About Packaging Corporation of America

Packaging Corporation of America (PCA) operates as a producer of containerboard products and a leading producer of uncoated freesheet (UFS) paper in North America. The company operates eight mills and 89 corrugated products plants and related facilities. The company operates primarily in the United States. Segments The company operates through three segments: Packaging, Paper and Corporate, and Other. Packaging Packaging Products This segment’s containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. The company’s corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, the company is a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. The company’s products are sustainable and are produced from renewable raw materials, predominately using energy derived from biogenic fuels in its production processes and are recyclable at end-of-life. During the year ended December 31, 2022, the company’s Packaging segment produced 4.6 million tons of containerboard at its mills. The company’s corrugated products manufacturing plants sold 63.4 billion square feet (BSF) of corrugated products. As part of its renewable virgin fiber sourcing efforts, the company participates in the Sustainable Forestry Initiative (SFI), the Programme for the Endorsement of Forest Certification (PEFC), as well as the Forest Stewardship Council (FSC), and it is certified under their sourcing and chain of custody standards. These standards are aimed at ensuring the long-term health and conservation of forestry resources. The company is committed to sourcing wood fiber through environmentally, socially, and economically sustainable practices and promoting resource and conservation stewardship ethics. Energy Supply: Energy at the company’s packaging mills is obtained through self-generated or purchased fuels and electricity. Fuel sources include by-products of the containerboard manufacturing and pulping process (including black liquor and wood waste), natural gas, purchased wood waste, and other purchased fuels. Each of the company’s mills self-generates process steam requirements from by-products (black liquor and wood waste), as well as from the various purchased fuels. The process steam is used throughout the production process and also to generate electricity. In 2022, the company’s packaging mills consumed about 80 million MMBTUs of fuel to produce both steam and electricity. Of the 80 million MMBTUs consumed, about 63% was from mill-generated biogenic fuels that are by-products of the company’s containerboard manufacturing and pulping process and 37% was from purchased fuels. Of the purchased fuels, 73% was from natural gas, 25% was from purchased wood waste and 2% was from other purchased fuels. Chemical Supply: The company consumes various chemicals in the production of containerboard, including caustic soda, starch, sulfuric acid, soda ash, and lime. Most of the company’s chemicals are purchased under contracts, which are bid or negotiated periodically. Sales, Marketing, and Distribution The company’s corrugated products are sold through its direct sales and marketing organization, independent brokers, and distribution partners. The company has sales representatives and a sales manager at most of its corrugated manufacturing operations and also has corporate account managers who serve customer accounts with a national presence. Additionally, the company’s design centers maintain an on-site dedicated graphics sales force. In addition to direct sales and marketing personnel, the company utilizes new product development engineers and product graphics and design specialists. These individuals are located at both the corrugated plants and the design centers. General marketing support is provided at the company’s corporate headquarters. The company’s containerboard sales group is responsible for linerboard and corrugating medium order processing and supply to its corrugated plants, to outside domestic customers, and to export customers. These personnel also coordinate and execute all containerboard trade agreements with other containerboard manufacturers. Containerboard produced in the company’s mills is primarily shipped by rail or truck. The company’s corrugated products are delivered by truck due to its large number of customers and their demand for timely service. The company’s corrugated manufacturing operations typically serve customers within a 150-mile radius. Customers The company sells containerboard and corrugated products to approximately 15,000 customers in approximately 31,000 locations. About 70% of the company’s corrugated products sales are to regional and local accounts, which are broadly diversified across industries and geographic locations. The remaining 30% of the company’s corrugated products customer base consists primarily of national accounts that have multiple locations and are served by a number of PCA plants. Competition On a national level, the company’s primary competitors are International Paper, WestRock Company, and Georgia-Pacific LLC. Paper This segment is a leading producer of UFS in North America, according to industry sources and its own estimates. The company manufactures and sells papers, including both commodity and specialty papers, which may have custom or specialized features, such as colors, coatings, high brightness, and recycled content. The company’s papers consist of communication papers, including cut-size office papers, and printing and converting papers. The company’s products are sustainable and are produced from renewable raw materials, predominately using energy derived from biogenic fuels in its production processes and are recyclable at end-of-life. Facilities The company has one paper mill located in International Falls, Minnesota that produces both commodity and specialty papers on two paper machines. The mill has the capacity to produce approximately 500,000 tons annually. Sales, Marketing, and Distribution The company’s papers are sold primarily through its sales and marketing organization. The company ships to customers both directly from its mills and through distribution centers and a network of outside warehouses by rail or truck. Customers The company has about 40 customers in approximately 150 locations. These customers include office products distributors and retailers, paper merchants, and envelope and other converters. The company has established long-term relationships with many of its customers. ODP Corporation (ODP) along with its subsidiaries and affiliates, is the company’s largest customer in the Paper segment. Competition The company’s largest competitors include Domtar Corporation, a division of Paper Excellence, and Sylvamo Corporation. Corporate and Other This segment includes corporate support staff services and related assets and liabilities. This segment also includes transportation assets, such as rail cars and trucks, which the company uses to transport some of the company’s products to and from its manufacturing sites, and assets related to a 50% owned variable interest entity, Louisiana Timber Procurement Company, L.L.C. (LTP). History Packaging Corporation of America was founded in 1867.