Packaging Corp to shutter Washington facility, cutting 200 jobs and incurring $205 million charge
Packaging Corporation of America will close its Washington facility, cutting 200 jobs and incurring a $205 million charge. The reconfiguration at the Wallula mill aims to reduce production costs by $125 per ton and cut 250,000 tons of annual capacity, with enhancements at other mills planned for late 2026. The decision follows lower-than-expected third-quarter profits due to high costs and subdued demand.
Dec 3 (Reuters) - Packaging Corporation of America (PKG.N) said on Wednesday it will shut down a facility in Washington, resulting in $205 million in charges and a reduction of around 200 employees.
The Lake Forest, Illinois-based company, which provides paper and packaging products, said the reconfiguration actions at its containerboard mill in Wallula are expected to be completed by the end of the first quarter of 2026.
The actions will result in a reduction of $125 per ton in costs of production at the mill, the company said, alongside a reduction of 250,000 tons of annual production capacity, which Packaging Corp aims to replace with production enhancements at other mills beginning in the fourth quarter of 2026.
“We face a challenging and worsening cost environment at the Wallula mill,” said CEO Mark Kowlzan.
Packaging Corp reported third-quarter profit below expectations in late October, pulled down by subdued demand and higher costs of operating and raw materials.
The company, which employed about 15,400 employees as of 2024, in July said it would buy the containerboard business of peer Greif (GEF.N) for $1.8 billion.
