In 1856, tall top hats were the height of fashion for men. Two English gentlemen in the hatter trade, Edward G. Healy and Edward E. Allen, resolved to find a material that would maintain the tall shape, yet was flexible to fit individual noggins. The solution they arrived at was to form paper into pleats, giving it a wavy shape for strength. They fed paper through a very simple hand-cranked machine that had two intersecting fluted rollers, typically used to create ruffled fabric, such as on collars or cuffs. They patented the invention in England, but never made the leap to using their invention to create a shipping box.

American ingenuity was behind the next step forward in the form of a US patent filed in 1871 by Albert L. Jones for “an improvement in paper for packing,” which described the use of “corrugated or crimped sheet of paper to one side of which is attached a flat sheet of paper by pasting” to create an effective cushion for the contents being packed. A common use was to wrap the corrugated paper around fragile items such as bottles or kerosene lamp chimneys.

Three years later, a machine was developed for producing large quantities of corrugated material. That same year, another inventor, Oliver Long, added a liner sheet to the second side, trapping the corrugation in the middle and producing the corrugated material we know today. In 1894, the first corrugated box was manufactured in the US. The cheaper product quickly replaced the previously dominant wooden crates and boxes used to ship products.

Corrugated’s Long Boom

For the past decade, the corrugated packaging sector has stood apart from the ups and downs of the broader general commercial print industry. Corrugated production surged before, during, and after the Covid pandemic shutdown. Every click by an online shopper echoed down the supply chain to a box converter, corrugated sheet production line, kraft linerboard mill, and yes, even to the loggers bringing in the raw timber for pulp. Business was good, which drove a steady stream of mergers and acquisitions.

As we observed as far back as 2015, the transactional activity in the manufacturing of boxes of all sorts was brisk, unlike its troubled cousin, commercial printing. Not only was the box far less susceptible to disruption by the transition of content to online sources, but the inherent recurring nature of packaging production also made the entire box supply chain desirable for investment. (See The Target Report: The Box is in Demand – October 2015.)

Three years later, we chronicled how the sector shed its image as a mature commodity business. At that time, the CEO of DS Smith (now merged into International Paper), commenting on the company’s acquisition, exclaimed that the corrugated segment was “an exciting and fast-paced environment where we are experiencing strong momentum.” (See The Target Report: Corrugated Gets Glam - May 2018.)

The enthusiasm for the corrugated box business continued unabated at the local supplier level with consolidators such as Welch Packaging. The company executed one acquisition after another in its laser-focused campaign of acquiring family-owned corrugated box companies. (See The Target Report: Catching the Wave in Corrugated Cartons – February 2020.)

The Covid pandemic certainly did not cool acquirers’ ardor for the corrugated business. In a classic bidding war that played out globally in the public markets, International Paper announced in April 2024 that it had prevailed over Mondi in the competition to land DS Smith. The industry was in a full-scale frenzy of roll-ups and consolidation plays. (See The Target Report: Corrugated Consolidation – June 2024.)

Corrugated Sheet and Box Producers Hit the Brakes

Now the story has turned. The Wall Street Journal reported in September 2025 that U.S. box shipments had fallen to their lowest levels since 2016 and that nearly nine percent of domestic containerboard capacity had gone offline within eight months. The Journal article stated that this was an unprecedented and sudden decline that represents roughly twice the capacity lost during the 2009 recession. The M&A and plant closure data from October confirms what many operators already feel: the corrugated market has entered an uncompromising correction phase. In October, corrugated producers announced the closure of four plants.

Georgia-Pacific is closing its corrugated box production facility in Mt. Olive, Illinois. This follows the company’s closure of its large containerboard mill in Cedar Springs, Georgia, announced in May 2025.

