A major recycled paperboard manufacturer has announced plans to close one of its facilities in Los Angeles this summer, marking a significant shift in the company’s U.S. operations. The closure is part of a broader effort to streamline production and reduce long-term operational costs. Approximately 72 employees are expected to be affected by the move, which is scheduled for completion by June.
The Los Angeles mill has long served as a hub for the production of both coated recycled paperboard (CRB) and uncoated recycled paperboard (URB). Shutting it down will eliminate roughly 50,000 tons of CRB and 22,000 tons of URB capacity from the company’s network. This will effectively end coated paperboard production on the West Coast for the company, signaling a shift in strategic priorities.
Strategic Realignment Across the Recycled Paperboard Sector
The closure is being attributed to high operational costs and limited opportunities for integration within the broader production network. Company leadership views this decision as a necessary step toward improving efficiency and focusing resources on core markets with greater long-term growth potential.
This move follows similar closures in Georgia and Massachusetts, where the company previously shut down other paperboard and containerboard operations. Together, these decisions are projected to impact over 140 jobs nationwide. However, they are part of a cost-reduction strategy aimed at saving $100 million over the next three years, with full benefits expected by the end of 2027.
Economic Pressures Prompt Industry-Wide Changes
The paper and packaging industry is experiencing increased pressure from inflation, shifting consumer behavior, and rising raw material and energy costs. These factors are pushing companies to reassess their facility networks and invest in more profitable and sustainable operations. As demand for recycled paperboard continues to grow—especially in environmentally-conscious markets—companies are looking to optimize production closer to demand centers.
Mill closures, while difficult for affected workers and communities, are becoming a common part of long-term corporate strategies aimed at staying competitive in a challenging economic climate. By cutting excess capacity and consolidating production, companies hope to improve margins while maintaining product quality and customer satisfaction.
Support for Affected Employees
While the announcement has raised concerns among employees and local stakeholders, the company has agreed to offer support for affected staff. Severance packages, career counseling, and job placement assistance are among the services being provided to help ease the transition. Leadership acknowledged the personal and professional toll the closure will have and emphasized their commitment to a respectful offboarding process.
What This Means for Recycled Paperboard Markets
Although the mill shutdown reduces total output, it does not signal a retreat from recycled paperboard production overall. Instead, it reflects a targeted effort to realign operations with market demand. Other facilities in more central locations are expected to absorb production volumes and possibly expand capabilities in the future.
Industry analysts note that the recycled paperboard sector remains a vital part of the circular economy. As packaging companies and brand owners continue to seek sustainable alternatives to virgin fiber products, CRB and URB play an increasingly important role in meeting both environmental goals and regulatory standards.
Key Takeaways from the Los Angeles Mill Closure
- 72 jobs affected – Local workers in Los Angeles will lose employment following the closure.
- Production shift – 50,000 tons of coated and 22,000 tons of uncoated recycled paperboard capacity will be eliminated.
- Cost-cutting strategy – The move is part of a $100 million savings plan through 2027.
- No more West Coast CRB – The company will cease all coated paperboard production on the West Coast.
- Support programs in place – Employees will receive severance and career transition assistance.
Outlook for the Future
While closures are difficult, they often lead to long-term operational improvements. The recycled paperboard industry continues to change, driven by technological advancements, sustainability initiatives, and consumer preferences. Companies that adapt efficiently are better positioned to deliver value to shareholders while meeting the growing demand for eco-friendly packaging materials.
As the market shifts, businesses and communities alike will need to remain agile. For employees affected by mill closures, retraining programs and regional economic development initiatives may offer pathways forward in a changing industrial landscape.