Packaging Corp Of America (NYSE: PKG)

Packaging Corporation of America is the third largest producer of containerboard products and a leading producer of uncoated freesheet paper in North America. The company operates ten containerboard mills and 91 corrugated products plants and related facilities. It produces approximately 5.8 million tons of containerboard capacity and about 500,000 tons of paper capacity annually. Headquartered in Lake Forest Illinois, the company conducts all of its manufacturing and sales activities within the United States. As of December 31, 2025, it employed approximately 16,800 people, including 4,600 salaried and 12,200 hourly workers. The company places a strong emphasis on safety, maintaining a robust occupational health and safety management system to prevent accidents and ensure an injury free environment.

Packaging Corporation of America generates revenue by selling containerboard, corrugated packaging products, and uncoated freesheet paper to industrial and consumer customers. Its containerboard mills produce linerboard and corrugating medium that are used to make corrugated boxes and other protective packaging. The corrugated plants convert these materials into shipping containers, retail displays, honeycomb protective packaging, and specialized packaging for meat, fresh fruit and vegetables, processed food, beverages, and industrial goods. The paper mill manufactures commodity and specialty office papers that are sold to distributors, retailers, and converters. Revenue is derived primarily from direct sales through a network of local sales teams at most plants, national account managers for customers with a nationwide presence, and design and structural engineers who support sales efforts. The company also uses regional design centers and a rotogravure printing operation to provide marketing and technical assistance. Containerboard is sold both to the company’s own corrugated plants and to outside domestic and export customers. The Greif Acquisition added two containerboard mills and eight sheet feeder and corrugated plants to the packaging segment in September 2025.

The company operates through the following segments: Packaging, Paper, and Corporate and Other.

• Packaging: This segment produced 5.2 million tons of containerboard and sold 71 billion square feet of corrugated products in 2025. It operates ten mills with total capacity of about 5.8 million tons and 91 corrugated plants that manufacture shipping containers, retail displays, honeycomb protective packaging, and specialized packaging for meat, fresh fruit and vegetables, processed food, beverages, and industrial goods. The Greif containerboard business adds approximately 800,000 tons of annual capacity and eight sheet feeder and corrugated plants located across the United States. The segment emphasizes sustainable production using biogenic fuels and recycled fiber, with recycled fiber representing 22% of containerboard input in 2025.

• Paper: This segment produced 484 thousand tons of uncoated freesheet paper in 2025 from a single mill with capacity of approximately 500,000 tons per year. It offers commodity and specialty grades including cut size office papers, printing and converting papers, and papers with custom colors, coatings, high brightness, or recycled content. The mill uses biogenic fuels for about 74% of its energy needs and participates in SFI, PEFC, and FSC certification programs. Its largest customer is ODP Corporation, which accounted for 58% of paper segment sales and 4% of total revenue in 2025.

• Corporate and Other: This segment includes corporate support staff, transportation assets such as rail cars and trucks used to move products between facilities, and a 50% owned variable interest entity called Louisiana Timber Procurement Company L. L. C. It also encompasses the company’s code of ethics, investor relations, and other administrative functions that support the operating segments.

Packaging Corporation of America holds the third largest containerboard production capacity in North America and is a leading producer of uncoated freesheet paper in the region. According to industry sources, corrugated products are produced by about 370 U. S. companies operating approximately 1,080 plants. Its primary competitors in the packaging sector are International Paper, Smurfit WestRock, Georgia-Pacific LLC, and Pratt Industries. In the paper sector, the company faces competition from Domtar Corporation, Sylvamo Corporation, and various foreign producers that benefit from lower production costs. Competitive advantages stem from its integrated mill and plant network, focus on regional and local customer service, and sustainable production practices that use biogenic fuels and recycled fiber. The company’s scale allows it to invest in technology and maintain long term raw material contracts while its proximity to customers reduces transportation costs.

The company serves approximately 12,000 packaging customers located in about 27,000 locations across the United States, with no single account representing more than 10% of segment sales. End-use markets for its corrugated products include food, beverages, and agricultural products (40%), retail and wholesale trade (29%), chemical, plastic, and rubber products (11%), paper and other products (10%), and miscellaneous manufacturing (10%). Its paper business has roughly 50 customers in around 180 locations, the largest of which is ODP Corporation, which accounted for 58% of paper segment sales and 4% of total revenue in 2025. Paper customers consist of office products distributors and retailers, paper merchants, and envelope and other converters. The packaging customer base is broadly diversified across industries and geographic regions, with about 70% of corrugated sales to regional and local accounts and the remaining 30% to national accounts.