Smurfit-Westrock, headquartered in Ireland, announced the closure of a corrugated sheet & box production facility in the City of Industry in California. The company has been aggressively downsizing since Smurfit acquired Westrock in July 2024. The CEO noted that subsequent to the merger, the company has shed 4,500 employees and closed mill capacity of 500,000 tons of containerboard and consumer board grades. However, it is not all gloom and doom about the corrugated business at Smurfit-Westrock; the company recently announced that it would invest nearly $19.3 million in its Saltillo, Mississippi operation over the next year, expanding its production of corrugated cases, boxes, and trays.

Packaging Corporation of America (PCA) announced the closure of two corrugated sheet & box production facilities, one in Allentown, Pennsylvania, and the other in Salisbury, North Carolina. This follows the company’s earlier announcement this year that it would close its corrugated box manufacturing facility in East Point, Georgia.

As we previously reported, it was only a week after their respective shareholders had separately approved the sale of DS Smith to International Paper that International Paper announced the closure of six facilities. (See The Target Report: Paper Industry Transformation Moves Forward – October 2024.) Shortly after the deal closed on January 31, 2025, the drumbeat of plant closure announcements resumed. A total of eighteen plants have closed since International Paper won the bidding war for DS Smith.

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Rationalization, Not Retreat

It would be a mistake to read the current downturn as existential for the corrugated business. The corrugated sector remains indispensable, but it is adjusting after a decade of relentless consolidation. The closures announced in October and over the past year represent the squeezing out of redundant and less efficient facilities. The combination of Smurfit with Westrock, each in itself the result of a series of mergers, and International Paper’s purchase of DS Smith were both huge deals, bringing together extensive networks of mills and production facilities. Such large deals are bound to require rationalization of facilities to eliminate redundancies. The surprise is not that these two behemoths are closing facilities; rather, it is the magnitude and scope of the reductions that tells us that the company’s leadership teams perceive soft underlying market conditions in addition to the need to rationalize their production networks.

The Wall Street Journal has hypothesized that the corrugated market is a harbinger of the state of the larger economy. As demand for corrugated sheet has retreated to the lowest levels since 2016, some see this as an indication that we are headed into a recession. Among other reasons, trade tensions have led to a decline in exports, thereby reducing demand. The housing market has been softer, resulting in reduced new purchases of appliances and furniture that require a lot of corrugated packaging. These and other trends find their way up through the supply chain, reducing demand for packaging.

Another theory for the dramatic reduction in demand for corrugated is that the big e‑commerce companies are revising their shipping processes, reducing box size, shipping more items in paper and plastic envelopes, and avoiding box-in-a-box packing. On-demand box-making machines that customize each box to the exact required size also reduce the use of packaging materials.

A Month of Mixed Signals

In contrast to all the plant closures in corrugated products, adjacent paper-based segments are holding their own. ProAmpac’s purchase of International Paper’s bag converting operations extends its sustainable-materials portfolio. Cascades sold its Cascades Flexible Packaging business to Texas-based Five Star Holding, which takes Cascades out of the printed plastic packaging and films business, allowing greater focus on its fiber-based businesses. The paper recycling business consolidated further with FV Recycling, a Mississippi-based portfolio company of Jones Capital, as it acquired Mid America Paper Recycling, a Chicago-based company.

At the level of the local box manufacturer, the aforementioned Welch Packaging added another notch to its belt. In October, Welch announced the “merger” with Phoenix/Packaging of Mount Joy, Pennsylvania. Welch has completed a continuous stream of 42 acquisitions and now has in excess of 1,700 employees with over 26 manufacturing plants. It is an extraordinary story of a steady and deliberate 40‑year execution of a mission-focused acquisition strategy.

Corrugated paper products remain at the heart of the physical economy. Boxes still move goods, convey brands, and while doing so, protect the contents inside. While it may be an indication of an economic slowdown or possibly an imminent recession, the present downturn may simply be the corrugated packaging industry catching its breath after a remarkable run.

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View The Target Report online, complete with deal logs and source links for October 2025

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