Dive Brief:
- International Paper announced on Thursday four site closures in Georgia affecting a total of 1,100 hourly and salaried workers: one containerboard mill in Riceboro and another in Savannah; a packaging facility in Savannah; and a timber and lumber mill in Riceboro.
- The Savannah containerboard mill will shut down in stages by Sept. 30, removing approximately 1 million tons of annual containerboard capacity, according to a securities filing Thursday. The Riceboro containerboard mill also will shut down in stages, by Sept. 12, reducing IP’s annual capacity by 430,000 tons.
- IP simultaneously announced another packaging business change: It will put $250 million toward converting the No. 16 machine at its Riverdale mill in Selma, Alabama, to produce containerboard instead of uncoated freesheet. IP anticipates the conversion will be completed in the third quarter of 2026, but it did not directly disclose how much containerboard capacity this would add to its system.
Dive Insight:
International Paper has closed numerous facilities over the last year as part of its streamlining efforts. IP says it is undertaking the new closures in Georgia as part of its “80/20” optimization approach, which CEO Andy Silvernail announced in July 2024 to transform the company.
With the newly announced closures in Georgia, since October 2024 the company has made closure announcements resulting in approximately 3,600 job cuts. In securities documents filed Thursday, IP breaks out the staffing impact from the new shutdowns, with approximately 300 at the Riceboro containerboard mill.
A worker adjustment and retraining notification that IP filed with the state on Thursday shows 691 employees will be cut at the Savannah mill starting Oct. 20. Another WARN filed at the same time lists 101 job cuts at the Savannah packaging facility starting Oct. 20.
IP said in a statement that it will support employees impacted by the new closures with severance packages and outplacement assistance. “We understand how deeply these decisions affect our employees, their loved ones, and the surrounding communities,” said Tom Hamic, executive vice president and president of International Paper's North America packaging solutions business, in the statement.
The Savannah mill has been operating for more than 85 years, Savannah Morning News reported in 2022. International Paper acquired it in 1999.
The Riceboro paper mill began production in 1968, and DS Smith acquired it in 2017. International Paper acquired DS Smith in January. In another securities filing Thursday, IP noted the facility closures reflect changes to the plan the company laid out in earlier DS Smith acquisition filings.
Other recent IP closures include:
- a July announcement for a container facility in Buena Park, California, affecting 71 people.
- a June announcement involving facilities in three states and 134 employees, including entirely exiting the molded fiber market.
- a May announcement for a box plant and sheet plant in Edinburg, Texas, affecting 137 employees.
- a May announcement for five packaging sites in the U.K., affecting 300 people.
- and a February announcement that affects 674 employees at four facilities, including the Red River containerboard mill in Campti, Louisiana.
Also on Thursday, IP announced that it would divest its global cellulose fibers business for $1.5 billion. The company has publicly discussed its exploration of such a sale for at least a year, most recently when Silvernail reiterated during IP’s Q2 earnings call on July 31 the intention for a sale by the end of 2025.
During that same call, Silvernail said the company’s transformation via the 80/20 model was on track. The strategy is based on the Pareto principle that 80% of outcomes occur from 20% of efforts, and it has involved significant cost cutting. While IP adopted the 80/20 plan a year ago, the acquired DS Smith business started implementation a few months ago. “Literally, in a two-year period of time, we’ve gone from a dramatically underperforming set of assets to one that is performing quite well and winning back share,” Silvernail said on the call.
He also noted ongoing issues with mill reliability in both North America and the Europe, Middle East and Africa segment. Silvernail described a capital redeployment strategy to drive mill improvements.
The capacity that IP plans to add to its system through the Riverdale mill conversion will not offset the entire loss from the Riceboro and Savannah sites. It expects the combined changes will result in a net loss of approximately 1 million tons of annual containerboard production capacity.
With the new reductions, so far in 2025 IP and other containerboard producers have collectively announced closures reducing North American production capacity by 3.9 million tons, approximately 9.5%, according to a calculation in a Thursday note to investors from Michael Roxland, senior paper and packaging analyst at Truist Securities.
Analysts had anticipated additional containerboard capacity cuts across the industry by year’s end. They suggested this might help to rebalance the market, which has suffered from a regional and global oversupply for years. Containerboard production fell 3% in the first half of 2025 compared with the same time period last year, according to data from the American Forest & Paper Association.
