MEMPHIS, Tenn. (News release) -- International Paper announced Oct. 31 the decision to review strategic options for its global cellulose fibers (GCF) business. The decision to explore alternatives for the GCF business is consistent with the Company's strategy to focus on sustainable packaging solutions.
IP's GCF business creates safe, high-quality absorbent pulp for a wide range of applications like feminine care, incontinence and other personal care products that promote health and wellness. In addition, its specialty pulp serves as a sustainable raw material used in textiles, construction materials, paints, coatings and more. The GCF business generated $2.9B in revenue in 2023 and has operations in three countries, with eight mills and two converting 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 International Paper Chairman and CEO Andy Silvernail.
"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," said Clay Ellis, Senior Vice President, Global Cellulose Fibers, International Paper. "Throughout our review, we will maintain our strong customer relationships with the same high standards and close collaboration."
International Paper has retained Morgan Stanley & Co. LLC as financial advisor to help review strategic options for the GCF business. The review of strategic options is at an early stage, and there can be no assurance that this review will result in any kind of transaction or other outcome. The Company will provide updates on the progress or status of this matter if and when it deems further disclosure is required or appropriate.
IP to Close Georgetown, S.C. Pulp and Paper Mill
Additionally, the Company announced the permanent closure of its Georgetown, South Carolina mill. The mill will shut down in stages with a full closure expected by the end of 2024.
The Georgetown mill produces approximately 300,000 tons of fluff pulp designed for a range of consumer applications from baby diapers to incontinence products. GCF plans to retain 100% of the mill's fluff pulp capacity by transferring production to other mills and further reducing the Company's exposure to commodity pulp grades.
The mill also produces uncoated freesheet papers that it sells to Sylvamo (NYSE: SLVM) pursuant to a strategic contract, which IP and Sylvamo have mutually agreed to terminate as of December 31, 2024.
"This decision is especially difficult because of the impact on hard-working employees, their families and the surrounding communities," said Bernie Chascin, Georgetown mill manager, International Paper.
In total, 526 hourly employees and 148 salaried employees will be impacted. All employees will be offered severance benefits, outplacement services and access to mental health resources.
