Year begins with notable paper, packaging closures

The past several years have seen a number of paper mills come online, including sites operated by Domtar, Atlantic Packaging, Cascades, ND Paper and Pratt Industries, with more openings to come—most notably, Graphic Packaging’s $1 billion recycled paper mill in Waco, Texas, which is targeted for a fourth-quarter startup.

However, the early months of this year have been marked by downtime and several facility shutdowns, with some analysts expecting more to come throughout the year.

“There have been closures the last couple years because … you only need to make so many boxes,” Chaz Miller, longtime industry professional and member of the Maryland Recycling Network board of directors, said Feb. 17 during the Southeast Recycling Conference in Destin, Florida. “You have all that capacity to make boxes but you’re not going to be able to use it all. So, what's your [solution]? Inefficient mills are being closed.”

At the end of January, Greif Inc., a Delaware, Ohio-based packaging company, announced the planned closures of a paperboard machine in Georgia and a containerboard mill in Massachusetts.

By the end of March, the company will cease production on its No. 1 paperboard machine (A1) at its uncoated recycled paperboard (URB) and specialty converting site in Austell, Georgia. Ceasing production on the A1 machine, a nonintegrated asset for Greif, is a result of increased costs and declining demand in its major furniture, books and binders end markets, according to the company.

Meanwhile, by the end of May, Greif plans to permanently close its containerboard and URB mill in Fitchburg, Massachusetts. The company says a combination of high operating costs and need for “significant capital investment” were the determining factors in the decision to shut the mill.

These moves will reduce Greif’s annual containerboard capacity by 100,000 tons and uncoated recycled paperboard (URB) capacity by 90,000 tons, affecting approximately 140 total jobs.

“We believe strongly in the fundamentals of our business,” Greif President and CEO Ole Rosgaard says. “These strategic actions will refine our participation in the market and help us maximize the profitability of our mill network and our overall business portfolio.”

Elsewhere in the industry, along with the completion of its merger with London-based packaging company DS Smith, International Paper (IP) also has revealed plans to close a number of facilities, most recently the shutdown of a containerboard mill in Campti, Louisiana, that will reduce IP’s annual containerboard capacity by 800,000 tons.

The most recent round of IP closures will include the Red River containerboard; a recycling facility in Phoenix; a box plant in Hazleton, Pennsylvania; and a sheet feeder facility in St. Louis. All sites are expected to be permanently closed by the end of May and will impact approximately 674 employees.

The move is just the latest closure announcement from IP, which announced in November 2024 the shutdown of its fluff pulp mill in Georgetown, South Carolina, as well as the closures of a packaging facility in Kansas City, Missouri; container plants in Statesville, North Carolina, and Cleveland, Tennessee; and a corrugated sheet plant in San Antonio.

IP also revealed late last year plans to lay off 400 employees in its headquarters city of Memphis, Tennessee.

In the fourth quarter of 2024, IP also reports 45,000 tons of economic downtime across its North American containerboard mill system.

According to Bloomberg corrugated market analyst Ryan Fox, the recent global mergers of IP and DS Smith as well as last year’s merger of Smurfit Kappa and WestRock may spark more closures. Bloomberg expects another 1-2 million tons could be taken out of capacity in 2025 as companies look to match supply and demand.

“International Paper is undergoing a transformational journey to become a stronger sustainable packaging solutions company,” the company says in a news release announcing the latest closures. “A critical step in this journey is to streamline IP's footprint to focus investments on facilities that will best serve customers and accelerate strategic initiatives to improve quality, reliability and service delivery.”