For corrugated shipping container, linerboard and folding-carton converters across the US and Canada, the news hasn't been particularly good the past few weeks. A quick rundown:

• MeadWestvaco Corp. will permanent idle the No. 1 paper machine at its Evadale, TX, paperboard mill early this year. As many as 75 workers will be affected as material is transitioned to other plants.
• Weyerhaeuser Co. is expected to shutter a 350,000-tons-a-year containerboard machine at its Plymouth, NC, facility. The shutdown will impact about 200 hourly and salaried positions.
• Cascades, Inc., says it will close one of two folding-carton production lines at its Montreal, Canada, plant. The restructuring will eliminate 61 jobs, and 26 workers will be temporarily laid off.
• Gibraltar Packaging plans to close its Ft. Wayne, IN, carton facility by March 15, consolidating operations with other plants. About 100 workers will be affected.

And perhaps the most telling:

• Vertically integrated giant Smurfit-Stone Container Corp. announced that it will close up to 20 percent of its corrugated-container facilities by 2008.

What's driving this rash of cutbacks? After spending the past few years introducing new packaging structures, graphics and high-end finishing capabilities, paperboard converters of every size are being hit by the double whammy of substantial input-cost increases along with a drop of 2.5 percent in tonnage shipments last year. The solution has come down to eliminating excess capacity while greatly improving production efficiency.

In every case listed above, materials will now be made on more cost-effective, state-of-the-art equipment somewhere else in these companies' operations. For instance, by transferring business to larger plants, Smurfit-Stone says it not only expects $600 million in annual savings by 2008, it will invest about $400 million to implement the strategic plan.

More good news: Through 2009, corrugated and carton sales will return to a growth track (see Market Trends, page 4). Tonnage shipments will rise about a half-percent per year, the Paperboard Packaging Council forecasts, and dollar volume will increase nearly 4 percent annually.

Fortunately, there are two sides to every coin. The savvy converter will be the one successfully balancing cost reduction with revenue growth.