Packaging Corporation of America (PCA) has outlined plans to permanently close one of its paper machines and its kraft pulping operations at the Wallula containerboard mill in Washington State.
The No 2 paper machine (W2) will be taken out of service.
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The No 3 paper machine (W3) and recycled pulping operations will remain in use, with capacity to produce 285,000t a year of recycled linerboard and corrugating medium.
The move is due to be completed by the end of the first quarter of 2026, with the changes to trim the mill’s annual capacity by 250,000t.
The W2 machine, which can produce 140,000t of corrugating medium annually, has been idle since May 2025.
PCA expects the Wallula site to turn out 400,000t of containerboard in 2025.
The revised operating set‑up will reduce production costs by $125 per tonne from 2025 levels, citing an improved cost base and higher utilisation.
PCA plans to compensate for the 250,000‑tonne reduction in Wallula’s capacity through production gains at other mills in its network, starting in the fourth quarter (Q4) of 2026.
The restructuring is projected to result in a pre‑tax charge of $205m, largely recognised in Q4 2025 and Q1 2026.
This would comprise roughly $165m in non‑cash impairment and accelerated depreciation, along with $40m in cash expenses related to contract termination, severance and other costs.
The company anticipates a workforce reduction of around 200 roles.
PCA makes containerboard products and uncoated freesheet paper.
It runs ten mills and 92 corrugated products plants and associated facilities across its network.
