International Paper restructures operations with facility closures amid strategic shift

International Paper has announced the permanent closure of four U.S. facilities as part of its ongoing strategy to streamline operations and enhance efficiency in its sustainable packaging solutions business. The closures will significantly impact the company’s containerboard capacity, reducing production by approximately 800,000 tons annually.

The affected sites include the Red River containerboard mill in Campti, Louisiana; a recycling plant in Phoenix, Arizona; a box plant in Hazleton, Pennsylvania; and a sheet feeder facility in St. Louis, Missouri. All four locations will cease operations by the end of April 2025.

The company has positioned these closures as a necessary step in realigning its resources toward more profitable and efficient facilities, ensuring long-term sustainability in a rapidly evolving packaging industry.

How Will These Closures Impact International Paper’s Workforce?

The shutdowns will affect a total of 674 employees, comprising 495 hourly workers and 179 salaried employees. International Paper has stated that while the decision was difficult, it is committed to minimizing the impact on its workforce.

To ease the transition, the company will rely on attrition, retirements, and reallocation of workers to vacancies at other International Paper locations. Additionally, employees will have access to outplacement services, mental health support resources, and severance benefits where applicable.

Tom Hamic, executive vice president and president of North American Packaging Solutions at International Paper, emphasized the company’s recognition of its employees’ contributions, stating that the decision to close these sites was made after careful consideration of both business needs and the well-being of its workforce.

What Does This Mean for International Paper’s Containerboard Production?

With the closure of the Red River containerboard mill, International Paper will significantly reduce its containerboard capacity, aligning production with market demand and operational efficiency. The move follows a broader trend in the paper and packaging industry, where companies are increasingly prioritizing sustainability, cost management, and supply chain optimization.

By shutting down less efficient facilities, International Paper aims to enhance service delivery, improve product quality, and strengthen its leadership in the sustainable packaging sector. This strategic adjustment ensures that the company can invest more effectively in advanced technologies and high-performing mills that support its long-term growth objectives.

How Does This Align with International Paper’s Recent Merger with DS Smith?

These closures come shortly after International Paper’s merger with DS Smith, a major player in sustainable packaging solutions. The combination, finalized on January 31, 2025, has positioned International Paper as a dominant force in the global packaging industry, with a strong presence in North America and the EMEA region.

The integration of DS Smith’s capabilities with International Paper’s existing operations is expected to drive innovation, efficiency, and enhanced sustainability. By streamlining its manufacturing footprint, International Paper can focus on facilities that support its newly expanded global portfolio, ensuring that customers receive high-quality, reliable, and cost-effective solutions.

According to Andy Silvernail, Chairman and CEO of International Paper, the merger represents a pivotal step in strengthening the company’s market leadership. He highlighted that “with a stronger portfolio of sustainable packaging solutions, the combination of International Paper and DS Smith enhances our offerings, increases innovation, and expands our geographic reach.”

What Are the Broader Implications for the Packaging Industry?

The closure of multiple facilities underscores the shifting dynamics of the containerboard and packaging industry, where companies are focusing on sustainability, cost efficiency, and market demand alignment. As the industry continues to move toward eco-friendly materials and processes, companies like International Paper are making strategic decisions to remain competitive in a rapidly evolving market.

Experts suggest that consolidation and investment in high-performing facilities will be key trends shaping the packaging sector in the coming years. With a growing emphasis on sustainable packaging solutions, companies must adapt to environmental regulations, changing consumer preferences, and advancements in manufacturing technologies.

What’s Next for International Paper?

Looking ahead, International Paper is expected to focus on optimizing its newly combined operations with DS Smith, investing in high-value packaging solutions and expanding its reach in key markets. The company’s strategy revolves around enhancing product quality, strengthening supply chain resilience, and maintaining leadership in the sustainable packaging space.

Despite the challenges associated with facility closures and workforce reductions, International Paper remains committed to long-term growth and industry leadership. By realigning its production capacity, leveraging synergies with DS Smith, and prioritizing innovation, the company is positioning itself for sustained success in the evolving global market.