Partial shutdown of Eastern WA paper plant will cut 200 jobs

Packaging Corporation of America announced a partial shutdown of its Wallula containerboard plant that will cut production by nearly half.

Officials said in a Dec. 4 announcement via Business Wire that the mill is too expensive to operate.

The move will result in 200 layoffs at the plant along the Columbia River in western Walla Walla County, southeast of Pasco.

Lake Forest, Ill.-based PCA said it will permanently shut down its No. 2 paper machine and kraft pulping facilities. It will continue to operate its No. 3 paper machine and recycled pulping facilities at the site.

PCA bills itself as the third largest producer of containerboard products and a leading producer of uncoated paper in North America. It operates 10 mills and 92 corrugated products plants and related facilities.

The Port of Walla Walla lists PCA/Boise as the county’s ninth largest employer with a total of 456 employees.

The net result will reduce the plant’s capacity to 285,000 tons, a reduction of 250,000 tons.

The shutdown will be completed by the end of the first quarter of 2026.

PCA projects the cutbacks will result in pre-tax restructuring charges of $205 million, including $165 million in non-cash impairment and accelerated depreciation charges and $40 million in cash charges associated with canceled contracts and severance pay.

PCA said the move was not a reflection on its workers, but on the mill’s economics.

”We face a challenging and worsening cost environment at the Wallula mill. Wood fiber and purchased power costs are by far the highest in our system, making the currently configured mill no longer competitive,” said Mark Kowlzan, chairman and CEO.

PCA indicated it would move some production to lower-cost facilities where it has invested in production improvements.

Notably, it has about 140,000 tons of new capacity coming online at its mill in Jackson, Tenn., by late 2026.