  In the summary, you should
carefully consider and identify those aspects of the offering that are the most
significant and

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determine how to best highlight those points
in clear, plain language.  The summary
should not include a lengthy description of the company’s business and business
strategy.  This detailed information is
better suited for the body of the prospectus.
Please revise accordingly.  Please
consider limiting your discussion in the “Our Strengths” and “Our Strategy”
sections to the captions only.  If you
want to highlight key aspects of your business strategy and competitive
strengths, consider listing these in a bullet-point format, with one sentence
per bullet point.  See Item 503(a) of
Regulation S-K and part IV.C. of SEC No. 33-7497.

We have revised the
disclosure in the Summary in response to this comment.  See pages 1-5.

7.         Ensure
that the information you include in your summary is balanced.  To the extent that you continue to cite
competitive strengths in your summary, please review each one and revise as
necessary to provide balancing information.

We have revised the
disclosure in the Summary in response to this comment. See pages 1-5.

Our Company, page 1

8.         We
note the statement that you believe that you are a worldwide leader in the
design, manufacture and sale of technology-based, value-added custom blow
molded plastic containers for branded consumer products.  Please revise these disclosures to specify
the measure upon which you base these statements.  Please also comply with this comment with
respect to your statements in MD&A that you have established yourself as a
leader in the value-added segment . . . , that recently, you
have been a leading participant in the rapid growth of yogurt drinks
. . . and that you are a leading supplier in the personal
care/specialty product category.

We have revised each
of the aforementioned statements as follows in response to this comment:

i)  We have added a reference that our belief
that we are a leader in value-added plastic packaging is based on internal
estimates and rankings published by Plastics News – See pages 2 and 57;

ii) We have added a
reference indicating that, based on research done by Packaging Strategies and
our knowledge of the industry, we have become a leader in the value-added
segment for hot-fill PET juice containers.
The premise for this statement is that, of the top 5 ranked sellers of
blow molded plastic containers, we are the only seller dedicated to
non-commodity products and non-commodity products make up a substantial portion
of the value-added segment referred to in the disclosure – See page 35;

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iii) We have revised
the disclosure to modify the terminology used to describe our participation in
producing containers for yogurt drinks – See page 35.  We also note for the Staff that, as of December 31,
2004, we were the major supplier to one of the world’s leading suppliers of
yogurt drinks; and

iv)   We have revised the disclosure to modify the
terminology used to describe our supply of plastic containers in the personal
care/specialty product category – See page 35.  We also note for the Staff that, as of December 31,
2004, we were a leading supplier to many major suppliers of personal
care/specialty products, including, without limitation, Aveeno, Bath &
Body Works, Dial, Henkel, Jergens, Johnson & Johnson, L’Oreal, Mary
Kay, Playtex, Procter & Gamble, Revlon, Unilever and Victoria’s
Secret.

Risk Factors, page 16

9.         With
respect to the following risk factors, please clearly explain how each specific
risk applies to your company.  For
example, you have previously experienced difficulty servicing your debt,
experienced labor strife that have disrupted your operations, or are any of the
key people planning to retire or nearing retirement age or do you lack
employment contracts with these individuals? Please refer to the following:

•      Our debt
agreements contain restrictions that limit our flexibility in operating our
business

•      Our
international operations are subject to a variety of risks related to foreign
currencies and local law in several countries

•      Our operations
and profitability could suffer if we experience labor relation problems, and

•      Our ability to
operate the Company effectively could be impaired if we lost key personnel.

We have revised the disclosure in these specific risk factors in
response to this comment.  See pages 16-22.

10.       Please
include a risk factor that addresses the potential for material adjustments to
the purchase price of O-I Plastic resulting from the net operating loss
carryforwards allocated to you from the seller and the finalization of the
purchase price.

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We have considered the Staff's suggestion
that a risk factor be added addressing the potential for material adjustments
to the purchase price of O-I Plastic resulting from the net operating loss
carryforwards allocated to us from the sellers and the finalization of the
purchase price.  While the ultimate
amount of net operating loss carryforwards allocated to us from the sellers has
not yet been determined and could have a material impact on the purchase price
allocation, any such determination will not affect the total purchase
price.  In addition, the purchase
agreement related to O-I Plastic contains a stated purchase price of $1,200 million,
which was paid on October 7, 2004, subject to specific adjustments based
on the level of working capital acquired, indebtedness assumed and certain
other measures. We and the sellers resolved these adjustments to the purchase
price in April 2005, resulting in a return to us of $38.9 million which
was recorded on our books as of March 31, 2005.  We do not believe there will be any remaining
material adjustments which will increase the purchase price, and thus do not
believe a risk factor is needed in this situation.

