Two mills and two different realities for North American paper capacity

As the North American paper and pulp industry navigates the complexities of 2026, capacity rationalization remains a dominant theme. However, not all mill closures are born from the same pressures. The recent announcements regarding Greif’s Sweetwater paperboard mill in Georgia and AV Group’s Nackawic dissolving pulp mill in New Brunswick provide a stark contrast in how and why tonnage is leaving the market. One represents a calculated, structural portfolio decision, while the other highlights the brutal reality of global macroeconomic headwinds.

The strategic retreat from CRB

Greif’s decision to permanently close its Sweetwater facility in Austell, Georgia, and exit the coated recycled paperboard (CRB) market entirely is a textbook example of portfolio optimization. The move removes approximately 120,000 tons of annual production capacity and impacts roughly 90 employees. For a global packaging leader like Greif, this is not a distress signal but a surgical realignment.

The Sweetwater mill, which also produced uncoated recycled paperboard (URB) and gypsum facing grades, suffered from limited integration within Greif’s broader network. In a highly competitive 2026 landscape where integrated mill systems dictate margin control, standalone or poorly integrated assets become liabilities. By shedding this non-competitive footprint, Greif is actively choosing to redirect capital and focus toward its core strengths, specifically its extensive North American URB network, where affected customers will be transitioned. This is a proactive structural shift designed to protect long-term profitability rather than a reaction to sudden market collapse.

Macroeconomic weight in New Brunswick

In sharp contrast, the situation at AV Group’s Nackawic mill in Canada illustrates the vulnerability of commodity pulp operations to external market forces. The subsidiary of India-based Aditya Birla Group announced the temporary idling of the facility, effectively sidelining 190,000 tonnes of annual dissolving-grade pulp capacity and leaving approximately 350 workers—including 228 Unifor members—facing deep uncertainty.

Unlike Greif’s strategic pivot, AV Group’s decision is explicitly tied to prevailing market conditions and macroeconomic factors. The writing was on the wall when the mill ceased purchasing wood in August for an "inventory adjustment." Dissolving pulp, heavily reliant on global textile demand and complex international supply chains, is highly sensitive to cost inflation and demand dips. The Nackawic idling is a defensive maneuver against margin erosion, reflecting a market environment where operating costs simply outpaced the global pricing reality for their specific grade.

Divergent paths, shared outcome

While the underlying drivers differ fundamentally, the net result for the North American market is a continued tightening of supply. Greif’s exit from CRB hands market share to competitors who have invested heavily in modernizing their coated board assets, reinforcing the idea that only highly efficient, integrated operations will survive in that specific segment. Meanwhile, AV Group’s temporary halt serves as a barometer for the global dissolving pulp market, signaling that North American producers are struggling to maintain cost competitiveness against overseas alternatives.

These two events underscore a critical reality for the industry in 2026. Capacity is not just shrinking; it is being aggressively filtered. Companies are either pruning their portfolios to defend their most profitable integrated networks, or they are being forced to idle massive machines because the global math no longer works in their favor.

The proactive restructuring by Greif demonstrates a mature approach to asset management, ensuring that capital is deployed only where sustainable competitive advantages exist. Will the North American pulp sector find a way to insulate itself from global macroeconomic volatility, or are temporary idlings like Nackawic just the precursor to permanent structural decline? Follow The Paper for daily news, market signals and key updates from the global paper, corrugated and packaging industry. — Sigue toda la actualidad del sector en www.thepaper.ai