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One of the most effective tenets of manufacturing is to increase capacity where demand is sustained, and to carefully contract production where demand has dimmed. This summer, Packaging Corp of America(NYSE:PKG) is living by this philosophy, completing a major conversion of the company’s No. 3 machine at its Wallula, Washington mill. The machine will be converted from a paper outputting unit to a packaging beast, which CEO Mark Kowlzan describes as a “400,000 ton per year, high performance, 100% virgin kraft linerboard machine.”
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