Fine Paper Continues to Capitulate, is Containerboard the saving grace?
There have been a couple of momentous announcements in the past month that portend what the US paper and paperboard industry of 2025 may resemble.
First, SAICA, from Zaragoza, Spain, has announced their first box plant in the United States. It will be in Hamilton, Ohio, or, greater Cincinnati if you are not familiar with the area. For you pulp and paper history buffs, I remember when the headquarters of Champion International, long ago absorbed by International Paper, was in Hamilton before it moved to Connecticut.
The other momentous announcement is Domtar's quarterly press release, where they essentially capitulated on the fine, or printing & writing, paper business announcing the end of production at Ashdown, Arkansas; Kingsport, Tennessee and Port Huron, Michigan (a specialty mill).
Packaging Corporation of America also has fine paper shutdown all over the place and there are rumors of an imminent conversion to containerboard at Jackson, Alabama.
And then there is Verso--always on life support, they have capitulated at Wisconsin Rapids with no plans at this time by anyone for a future there.
Domtar speaks of containerboard conversions, as does Packaging Corporation of America. The SAICA entry spells another containerboard mill (new or purchased from others?) down the road, too.
For those watching their market shares, these are worrying times--should they build or wait to be absorbed by a bigger player?
Everyone seems to think retail home delivery will continue to drive containerboard and it surely will for a while. But when will this gravy train stop? I am not smart enough to know, but do think it is another half decade away at least.
I do remember, when Pratt announced the Shreveport Mill in 2008 that one analyst said something like, it seems like the Pratt family would have a better place to invest their money than yet another containerboard machine. That was many, many machines ago now.