International Paper (IP), a global leader in the packaging and paper industry, has announced a strategic review of its Global Cellulose Fibers (GCF) business and the closure of its Georgetown, South Carolina pulp and paper mill.
These moves signal a significant shift in the company's focus towards sustainable packaging solutions.
IP has initiated a comprehensive review of strategic options for its GCF business, which generated $2.9 billion in revenue in 2023. The GCF division produces high-quality absorbent pulp used in personal care products and specialty pulp for various industrial applications. With operations spanning three countries, including eight mills and two converting facilities, this review could potentially lead to a major restructuring or divestiture.
Andy Silvernail, Chairman and CEO of International Paper, stated, "We are committed to maximizing value for our shareholders, and this review aligns with that goal." The company has enlisted Morgan Stanley & Co. LLC as a financial advisor to assist with the process.
In a separate but related move, IP announced the permanent closure of its Georgetown, South Carolina mill by the end of 2024. This facility, which produces approximately 300,000 tons of fluff pulp annually, will see its production capacity transferred to other mills within the company's network.
In total, 526 hourly employees and 148 salaried employees will be impacted. All employees will be offered severance benefits, outplacement services and access to mental health resources.
These announcements come at a time when the paper and pulp industry is facing significant challenges, including shifting market demands and increased focus on sustainability. IP's decision to potentially divest its cellulose fibers business while concentrating on packaging solutions reflects broader industry trends towards specialization and environmental consciousness.
The closure of the Georgetown mill also highlights the ongoing consolidation in the North American paper industry, as companies seek to optimize their operations and reduce exposure to commodity markets.
International Paper, based in Memphis, Tennessee, specializes in renewable fiber-based packaging and pulp products. With approximately 39,000 employees worldwide, the company reported net sales of $18.9 billion in 2023.
