Business intelligence firm IBIS World reports that the paper mill industry has shrunk by an average of 2.2 percent over the last five years, but the Australian company Pratt Industries just invested $250 million in a new recycled paper mill in Valparaiso.
Why drop so much cash if the paper industry is shrinking?
Pratt happens to be in a corner of the paper industry that is growing fast, maybe counterintuitively, because of the Internet. The company is benefiting from a boom in recycled paper boxes that online retailers like Amazon and Zappos use to ship goods to customers.
The boxes are also popular with online subscription services that send things like fashion accessories and grooming products every month.
“The market is growing by 3 percent a year,” Plant Manager Jay Hennessy said. “And we’re taking market share away from competitors.”
Pratt has grown into one of the largest, lowest-cost companies in North America over the past two decades, Chief Executive Officer David Dennis said. The company had to innovate to thrive in “a market already dominated by some of the world’s largest and most efficient urban container board producers.”
Pratt’s $250 million, 100-percent recycled paper mill, touted as the world’s most environmentally-friendly and technologically advanced in the world, “harvests the urban forest” in Valparaiso. It gets newspapers, catalogs and office waste from Chicago, Fort Wayne, Indianapolis and other nearby cities.
They’re pressed into bales of recycled fiber and then pulped at the new mill at 275 E. Division Road, which is highly automated and will eventually employ up to 137 people.
State-of-the-art machinery, including giant rollers and car wash-like heaters, then form, press and dry it into paper. Paper flies by at up to 40 mph before it’s steam-heated, evaporating all the water.
Midwestern corn starch is used to strengthen the recycled paper, which is wound into 35-ton rolls that stand taller than a man and get stacked stories high in the cavernous warehouse.
Hennessy estimates about 65 percent of the recycled paper goes directly to the adjoining corrugated Pratt box factory, instead of being shipped in from New York as previously. That keeps trucks off the road, greatly reducing greenhouse emissions.
The company, which operates three other recycled paper mills, says its recycling efforts save 3,000 tons of emissions a day, along with 51,000 trees, 21 million gallons of water, and 9,900 cubic yards of waste.
Perhaps most famous, the Valparaiso factory makes the boxes for Home Depot. But other major customers include Amazon, the Albanese Candy Co., Procter & Gamble, 3M, Nestle, Unilever, Prestone, and the Pampered Chef.
The 550,000-square-foot box plant produces 76 million lineal feet of paper every month, or enough to stretch entirely around the border of the United States.
“Indiana workers are the most productive workers in America,” Pratt founder Anthony Pratt said during the recent grand unveiling for the new mill. "We’re proud that we’re the only major company that produces only 100-percent recycled paper, which is important to our customers."