International Paper Announces Strategic Changes to Support Growth in North America

Rhea-AI Summary

International Paper (NYSE: IP) announced strategic operational changes in North America, including the exit from its molded fiber business and several facility changes. The company will convert its Reno facility to support packaging operations, close facilities in Marion, Ohio and Wichita, Kansas, and sell its Mexican operations to APSA.

The restructuring will impact approximately 134 employees in the U.S., while Mexican employees are expected to be retained by APSA. The company will provide affected employees with severance packages, outplacement support, and opportunities for internal transfers where possible.

Positive

• Strategic streamlining of operations to enhance focus on sustainable packaging solutions
• Conversion of Reno facility to support core packaging business
• Cost reduction through facility closures and strategic exit from non-core operations
• Mexican employees will be retained by APSA, minimizing job losses

Negative

• Loss of approximately 134 jobs in the U.S.
• Complete exit from the molded fiber business segment
• Closure of multiple facilities in Ohio and Kansas
• Divestment of Mexican operations including containerboard mill and recycling plants

Insights

Corporate Restructuring Analyst

IP's strategic restructuring to exit molded fiber and focus on core packaging represents difficult but necessary business rationalization amid industry headwinds.

International Paper's announced restructuring involves exiting the molded fiber business entirely, closing facilities in Ohio and Kansas, and divesting Mexican operations. These moves represent a significant operational pivot affecting approximately 134 employees across both hourly and salaried positions.

The conversion of the Reno facility to support packaging operations rather than molded fiber production signals IP's commitment to concentrate resources in its core packaging business. This strategic narrowing of focus is likely a response to challenging market conditions within the molded fiber segment, which has faced increased competition from alternative materials and potentially diminishing margins.

The divestiture of Mexican assets to APSA (Acabados de Papeles Santinados y Absorbentes) represents a geographic rationalization, with IP deliberately contracting its international footprint to strengthen its North American operations. This geographic consolidation should help streamline supply chains and reduce operational complexity.

While presented as part of a transformation toward becoming "a more focused and agile provider of sustainable packaging solutions," these moves fundamentally represent cost-cutting measures. The employee impact is being managed through standard corporate practices including outplacement support and potential internal transfers, though the actual absorption capacity for displaced workers remains unclear.

These changes align with broader industry trends where paper and packaging companies are consolidating operations, exiting lower-margin businesses, and focusing capital on segments with stronger growth potential. The emphasis on investments to "enhance quality, reliability and service delivery" suggests IP is redirecting resources from underperforming assets toward upgrading its core operations to improve competitiveness.

Company to Exit Molded Fiber Business; Additional Facility Changes Planned

MEMPHIS, Tenn., June 26, 2025 /PRNewswire/ -- International Paper (NYSE: IP; LSE: IPC), a global leader in sustainable packaging, today announced a series of strategic changes to strengthen its North American operations and better serve customers.

As part of this initiative, the company will:

• Exit the molded fiber business and convert the Reno, Nev. facility to support its packaging business
• Close its packaging facility in Marion, Ohio
• Close its recycling facility in Wichita, Kan.
• Sell its containerboard mill in Xalapa, Mexico and its recycling plants in Xalapa and Apodaca, Mexico to Acabados de Papeles Santinados y Absorbentes (APSA).

In the U.S., these changes will impact approximately 110 hourly and 24 salaried employees. In Mexico, APSA intends to retain current onsite team members at each location. International Paper is committed to minimizing the impact through job placement in existing vacancies, retirements and other internal opportunities. Affected employees will also receive severance and outplacement support where possible.

"These decisions are never easy because of the impact on our employees, their families and the communities in which we operate. We will assist employees and customers as much as possible through this transition," said Tom Hamic, executive vice president and president of IP's Packaging Solutions North America business. "While difficult, these decisions will help enable IP to prioritize the right geographies, customers and products and make investments in resources to support our growth in sustainable packaging."

These actions are intended to support International Paper's ongoing transformation initiatives to become a more focused and agile provider of sustainable packaging solutions. By streamlining operations, the company aims to make investments in facilities that are designed to enhance quality, reliability and service delivery.

About International Paper
International Paper (NYSE: IP; LSE: IPC) is the global leader in sustainable packaging solutions. With company headquarters in Memphis, Tennessee, USA, and EMEA (Europe, Middle East and Africa) headquarters in London, UK, we employ more than 65,000 team members and serve customers around the world with operations in more than 30 countries. Together with our customers, we make the world safer and more productive, one sustainable packaging solution at a time. Net sales for 2024 were $18.6 billion. In 2025, International Paper acquired DS Smith creating an industry leader focused on the attractive and growing North American and EMEA regions. Additional information can be found by visiting www.internationalpaper.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements reflect management's current views regarding planned operational changes, portfolio rationalization, and strategic actions designed to support long-term growth in North America. Forward-looking statements include, but are not limited to, the Company's expectations regarding facility closures, business exits, and the proposed sale of certain operations. These statements are subject to risks and uncertainties that could cause actual results and the timing of events to differ materially, including the risk that the Company may be unable to complete or fully realize the anticipated benefits of the strategic actions described herein. Additional risks and uncertainties are discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission ("SEC") on February 21, 2025, and subsequent reports filed with the SEC. The Company undertakes no obligation to publicly update any forward-looking statements contained in this press release, whether as a result of new information, future events or changes in expectations.

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SOURCE International Paper

FAQ

What strategic changes did International Paper (NYSE: IP) announce in June 2025?

International Paper announced its exit from the molded fiber business, conversion of its Reno facility to packaging operations, closure of facilities in Marion, Ohio and Wichita, Kansas, and the sale of its Mexican operations to APSA.

How many employees will be affected by International Paper's 2025 restructuring?

The restructuring will affect approximately 134 employees in the U.S., including 110 hourly and 24 salaried employees. Mexican facility employees are expected to be retained by APSA.

What support is International Paper offering to affected employees?

IP is offering severance packages, outplacement support, and opportunities for internal transfers through job placement in existing vacancies and retirements where possible.

What facilities is International Paper selling to APSA in Mexico?

International Paper is selling its containerboard mill in Xalapa and recycling plants in Xalapa and Apodaca, Mexico to APSA.

Why is International Paper making these strategic changes in 2025?

The changes are part of IP's transformation initiatives to become a more focused and agile provider of sustainable packaging solutions, prioritizing specific geographies, customers, and products while enhancing quality, reliability, and service delivery.