International Paper (IP), one of the world’s leading companies in pulp and packaging production, announced today that it is reviewing its strategic options for the global cellulose fiber (GCF) business, aligning with its strategy to focus on sustainable packaging solutions. This evaluation seeks to maximize shareholder value.
The GCF business produces high-quality absorbent pulp used in various personal care products, such as feminine hygiene items and incontinence products. In 2023, this division generated revenues of US$2.9 billion and operated in three countries, with eight mills and two conversion facilities.
“International Paper is committed to maximizing value for our shareholders, and to that end, we have launched a comprehensive and thorough review of strategic options for our global cellulose fibers business”, said Andy Silvernail, President and CEO of the company.
Clay Ellis, Senior Vice President of Global Cellulose Fibers, added that GCF is focused on optimizing gains by aligning resources with key fluff pulp customers. “GCF is focused on accelerating earnings by aligning resources with our most strategic fluff pulp customers, implementing an 80/20 mindset and creating a simplified and focused portfolio. Our team is well-positioned to win with attractive customers in the growing global fluff pulp market”, he emphasized. “Throughout our review, we will maintain our strong customer relationships with the same high standards and close collaboration”, he added.
To assist in this process, International Paper has hired Morgan Stanley & Co. LLC as a financial advisor. The options analysis is in the early stages, and there is no guarantee that this review will result in any specific transaction.
Additionally, the company announced the permanent closure of its Georgetown, South Carolina, facility, with an expected shutdown by the end of 2024. The facility, which produces approximately 300,000 tons of fluff pulp, will transfer its production to other mills while retaining 100% of the fluff pulp production capacity.
The closure of the plant will impact 526 hourly workers and 148 salaried employees. International Paper assured that all affected employees will receive severance benefits, outplacement services, and access to mental health resources. “This decision is especially difficult because of the impact on hard-working employees, their families and the surrounding communities”, commented Bernie Chascin, manager of the Georgetown plant.
