A Packaging Corporation of America mill that uses recycled fiber will suspend operations for two months as the coronavirus pandemic keeps schools and businesses closed.
Packaging Corporation of America (PCA) on April 1 announced it will idle its two paper machines and the converting operation at its Jackson, Ala. mill beginning next month. The company anticipates restarting the machines in early July.
The Jackson mill produces multiple types of printing and writing paper, including office paper made from recycled fiber, under the Boise Paper brand. The mill purchases recovered fiber and pulp from multiple suppliers through contractual agreements, according to a PCA financial report.
The two months of downtime will reduce paper production by about 70,000 tons, PCA estimates. A company spokesperson declined to comment on the implications for recovered fiber use, citing a quiet period in the lead-up to the company’s quarterly earnings report later this month.
In a press release, a company official cited “unprecedented market conditions” brought on by measures to combat the coronavirus, leading to a demand decrease for the mill’s products.
“Due to the effects of the COVID-19 virus pandemic on paper consumption in schools, offices and businesses it’s critical that we balance the supply of our Boise Paper products with our customers’ demand for them,” said Paul LeBlanc, vice president of Boise Paper, in the release.
The idling of the mill means a temporary layoff of roughly 340 employees, according to the company.
PCA is a major end user of recovered paper in the U.S. The company in 2019 purchased roughly 790,000 tons of recovered fiber for use in its mills, according to a company filing. PCA uses recovered fiber as a feedstock at five of its six containerboard mills and at both of the company’s paper mills, including the Jackson plant.
The other paper mill is located in International Falls, Minn., and PCA plans to continue operating that facility at capacity during the Jackson downtime.
A PCA containerboard mill in Wallula, Wash. recently planned significant new capacity for OCC processing.
