The long-operating packaging manufacturing plant in Wallula will cut 200 jobs by the end of March 2026 as it permanently shutters part of the facility to cut production costs. 

Packaging Corporation of America (PCA) announced it would shut down its No. 2 paper machine, which has been idled since May, and kraft pulping facilities at the plant on Dec. 3.  

The plant’s No. 3 paper machine and recycled pulping facilities will continue to operate. 

“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, PCA’s chairman and CEO in a statement. “By operating as a single-machine, recycled mill, we will streamline operations at the facility and significantly lower our cost of production, while continuing to produce high quality containerboard for our plants and customers.” 

PCA is the third largest producer of containerboard products in North America. The company operates 10 mills and 92 corrugated product plants and related facilities.  

PCA acquired the Wallula plant in 2013 when it bought the pulp and paper division of Boise Inc. 

The No. 2 paper machine is expected to be fully shut down by the end of March. The move will nearly halve the Wallula plant’s production capacity to 285,000 tons per year of high-performance recycled linerboard and corrugating medium.  

The plant is on track to produce 400,000 tons of product by the end of 2025. 

PCA expects the plant’s new configuration to lower the production cost at the mill by about $125 per ton from 2025 levels due to improved cost structure and utilization rate.  

The lost production capacity will be replaced with production enhancements at other PCA mills beginning in the fourth quarter of 2026.