International Paper (NYSE: IP) announced the permanent closure of multiple facilities by April 2025, including the Red River containerboard mill in Campti, La., recycling plant in Phoenix, Az., box plant in Hazleton, Pa., and sheet feeder facility in St. Louis, Mo. The Red River closure will reduce containerboard capacity by 800,000 tons annually.
The closures will affect 674 employees (495 hourly and 179 salaried). The company plans to minimize impact through attrition, retirements, and current vacancies at other locations, offering outplacement assistance, mental health support, and severance benefits where possible.
These closures are part of IP's transformation strategy to become a stronger sustainable packaging solutions company by streamlining operations and focusing investments on facilities that will better serve customers.
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The closure of four facilities marks a decisive move by International Paper to address structural challenges in the containerboard industry. The 800,000-ton reduction in containerboard capacity, representing approximately 5% of IP's total capacity, signals a strategic response to market oversupply conditions that have been pressuring margins industry-wide.
The geographical spread of the closures - Louisiana, Arizona, Pennsylvania, and Missouri - reveals a calculated approach to optimize IP's manufacturing footprint. The Red River mill closure, in particular, is strategically significant as older, less efficient mills typically have higher operating costs per ton. This restructuring should improve capacity utilization rates across IP's remaining facilities, potentially leading to better cost absorption and operational efficiency.
From a market perspective, removing 800,000 tons of containerboard capacity could help stabilize pricing in a market that has faced persistent oversupply issues. The industry's operating rates have been running below optimal levels, and this reduction could contribute to better supply-demand balance.
The emphasis on streamlining operations to "focus investments on facilities that will best serve customers" suggests a shift toward newer, more efficient facilities. Modern containerboard mills typically offer lower production costs, better quality control, and enhanced sustainability metrics - important factors in maintaining competitiveness in today's market.
While the human impact is significant with 674 affected employees, the company's approach to leveraging attrition and internal transfers indicates a measured implementation strategy that could help minimize disruption while achieving necessary operational improvements. The timing of the closures by April 2025 allows for an orderly transition and suggests the changes have been carefully planned to maintain service continuity for customers.
02/13/2025 - 09:15 AM
MEMPHIS, Tenn., Feb. 13, 2025 /PRNewswire/ -- International Paper (NYSE: IP; LSE: IPC) today announced the permanent closure of the company's Red River containerboard mill in Campti, La., recycling plant in Phoenix, Az., box plant in Hazleton, Pa., and sheet feeder facility in St. Louis, Mo. All facilities will cease operations by the end of April 2025. The Red River containerboard mill closure is expected to reduce the company's containerboard capacity by approximately 800,000 tons on an annualized basis.
In total, 495 hourly employees and 179 salaried employees will be affected. The company will work to minimize the impact on employees by using attrition, retirements and current vacancies at other International Paper locations. Team members at these locations will receive outplacement assistance, access to mental health support resources and where possible, severance benefits.
"The decision to close any facility is difficult because of the impact on our team members, their families and the surrounding communities," said Tom Hamic, executive vice president and president, North American Packaging Solutions, International Paper. "We greatly appreciate the contributions from our departing team members and will do all we can to support them."
International Paper is undergoing a transformational journey to become a stronger sustainable packaging solutions company. A critical step in this journey is to streamline IP's footprint to focus investments on facilities that will best serve customers and accelerate strategic initiatives to improve quality, reliability and service delivery.
About International PaperInternational Paper (NYSE: IP; LSE: IPC) is the global leader in sustainable packaging solutions. With company headquarters in Memphis, Tennessee, USA, and EMEA (Europe, Middle East and Africa) headquarters in London, UK, we employ more than 65,000 team members and serve customers around the world with operations in more than 30 countries. Together with our customers, we make the world safer and more productive, one sustainable packaging solution at a time. Net sales for 2024 were $18.6 billion. In 2025, International Paper acquired DS Smith creating an industry leader focused on the attractive and growing North American and EMEA regions. Additional information can be found by visiting www.internationalpaper.com.
Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements reflect management's current views and are subject to risks and uncertainties that could cause actual results and the timing of events to differ materially from those expressed or implied in these forward-looking statements. These risks and uncertainties include the risks that we will be unable to realize the anticipated benefits of our closure of the Campti, La., containerboard mill and other facilities. These forward-looking statements are also subject to the risks and uncertainties contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission ("SEC") on February 16, 2024, and subsequent reports filed with the SEC. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements contained in this press release, whether as a result of new information, future events or changes in expectations.
SOURCE International Paper
FAQ
The Red River containerboard mill closure will reduce IP's containerboard capacity by approximately 800,000 tons on an annualized basis.
The facility closures will affect 674 employees in total, comprising 495 hourly employees and 179 salaried employees.
IP is closing the Red River containerboard mill in Campti, La., recycling plant in Phoenix, Az., box plant in Hazleton, Pa., and sheet feeder facility in St. Louis, Mo.
All facilities will cease operations by the end of April 2025.
IP is offering outplacement assistance, access to mental health support resources, and where possible, severance benefits. The company will also try to minimize impact through attrition, retirements, and current vacancies at other locations.