Paper Industry Update February – Week 1

The first week of February marked an eventful period for the global pulp, paper, and packaging industry. Companies across Europe, Asia, and the Americas reported financial results, announced investments, advanced sustainability initiatives, reshaped portfolios through acquisitions and divestments, and introduced new technologies. Despite ongoing market pressure from weak demand, overcapacity, and cost inflation, the sector demonstrated resilience and a strong commitment to long-term transformation.

Financial Performance and Corporate Results

Several major producers reported results reflecting disciplined cost control and strong cash-flow generation.

Holmen AB delivered resilient 2025 results despite weak construction markets, reporting SEK 3.27 billion in operating profit and proposing a higher dividend. The company also strengthened its renewable energy platform through the completion of the Blisterliden Wind Farm.

UPM closed 2025 with operating cash flow of €1.4 billion. A key milestone was the start of commercial deliveries from its Leuna biorefinery, marking entry into large-scale biochemicals.

Stora Enso reported €897 million in operating cash flow and announced plans to separate its Swedish forest assets into a new listed company by 2027, sharpening its focus on renewable materials.

Valmet improved profitability in 2025, raising its comparable EBITA margin to 11.9% and proposing a dividend of €1.35 per share.

CMPC posted resilient Q4 2025 results with USD 308 million in free cash flow, while maintaining focus on balance-sheet strengthening.

ITC Limited reported continued improvement in its Paperboards, Paper & Packaging segment during Q3 FY26, showing structural recovery despite industry headwinds.

Tamil Nadu Newsprint and Papers Limited returned to profitability in Q3 FY26, driven by higher production volumes and a shift toward premium products.

Nippon Paper Industries delivered strong earnings growth in Q3 FY2026, supported by overseas recovery and improved performance in daily-life paper products.

Investments, Capacity Expansion & Technology

Capital investment and modernization remained central themes.

Arctic Paper commissioned a new Pasaban KB 2200 sheeter at its Kostrzyn mill, boosting flexibility and operational efficiency, though the company also faced a SEK 780,000 disclosure-related fine from Nasdaq Stockholm.

BHS Corrugated launched its NextGraphX workflow, integrating digital preprint and corrugation to replace traditional litho-lamination and reduce costs and waste.

Tri-Wall began construction of a €30+ million high-tech paper packaging factory near Plovdiv, Bulgaria, creating around 150 jobs.

SunDance announced a new production facility to expand folding carton, finishing, and mailing operations.

Pratt Industries received approval to expand its Moultrie, Georgia warehouse, reinforcing its agricultural packaging supply network.

Northwood acquired Kimberly-Clark’s tissue mill and converting assets in North Wales, expanding its Away-from-Home and consumer tissue capabilities.

Sustainability, Energy & Climate Action

Decarbonization and renewable energy initiatives accelerated across the sector.

Sonoco commenced delivery under a 140-MW Virtual Power Purchase Agreement with ENGIE, covering over 80% of its U.S. electricity needs.

Daio Paper received an ¥8 billion government grant to support the shutdown of a coal boiler and construction of new power-generation facilities.

Metsä Group opened applications for its 2026 Nature Projects funding program, supporting biodiversity initiatives across Finland.

Smurfit Westrock partnered with SLR and RIZM to develop Net Zero transition plans for recycled paper mills across Europe.

Borregaard delivered an all-time-high EBITDA in 2025, supported by strong demand for bio-based solutions.

Mergers, Acquisitions & Portfolio Reshaping

Strategic M&A activity reshaped the competitive landscape.

Essity completed its USD 340 million acquisition of Edgewell’s feminine care business, strengthening its North American personal care portfolio.

Henkel agreed to acquire Stahl Group for €2.1 billion, expanding into specialty and paper packaging coatings.

Veritiv acquired Pack4, enhancing its custom protective packaging capabilities.

Millcraft Paper Company announced the acquisition of Steen-Macek Paper in Wisconsin, expanding its regional presence.

TC Transcontinental received shareholder approval to sell its packaging business to ProAmpac.

Cascades announced its exit from honeycomb and partition packaging, closing three plants as part of portfolio optimization.

FM Cartiere confirmed plans to restart its Momo mill in Q2 2026 with a new product following restructuring.

Pricing Actions, Governance & Supply Chain

Producers moved to restore margins amid persistent cost pressures.

The Navigator Company announced a $30 per tonne increase on uncoated woodfree papers in overseas markets.

Sappi Europe declared a €50 per tonne price increase on woodfree coated sheets effective mid-March.

Antalis achieved an AA+ grade in an unannounced BRCGS Storage & Distribution audit, reinforcing supply-chain reliability.

Leadership, Research & Circular Economy Innovation

BioPak appointed Guy Brent as CEO, signaling a new growth phase in compostable foodservice packaging.

Research and circular-economy initiatives also gained momentum, with Indian Institute of Technology Roorkee partnering with industry players to develop crop-waste-based paper and molded fiber packaging as alternatives to virgin pulp.

Industry Outlook

Overall, the first week of February highlighted an industry navigating short-term volatility with long-term conviction. Through disciplined financial management, targeted investments, sustainability leadership, pricing actions, and strategic portfolio reshaping, global pulp, paper, and packaging companies continue to position themselves for resilience and growth in a low-carbon, fiber-based future.