Nackawic and Sweetwater: Two Ways Capacity Leaves North America

An idling in New Brunswick and a permanent exit in Georgia show how mill economics and portfolio strategy are deciding which assets remain competitive.

Within 24 hours this week, two announcements hit North American fibre markets.

On September 16, Greif said it will exit coated recycled paperboard (CRB) and close its Sweetwater mill in Austell, Georgia, by year-end. On September 17, AV Group said it will temporarily idle its Nackawic dissolving pulp mill in New Brunswick around the end of October.

The products, owners and stated reasons differ.

Together, however, they show two different ways capacity leaves a market.

Nackawic: a market problem, and a dispute about the mill's future

AV Group, a subsidiary of India's Aditya Birla Group, blamed prevailing market conditions and broader macroeconomic factors. Its spokesperson was more specific: there is currently a surplus of dissolving-grade pulp, and while prices are stable, they are not keeping up with production costs. The company also pointed to competition from producers in places such as South Africa and South America. On the supply side, Brazil's Bracell said in late 2025 that it would dedicate one full production line to dissolving pulp starting in 2026, adding to the competing supply.

The path to the announcement was gradual. The mill stopped buying wood in August, which AV Group described as an inventory adjustment and linked to cash flow, citing a significant lag between buying wood, making and shipping pulp and getting paid. By September 8, AV Group had told the provincial government it was evaluating all of its strategic options.

Unifor, which represents 228 of the 350 affected workers, reads it differently. It says the mill was not modernized and doubts a shutdown will prove temporary. Both views describe the same reality: an older, capital-intensive mill selling into a globally traded market has little room for error once prices stop covering costs.

Whether "temporary" holds is the key question. With wood purchases already stopped, strategic options under review and a restart that requires fibre, labour, working capital and customer commitments to line up again, the odds tilt toward a long idling at best. That also affects how much supply leaves the market. If output was already tapering since August, the effect depends on how long the mill stays down.

Sweetwater: a portfolio decision

Greif's announcement was framed differently. Sweetwater produces CRB, uncoated recycled paperboard (URB) and gypsum facing and backing grades. Greif said the mill's operating configuration, limited integration within its network and cost position prevented a sustainable competitive position. It is leaving CRB but staying in URB, and says it will serve affected URB customers from its other North American mills.

Sweetwater is the latest step in a sequence. In January 2025, Greif announced it would end production on a paperboard machine in Austell and close its Fitchburg, Massachusetts mill, which it tied to a plan to cut $100 million in costs over three years. In May 2025, it announced the closure of its Los Angeles mill, removing 50,000 tons of CRB and 22,000 tons of URB capacity and ending its West Coast coated paperboard production. Trade press attributed that closure to increased costs and limited integration opportunities, reasoning similar to Sweetwater's. Greif executives have described a quadrant analysis, presented at the company's December 2024 investor day, that sorts plants from those worth investing in through to those to divest or close. Greif hasn't said where Sweetwater fell, but the closure suggests it landed in the last category. The mill came with Greif's 2019 acquisition of Caraustar.

"Limited integration" is the phrase to notice. A mill feeding its owner's converting plants has a captive outlet. A merchant mill has to win on cost, mix and service every day. Being part of a large company doesn't make an individual mill strategically valuable.

Two different problems

The distinction matters. Sweetwater is largely a company-specific decision: nothing in Greif's announcement says demand for recycled paperboard has vanished, and the company is keeping URB. Nackawic is closer to a market problem: by AV Group's account, too much dissolving pulp chasing prices that don't cover costs. In both cases the asset couldn't earn an acceptable return, but for different reasons: one from its position in a portfolio, the other from price and cost in an oversupplied global market.

Three things to watch:

• Where Sweetwater's volume goes. URB customers have a default in Greif's own network. CRB buyers don't and will look to other producers, which could help their operating rates. That is an expectation, not something the announcements confirm.

• Whether other CRB capacity gets a harder look. Greif has now closed two CRB mills in about 16 months, which puts more attention on the cost positions of the remaining producers.

• Whether Nackawic restarts. If it does, its ~190,000 tonnes return to a market already described as oversupplied. If not, the segment's balance shifts structurally.

Beyond the payroll numbers

Nackawic-Millville has about 4,400 residents, and the mill is its largest employer. In Austell, Greif had already shut a paperboard machine in early 2025, so Sweetwater is a further reduction in a community long built around paperboard, with fibre suppliers, haulers and contractors all exposed.

The bigger picture

Neither announcement defines the whole industry. But the pattern in Greif's numbers is hard to miss: two paperboard mill closures totalling roughly 190,000 tons of capacity across CRB, URB and gypsum grades in about 16 months, on top of the early-2025 closures. Nackawic shows the other side, where a global surplus can strand a mill regardless of who owns it.

The question for mill operators is no longer how much capacity they have. It is which of their mills can justify the capital to keep running.