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U.S. Pulp & Paper Capex in 2025: Who’s Building, Who’s Pausing, and What’s Next

  • John Strunk
  • Sep 16
  • 4 min read

After two volatile years, capital spending across U.S. pulp and paper is more selective—but still very real. Producers are funding high-return, cost-down, and growth-critical projects (recycled board, tissue capacity, automation/energy upgrades) while delaying lower-return expansions in markets with softer demand (notably containerboard). The result: a year of targeted modernization and expansion, alongside capacity rationalizations to rebalance supply.


2025 Scoreboard: Big U.S. Projects & Signals

  • Graphic Packaging — Waco, TX (CRB mill, Q4’25 startup): A marquee recycled paperboard project designed to consume ~20,000 tons/month of OCC and produce ~1,500 t/day of coated recycled board. The company reaffirmed a Q4 2025 start; project costs have run ~20% above early estimates, with 2025 capex guided at ~$850M, citing higher labor and permitting/insurance costs. Graphic Packaging Holding Company+2Recycling Today+2

  • Georgia-Pacific — Alabama River Cellulose (Monroe County, AL): Newly announced $800M modernization/expansion to streamline and boost production at the specialty pulp complex—one of 2025’s largest U.S. pulp investments. PR Newswire+1

  • Pratt Industries — New box/converting capacity: Opened a $253M advanced box facility in Cedar Hill, TX and pledged up to $5B of U.S. investments over coming years, underscoring continued private-label and regional packaging growth. prattindustries.com+1

  • First Quality Tissue — Defiance, OH expansion: Announced the location for the next phase of ultra-premium towel & tissue capacity in February 2025, reflecting persistent tissue demand resilience. firstquality.com

  • Kimberly-Clark — multi-year U.S. manufacturing program: Plans $2B over five years (new facility in Warren, OH, DC expansion in South Carolina, automation/upgrades nationwide). Reuters+1

  • Sofidel (U.S.) — 2025 commissioning & North America growth: Corporate plans include commissioning new tissue capacity and further U.S. integration and growth initiatives in 2025. sofidel.com


…and the Counterweight: Capacity Rationalization & Deferrals

  • Containerboard capacity down ~6% in 2025: Producers have been right-sizing via closures and downtime to match soft shipment trends, aiming to stabilize pricing. Packaging Dive+1

  • International Paper closures & footprint reshaping: IP has closed U.S. facilities this year and is streamlining assets post-acquisition of DS Smith; management still highlights elevated capex for the next several years to fund transformation and cost-out. Reuters+2Q4 Capital+2

  • Smurfit WestRock (post-merger) selective spend: The combined company reports disciplined allocation with multi-billion 2025 capex guidance, but has idled/closed certain high-cost capacity (e.g., Forney, TX), reflecting a “fix and focus” playbook. smurfitwestrock.com+1


Why the pullbacks?

  1. Demand softness in box grades (AF&PA shows Q2’25 containerboard production down ~5% YoY),

  2. Higher construction & labor costs (see GPK Waco overrun), and

  3. Capital discipline after two volatile years (run-to-demand operations, fewer greenfields). American Forest and Paper Association+2PaperAge+2


Are Companies Spending More or Less Than Recent Years?


It depends by company, but headline budgets remain sizable—often equal to or above pre-2023 run-rates where big programs are underway:

  • International Paper: Indicated ~$1.9B per year capex for 2025–2027 to fund integration, optimization, and growth. Investing.com

  • Smurfit WestRock: Street summaries point to $2.2–$2.4B 2025 capex guidance for the merged entity, focused on synergy capture and high-return projects. StockInvest

  • Graphic Packaging: 2025 capex ~$850M as Waco ramps. Recycling Today

  • Packaging Corp. of America (PCA): Ongoing capital spending; 2025 quarters show steady investment cadence tied to reliability, cost-out, and converting upgrades. Business Wire+1


Net-net: Industrywide dollars haven’t disappeared; they’ve shifted toward modernization, recycled fiber projects, tissue assets, and automation/efficiency—while greenfield containerboard and marginal expansions see the most caution.

What the Near Future Likely Looks Like (12–24 Months)


1) Targeted “cost-position” projects. Expect more reliability, energy, and automation upgrades (turbines/boilers, drives, DCS/analytics, sustainability retrofits) with fast paybacks, especially where labor constraints and power costs bite. Recycling Today

2) Recycled board capacity coming online—carefully. Waco’s start will reshape OCC flows and CRB supply; any next-wave announcements will be paced against demand and fiber availability. Recycling Today

3) Tissue remains a capex bright spot. Population and away-from-home recovery support premium towel/tissue investments and warehouse/logistics builds—First Quality, Sofidel, GP, and K-C signal continued commitment. Reuters+3firstquality.com+3sofidel.com+3

4) Box capacity stays disciplined. With capacity down ~6% YTD and shipments still soft, producers are more likely to fund debottlenecks and converting over new paper machines, until demand trends or pricing improve materially. Packaging Dive+1

5) M&A integration projects. Post-merger Smurfit WestRock and IP’s DS Smith integration will prioritize synergy capex (mill upgrades, network optimization, IT and converting standardization). smurfitwestrock.com+1


Bottom Line

  • Yes, companies are spending—but surgically: on pulp modernizations, recycled board builds, tissue expansions, and cost-down/automation work.

  • Delays/deferrals cluster in containerboard and lower-return expansions due to soft demand, higher build costs, and capital discipline.

  • Dollar amounts at several majors remain large (or higher) vs. recent years because of mega-projects and integration programs, even as others trim. Expect more modernization than greenfield over the next 1–2 years.


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Sources

Note & disclaimer

This post summarizes publicly available information as of September 16, 2025. It is informational only and not investment advice. Always review original company filings and releases before making business decisions.

 
 
 

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