International Paper to Close Multiple Plants, Slash Jobs Amidst Strategic Shift

International Paper (NYSE: IP), a global leader in packaging and paper products, has announced plans to close multiple facilities across the United States, resulting in the loss of 674 jobs. The closures, set to be completed by the end of April, include the Red River containerboard mill in Campti, Louisiana, a recycling plant in Phoenix, Arizona, a box plant in Hazleton, Pennsylvania, and a sheet feeder operation in St. Louis, Missouri. The company cited ongoing optimization efforts and a focus on facilities that best serve customers as the primary reasons behind the closures.



The closure of the Red River containerboard mill is particularly significant, as it will reduce International Paper's network-wide containerboard capacity by approximately 800,000 tons annually. This reduction represents a substantial strategic move by the company, aiming to address market oversupply conditions and improve operational efficiency. By closing older, less efficient mills, International Paper can improve capacity utilization rates across its remaining facilities, potentially leading to better cost absorption and operational efficiency.



The closures will affect 495 hourly and 179 salaried employees across the four locations. International Paper has pledged to work with employees to minimize the impact of the closures, offering outplacement assistance, mental health support, and severance benefits where possible. The company will also use attrition, retirements, and current vacancies at other International Paper locations to retain as many employees as possible.

International Paper's strategic review of its global cellulose fibers (GCF) business, which generated $2.9 billion in revenue in 2023, also signals a significant shift in corporate strategy. The company plans to shutter the Georgetown, South Carolina mill by the end of 2024, affecting 674 employees. The Georgetown facility produces approximately 300,000 tons of high-quality absorbent pulp, often called "fluff" pulp, designed for a range of consumer applications. International Paper plans to replace 100% of the mill's fluff pulp capacity by transferring production to other sites, ensuring that the company maintains its fluff pulp capacity and customer relationships.

The closures and strategic review are part of International Paper's broader transformation strategy to become a stronger sustainable packaging solutions company. By focusing on newer, more efficient facilities, the company can offer lower production costs, better quality control, and enhanced sustainability metrics, which are important factors in maintaining competitiveness in today's market.

In conclusion, International Paper's decision to close multiple plants and review its GCF business is a strategic move aimed at improving operational efficiency, balancing capacity with demand, and transforming into a stronger sustainable packaging solutions company. While the closures will have an impact on employment and local communities, the company is committed to working with employees to minimize the effects and ensure a smooth transition.