In addition, we have revised certain disclosure in the Management's
Discussion and Analysis of Financial Condition and Results of Operation to
reflect that the determination of the net operating loss carryforwards will not
have an impact on the total purchase price and that we have resolved the
specified purchase price adjustments with the sellers.  See page 49.

Management's Discussion and Analysis of
Financial Condition and Results of Operations, page 35

2004 Compared
to 2003, page 39

11.       Please
disclose which product categories contributed to the net sales increases in
Europe and South America.  Please provide
the same disclosure for the 2003 and 2002 period comparison.

We have revised the
disclosure in response to this comment.
See pages 39 and 41.

Liquidity and
Capital Resources, page 43

12.       Please
disclose whether you anticipate being able to satisfy the specified financial
ratios and tests in your credit facilities.

We have revised the
disclosure in response to this comment. See page 43.

13.       We
note your discussion regarding the non-GAAP measure “covenant compliance
EBITDA.” In a schedule, please provide your reconciliation of covenant
compliance EBITDA to net income as required in Item 10(e) of Regulation
S-K

We have revised the disclosure in response to
this comment.  See page 43.

Contractual Obligations
and Commitments, page 46

14.       Please
revise your table of contractual cash obligations to include estimated payments
under your interest rate swap agreements.
Because the table is aimed at increasing transparency of cash flow, we
believe these payments should be included in the table.  Please also disclose any assumptions you made
to derive these amounts.  If you choose
not to include these payments, a footnote to the table should clearly identify
the excluded items and provide any additional information that is material to
an understanding of your cash requirements.

We have revised the
disclosure to reference the assumptions used to derive the estimated payments
under our interest rate swap agreements in response to this comment.  See Page 46.

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In response to the
first sentence of the Staff’s comment, we respectfully note that the line item “Interest
Payments” in the existing contractual obligation table includes estimated
payments under our interest rate swap agreements as specifically indicated in
the disclosure directly under the contractual obligation table.

Transactions
with Affiliates, page 46

15.       Please
disclose what recourse Graham Engineering has against you should you decide to
buy certain high output extrusion blow molding equipment from another supplier.

We have revised the
disclosure in response to this comment.
See page 46.

Business, page 50

16.       Please
provide a basis for your statement that you are strategically positioned to
benefit from the 60% of the domestic hot-fill food and beverage market that has
yet to convert to plastic.

We have revised the
disclosure to indicate that management believes we are strategically positioned
to benefit from the conversion to plastic based on our knowledge of and
experience within the industry, our innovative technology platform, our focus
on the markets that are likely to convert to plastic and our current market
position.  See page 51.  We further note for the Staff that, according
to independent reports from both Freedonia and Leading Edge Reports, of a total
of 34.2 billion units produced in the hot-fill market, only 13.1 billion units
have been converted to plastic.

17.       Please
provide a basis for your projection of a $100 million cost savings resulting
from your integration of O-I Plastic.

Our projection that
$100 million in cost savings will result from our integration of O-I Plastic is
based on significant work done by our dedicated internal integration team along
with external integration consultants since February 2004.   As disclosed in the Registration Statement,
such cost savings will primarily result from a reduction in selling, general
and administrative costs, consolidation and production improvements and
reductions in capital spending.

18.       You
cite Datamonitor and Plastics News as the source of some of the
statistics.  Please tell us
supplementally whether Datamonitor and Plastics News’ information was prepared
for you or for use in this prospectus, or whether it is widely and publicly
available.  Tell us whether Datamonitor
and Plastics News consented to your use of their information in this
prospectus.  We may have additional
comments upon review of your response.

In response to this
comment, we note that the information in the Registration Statement from both
Datamonitor and Plastics News is widely and publicly available information and
was not prepared specifically for us or for use in this

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prospectus.   We further note that, while we have a
subscription to Plastics News and pay to receive independent surveys conducted
by Datamonitor, we have not sought either of their consents to use their
information in this prospectus.

19.       We
note your statement that a considerable portion of industry capacity comes from
in-house packaging operations of major beverage companies.  Please discuss the effect, if any, this state
of affairs may have on your competitive position.

In light of the
Staff’s comment, we have removed this statement because we do not compete with
the in-house packaging operations of major beverage companies since we do not
produce plastic containers for carbonated beverage and water products and thus
do not believe the statement is useful for investors.

Competition, page 57

20.       Please
place your competitive position in context by disclosing the market share
percentage you have of each market in which you participate to the extent
known