The Shifting Landscape of the U.S. Pulp and Paper Mill Industry

As foresters and loggers from across the country lament the decline of pulpwood demand, the underlying causes are playing out in adjustments in the pulp and paper mill industry structure across the U.S.

Mill closings have occurred from Canton, North Carolina to Tacoma, Washington. Yet, other mills are opening or reinvesting across the country and globally as companies react to adjustments in demand.

The Lake States have experienced dramatic shifts since 2020. One of the latest ones, a new mill line at the Georgia-Pacific mill structure in Green Bay, Wisconsin is positive for the region and the state of Wisconsin. The company is investing $500 million in a through-air-dried paper machine at its Broadway site in Green Bay.

The new machine will employ 100 additional people next year to manufacture Brawny towels and other products after it opens next year.

Traditional paper products including printing paper and newsprint have experienced dramatically lower demand in the last three decades. But packaging paper has offset much of that loss. In 2023 the printing paper decline continued, according to the American Forest and Paper Association, but growth in packaging paper has slowed as demand flattened. Tissue products are also registering increased demand with population growth.

Another cut in paper-making infrastructure in North America’s central region came with the Sept. 6 announcement of the indefinite closing of the Domtar mill facility in Espanola, Ontario (about 280 air miles North of Detroit or about 500 road miles to get around the Great Lakes). Domtar has had the mill up for sale with little interest.

The company’s communications manager, Bonny Skene told Northern Ontario Business that the mill’s age and maintenance and operating situation made continuing operations “unviable”.

“It’s a specialty paper mill integrated with a kraft pulp mill,” she said. “That introduces complexity, that introduces cost.” The Espanola mill employs about 250 mill workers making 280,000 tons of softwood kraft pulp and 69,000 tons of specialty paper per year.

Some retail shippers like Amazon have pushed to diminish their use of packaging paper by reducing the paper volume of packaging or experimenting with eliminating all packaging from some consumer shipments.

The West Rock moves to underscore the need for flexibility within the industry. The company’s CEO David Sewell pointed out in its announcement of results for the second quarter of 2023, “Closing the mill allows the company to shift investments to projects with greater returns while lowering costs and improving margins. “Our mill portfolio is substantially different than it was 15 months ago,” Sewell said. “The Tacoma closure is part of a larger footprint optimization plan that will shutter underperforming and inefficient plants and shift capacity elsewhere.”

However, the efficiency will impact 400 employees when the Tacoma mill closes at the end of September.