International Paper wants to “liberate” its “two regional powerhouses” with the planned split into one North America and one Europe-focused company, CEO Andy Silvernail discussed Thursday morning at the Bank of America Securities 2026 Global Agriculture and Materials Conference.
“When I joined the company, my goal was to turn this into exclusively a packaging business,” said Silvernail, who became CEO in 2024 following a background in private equity and other manufacturing and technology companies. IP accomplished that with the $1.5 billion sale last year of its global cellulose fibers business, he said.
The Silvernail era, which included the 2025 acquisition of European paper packaging giant DS Smith, has also focused on eliminating excess and “inferior” capacity and capabilities, and reinvesting elsewhere.
Silvernail shared more of the back story on what led to the proposed business split, a transition that IP said in January would take about 12 to 15 months to complete.
“As I spent last summer digesting where we were and the progress that we've made, what became very evident was that the benefits and the strength really sat in the regions,” he concluded. Very little value was going to come from a global construction, he said.
“I think we overestimated a couple of things,” Silvernail said. One was customers’ interest and willingness to strike deals on a global basis. IP has observed that global packaged goods companies tend to make packaging supplier choices more locally, he said.
While IP has good positions in both the North America and EMEA markets, “they really don't have anything to do with each other,” he said. “That really started my thinking around then they shouldn't be together.”
“Let's liberate them, and let's let them go play and win in their individual markets,” he concluded.
In the Europe, Middle East and Africa segment, IP believes it’s tied as the region’s number one packaging business. But despite strengths in innovation and sustainability, costs are too high, Silvernail said. “And so much like we've done in the U.S., we're going to do what a lot of folks have not been willing to do, which is to aggressively take that cost out of that system,” he said.
Between the end of last year and this year, IP will have exited between $250 million and $300 million in costs. “About 4,000 people, unfortunately, will be impacted by that in almost 30 facilities in this first wave of actions,” he said.
The U.S. is farther along in its transformation, Silvernail said, and IP intends for “very aggressive investment in the North American side of the business” in the next few years to build on productivity.
“We've taken out a huge amount of excess capacity on the mill side,” he said. “We have also taken out aged facilities and under-scaled or inferior facilities on the converting side.” IP is “investing back aggressively now in the converting side in terms of a couple of new greenfields, some brownfields.” IP is also focused on investing in internal capabilities, equipment and facility modernization.
In North America, the company expects to “spend about 50% more per mill and converting plant than we did in 2025; we will again in ‘26 and ‘27, compared to the run rate the three years before there,” he added.
