International Paper Restructures North America Operations, Closing Key Facilities by 2025

International Paper, a key player in the global packaging industry, has announced significant strategic shifts involving the closure of facilities in Savannah and Riceboro, part of its broader North America Packaging Solutions transformation. This move is expected to impact approximately 1,100 hourly and salaried workers as the company aligns its operations to better serve its customer base and enhance efficiency.

The decision to shutter the Savannah containerboard mill and packaging plant, in addition to the Riceboro containerboard mill and associated timber operations, stems from International Paper’s aim to optimize its manufacturing footprint and maintain a competitive edge. This realignment is part of their ongoing strategic evaluation to focus on sustainable packaging solutions and streamline their business operations. The closures, which will occur in phases, are scheduled to be completed by the end of September 2025.

Through this transition, International Paper has expressed its commitment to supporting affected employees. The company intends to provide severance packages and outplacement assistance as part of its efforts to mitigate the impact of these closures on its workforce. Tom Hamic, Executive Vice President and President of the North America Packaging Solutions business, emphasized the company’s dedication to assisting its employees and maintaining service to its customers during this period of change. He further stated that these difficult decisions are vital for ensuring long-term success, allowing the company to concentrate on markets and products that offer the most value.

In conjunction with these closures, International Paper is injecting $250 million into converting the 16 machine at its Riverdale mill in Selma, Alabama. This investment aims to bolster the production of containerboard, reflecting the company’s strategic focus on high-demand products and efficient production processes. The Riverdale conversion project is anticipated to reach completion by the third quarter of 2026.

International Paper has reached a definitive agreement with American Industrial Partners for the sale of its Global Cellulose Fibers business for $1.5 billion. This sale is seen as a pathway for the Global Cellulose Fibers segment to thrive under new ownership, with AIP committed to advancing the business's strengths. The sale is expected to conclude by the end of the year, subject to customary regulatory and other approvals.

In response to the impending closures, Savannah's Mayor Van Johnson expressed concern for the community, especially the employees directly affected by the decision. Acknowledging International Paper's historical significance to the region, he highlighted the importance of uniting community resources to support those impacted and navigating the challenges posed by these economic shifts.

The broader implications of International Paper’s strategic changes are significant. The decision will impact the giant timber industry in the state, given the facilities' roles in manufacturing key pulp and paper products. As the company aims to streamline operations and focus on strategic priorities, the adjustments reflect a wider trend within the industry to adapt to evolving market demands and technological advancements.

These developments mark a pivotal moment in International Paper’s strategy, signifying a deeper commitment to innovation and sustainability while navigating the challenges that accompany such transformational decisions. The company continues to position itself as a leader in delivering efficient and sustainable packaging solutions globally.