Closed Loop Partners funds LEI Packaging's second molded fiber plant to process post-consumer bales

Expanding domestic capacity for recovered paper

The U.S. molded fiber sector continues to build domestic capacity to absorb recovered paper. In a significant move for the Midwest packaging supply chain, Closed Loop Partners has injected a multi-million-dollar loan into LEI Packaging, facilitating the completion of the manufacturer's second production facility in Chisago City, Minnesota.

The financing, channeled through Closed Loop's Catalytic Capital & Private Credit strategy led by CEO Tazia Smith, addresses a critical bottleneck in the circular economy: the infrastructure required to clean and process curbside recovered materials.

Technical leap: From post-industrial to post-consumer

Founded in 2014 by Paul and Katie Johnson, LEI Packaging built its initial footprint by converting clean post-industrial paper into molded fiber egg cartons and agricultural trays. However, the newly completed second plant marks a technical evolution. The facility integrates a dedicated de-trashing system, allowing the company to process post-consumer recycled fiber bales for the first time.

Handling post-consumer bales introduces significant contamination challenges compared to post-industrial scrap. The new de-trashing equipment is designed to separate non-fiber debris from the pulping process, enabling LEI to consume thousands of tons of mixed paper and corrugated cardboard that would otherwise strain municipal recycling systems.

Market context and economic impact

As consumer brands and agricultural cooperatives aggressively phase out expanded polystyrene (EPS) and single-use plastics, the demand for custom-molded fiber has outpaced regional production capabilities. Paul Johnson, co-founder of LEI Packaging, has positioned the company to capture this overflow, expanding beyond basic egg flats into protective packaging for consumer electronics and industrial parts.

The Chisago City expansion not only secures a domestic end-market for recovered fiber but also generates over 20 permanent manufacturing jobs in the region. By backing family-owned converters like LEI, capital providers are effectively decentralizing the U.S. paper recycling infrastructure, moving processing capacity closer to both the fiber source and the agricultural end-users.