International Paper (NYSE: IP) today announced a series of actions to further strengthen and optimize its manufacturing system to meet customers’ needs. The company will permanently close its containerboard mill in Orange, Texas, and will permanently cease production on two of its pulp machines – the #20 machine in Riegelwood, N.C., and the #4 machine in Pensacola, Fla.
“Decisions like these are extremely difficult, because of the impact on our employees, their families and the communities in which we operate,” said Chairman and CEO Mark Sutton. “We are grateful to our employees in Orange, Riegelwood and Pensacola for their significant contributions to the company over the years. We are committed to providing severance benefits, outplacement assistance and more to help employees during this time.”
In total, approximately 900 positions will be impacted. Wherever possible, the company’s goal is to minimize the impact on employees by using current vacancies, retirements, normal attrition and other roles at International Paper.
The permanent closure of the Orange mill will reduce the company’s containerboard capacity by approximately 800,000 tons. The company’s remaining containerboard mill system in North America will include 17 mills with an annual production capability of 13MM tons. The actions in Pensacola and Riegelwood will reduce IP’s pulp capacity by approximately 500,000 tons (300,000 tons fluff pulp and 200,000 tons southern bleached softwood). The company’s remaining pulp mill system will include eight mills with an annual production capability of 2.7MM tons.
“We believe strongly in the attractive, long-term fundamentals of our businesses and these actions further strengthen our competitive platform. Our optimized mill system, with its broad capabilities, gives us the flexibility to meet our customers’ needs today and in the future,” said Sutton.
The company expects the Orange mill and the #20 machine in Riegelwood to cease production by the end of the year. The #4 machine in Pensacola is currently idled and will not resume production.
