Packaging Corporation of America (PCA) has announced plans to convert the No. 3 newsprint machine (D3) situated at its DeRidder, Louisiana mill, US, to containerboard, producing lightweight linerboard and medium.
The machine is expected to be shut down by mid-September 2014, while until then it will continue to produce newsprint.
The conversion process of the machine is anticipated to be completed by November 2013, with the commencement of operations, according to the company.
Estimated cost of converting the machine will be around $115m with annual containerboard capacity of 355,000t.
PCA's D3 conversion project is said to produce 30% to 35% after-tax discounted cash flow return compared to less than a 20% return on the D2 project.
PCA CEO Mark Kowlzan said the project will provide needed capacity to the the company with a higher return compared to the D2 project.
"Without the D3 project, we estimate that our outside purchases of containerboard would be about 250,000 tons in 2015 in order to support PCA's total containerboard demand," Kowlzan added.