International Paper, a global leader in paper and packaging solutions, announced today a strategic initiative aimed at enhancing its manufacturing system to align with evolving customer demands.
As part of this initiative, the company will be making challenging decisions to optimize its operations. Specifically, International Paper will permanently close its containerboard mill in Orange, Texas, and discontinue production on two pivotal pulp machines - the #20 machine in Riegelwood, N.C., and the #4 machine in Pensacola, Fla.Mark Sutton, Chairman, and CEO of International Paper, expressed the complexity of these decisions, acknowledging the profound impact on employees, their families, and the communities involved. "We recognize the gravity of these choices and the effect they have on our dedicated workforce in Orange, Riegelwood, and Pensacola, all of whom have played a significant role in the company's journey. In these challenging times, we are committed to supporting our employees through severance benefits, outplacement assistance, and other resources to help them navigate this transition," Sutton stated. Approximately 900 positions will be affected by these changes. International Paper is actively seeking to minimize the impact on employees by utilizing existing vacancies, retirements, natural attrition, and other opportunities within the company. The closure of the Orange mill will result in a reduction of the company's containerboard capacity by approximately 800,000 tons. Despite this adjustment, International Paper's North American containerboard mill system will consist of 17 mills with an annual production capability of 13MM tons. The cessation of operations in Pensacola and Riegelwood will decrease IP's pulp capacity by approximately 500,000 tons (300,000 tons of fluff pulp and 200,000 tons of southern bleached softwood). Post these changes, the company's pulp mill system will encompass eight mills, with an annual production capability of 2.7MM tons. Sutton emphasized, "We remain steadfast in our belief in the robust, long-term prospects of our businesses. These strategic measures enhance our competitive edge and position us favorably for the future. Our streamlined mill system, with its diverse capabilities, provides us with the agility to meet the evolving needs of our customers today and tomorrow." The company anticipates the Orange mill and the #20 machine in Riegelwood to halt production by the end of the year. The #4 machine in Pensacola is currently idle and will not resume production. International Paper is focused on the future, ensuring its continued ability to deliver innovative solutions and unparalleled service to its customers worldwide.