Packaging Corporation of America (PCA) reported that its $5.2 billion in capital investments over the past decade are reinforcing energy resilience and supporting nearshoring initiatives, CEO Mark W. Kowlzan stated at the Bank of America Securities 2026 Global Agriculture and Materials Conference on February 26 in New York. The investments include the installation of gas turbines at mills in Virginia, Alabama, and Louisiana to reduce reliance on the electric grid, along with upgrades following PCA's acquisition of Greif's containerboard business. These measures position PCA to capitalize on nearshoring trends and a stabilizing pricing environment.
Background
PCA has invested $5.2 billion in its mills and box plants over the last ten years, a level of capital intensity above many industry peers, Kowlzan said, emphasizing the company's sustained reinvestment strategy. In September 2025, PCA acquired Greif's containerboard operations for $1.8 billion, adding mills in Massillon, Ohio, and Riverville, Virginia.
Details
January and February 2026 corrugated shipments increased, with January up 4.5 percent per day year-over-year and February up 3 percent through the third week. Strong booking levels persisted despite approximately $6 million in costs from winter storm disruptions impacting the Counce, Tennessee, and Riverville, Virginia mills. PCA announced a $70 per ton containerboard price increase set for March 1, reflecting industry-wide pricing shifts amid capacity reductions.
Kowlzan detailed energy projects to install three 50-megawatt natural gas turbines at Riverville, Virginia; Jackson, Alabama; and DeRidder, Louisiana. The engineering capital for these initiatives is estimated at $250 million over the next 30 months. Board approval is targeted for early 2026, with most spending projected in 2027-2028. Kowlzan highlighted the need to mitigate volatility in electricity costs, noting an 89 percent increase in Washington State electricity rates over two years.
On supply chain trends, Kowlzan noted that nearshoring is advancing, though reshoring manufacturing will require time. He indicated that clear support from state and federal governments could accelerate domestic corrugated product manufacturing.
Outlook
PCA's operational ramp-ups, pricing actions, and investments in energy independence leave it well-positioned to benefit as nearshoring activity grows and demand stabilizes. Key developments ahead include implementing price increases and advancing turbine projects following board approval.
