Target Report: Corrugated Demand Gets Cut Down to Size

Transformative technology moves corrugated box production downstream, consolidation continues apace, and legacy converting plants are shuttered.

Packsize, Box Innovator, Acquires Panotec

Right-sized packaging pioneer Packsize, based in Salt Lake City, Utah, is expanding its reach and impact on corrugated packaging usage patterns with the acquisition of its competitor, Panotec. Both the buyer and the seller have been innovators in the business of designing and manufacturing machines that make uniquely sized boxes to order, on-site, at or near the point where the boxes will be used. Right-sized box production reduces the amount of corrugated material used, minimizes void fill (such as crumpled paper, air pillows, or foam materials), and sharply reduces the space and working capital devoted to inventories of premade boxes.

The acquired company, Italy-based Panotec, manufactures automation systems for right-sized packaging. Packsize said the combination will expand its machine offerings and increase its installed customer base across more than 50 countries. The deal follows Packsize’s April 2025 acquisition of Sparck Technologies, a producer of high-throughput fit-to-size systems based in the Netherlands. Together, the transactions expand Packsize into a global provider of right-sized packaging automation.

The Box Plant Moves Downstream

The traditional corrugated supply chain separates box production from product fulfillment. A box plant converts containerboard or corrugated sheets into finished cartons, ships them to the customer, and leaves the customer in a position needing to store an assortment of sizes. The system works well when a shipper uses large quantities of predictable box styles. It becomes less efficient when the order profile includes thousands of products with widely varying dimensions, as is the norm with much online shopping.

Right-sizing technology changes where the final conversion from sheet to box takes place. Continuous fanfold corrugated is loaded into a machine at the warehouse or production site. Product dimensions can be entered manually or provided via a barcode or a warehouse management system. Sophisticated software takes over and plans out all the scores and cuts required to produce the custom-size box in real time. The machine selects an available board width and then uses a series of wheels and blades to cut, score, and crease the material into the required pattern. Depending on the machine configuration, complex downstream equipment may also form, close, seal, print, or label the package. Packsize and Panotec offer systems designed for batch sizes as small as one, with a different box for each successive order.

The inherent efficiency is easy to understand. Instead of choosing the least-wrong carton from a rack of standard sizes, the operator produces a custom box intended for the item being shipped. Less empty space in the box generally means less corrugated, less void fill, and a smaller shipping cube. In many instances, these systems reduce warehouse space and free up working capital tied up in finished-box inventories. The value proposition is not simply a better carton; it is a packing operation reorganized around data, automation, and material flow. Parcel volume can increase without a corresponding increase in corrugated square footage. The machine is not replacing the box so much as removing the excess box.

The Packsize-Panotec transaction concerns who controls the design, production timing, and economics of the package. A conventional converter delivers a completed box. A right-sizing system delivers the ability to create the box. More value migrates from manufacturing and inventory toward machinery, software, integration, and a continuing supply of fanfold corrugated. Waste is reduced, and as a consequence, demand for corrugated is moderated as right-sizing technology is implemented.

Not Every Box Wants to Be Unique

For the corrugated industry, the implication is more complicated. Right-sizing machines do not eliminate corrugated demand. They consume fanfold board and create recurring opportunities in material supply, technical service, software, and equipment support. Nonetheless, the systems are designed to reduce the amount of corrugated used for a given shipment.

Conventional box production will not be reduced across the board. High-volume products with stable dimensions will continue to be best served by containers produced in long runs. Retail-ready packaging, high-graphics work, specialty coatings, complex die cuts, and demanding protective structures will remain the domain of experienced converters. Automated systems also require capital, floor space, maintenance, dependable software, and corrugated material that is engineered to run consistently in varied environments.

The right-sizing technology is most compelling where variability creates waste: e-commerce fulfillment, third-party logistics, replacement parts, industrial products, and operations with a long tail of low-volume SKUs. In those settings, the ability to make a single appropriately sized box can be more valuable than the lowest unit cost of a stock carton. Traditional plants will continue to produce large runs, decorated packaging, and boxes for uniquely shaped or fragile products. A growing portion of variable, short-run work will be converted closer to the packing line.

International Paper Redraws the Map

While Packsize is moving the final conversion of corrugated closer to the packing line, International Paper is concentrating conventional box production into a smaller number of facilities. Just four days before the Panotec announcement, International Paper said it would close its Aurora, Illinois, sheet plant and converting plants in Elk Grove, California, and Barrington, New Jersey, while ending preprint operations in Richwood, Kentucky. The closures are expected to be completed by the end of the third quarter, with affected production transferred to other facilities in the same regions. These four closures are in addition to six plant closures announced by International Paper in the past twelve months. (See The Target Report: Corrugated Sheet and Box Production – October 2025).

International Paper described the actions as part of a broader effort to optimize its network, strengthen its cost position, and focus investment on higher-value opportunities. At the same time that International Paper has proceeded with a slew of closures over the past year, the company has begun construction of a 468,000-square-foot corrugated packaging plant in Brandon, Mississippi. The $225 million greenfield project is intended to strengthen its Mid-South network. It is a clear indication that the company is committed to corrugated production.  International Paper is not simply reducing its box-making footprint; it is concentrating capacity in larger, more modern facilities, while closing numerous smaller facilities.

The K-Shaped Future of Corrugated

Packsize’s move adds machinery and technology. International Paper’s actions subtract locations while adding modern capacity elsewhere. One decentralizes part of the converting process; the other concentrates conventional production into a tighter network. Together, they point to an industry in which advantage comes from controlling waste and delivering the right box for the job at hand, rather than merely from making more boxes.

Corrugated demand is changing. The oversized carton, the excessive box inventory, and the redundant plants are all being brought into question: how much corrugated production capacity will be required to deliver packages? Increasingly, the answer is being cut down to size.

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