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Sylvamo, International Paper Terminate Georgetown Supply Agreement

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Sylvamo (NYSE: SLVM) and International Paper (NYSE: IP) have agreed to mutually terminate their supply agreement for uncoated freesheet, bristols and specialty papers at the Georgetown, South Carolina mill, effective December 31, 2024. Sylvamo is transitioning paper grades from Georgetown to its Ticonderoga, New York, and Eastover, South Carolina mills to maintain customer supply. The company aims to retain the most profitable products from Georgetown while reducing economic downtime in its mill system and improving product mix.

Sylvamo (NYSE: SLVM) e International Paper (NYSE: IP) hanno convenuto di terminare reciprocamente il loro accordo di fornitura per carta non rivestita, bristol e carte speciali presso il mulino di Georgetown, Carolina del Sud, a partire dal 31 dicembre 2024. Sylvamo sta trasferendo categorie di carta da Georgetown ai suoi stabilimenti di Ticonderoga, New York, e Eastover, Carolina del Sud, per garantire la fornitura ai clienti. L'azienda mira a mantenere i prodotti più redditizi provenienti da Georgetown, riducendo allo stesso tempo i tempi di inattività economica nel suo sistema di mulini e migliorando il mix di prodotti.

Sylvamo (NYSE: SLVM) e International Paper (NYSE: IP) han acordado terminar mutuamente su contrato de suministro para papel no estucado, bristol y papeles especiales en la fábrica de Georgetown, Carolina del Sur, a partir del 31 de diciembre de 2024. Sylvamo está trasladando las calidades de papel de Georgetown a sus fábricas de Ticonderoga, Nueva York, y Eastover, Carolina del Sur, para mantener el suministro para sus clientes. La empresa tiene como objetivo conservar los productos más rentables de Georgetown mientras reduce el tiempo de inactividad económica en su sistema de fábricas y mejora la mezcla de productos.

실바모(Sylvamo, NYSE: SLVM)와 국제종이(International Paper, NYSE: IP)는 사우스캐롤라이나주 조지타운 공장에서 비코팅 프리시트, 브리스틀 및 특수지에 대한 공급 계약을 2024년 12월 31일부로 상호 종료하기로 합의했습니다. 실바모는 고객 공급을 유지하기 위해 조지타운에서 뉴욕주 티콘더로가 및 사우스캐롤라이나주 이스토버로 종이 등급을 전환하고 있습니다. 회사는 조지타운에서 가장 수익성이 높은 제품을 유지하면서 공장 시스템의 경제적 다운타임을 줄이고 제품 믹스를 개선하는 것을 목표로 하고 있습니다.

Sylvamo (NYSE: SLVM) et International Paper (NYSE: IP) ont convenu de mettre fin mutuellement à leur contrat de fourniture de papier non couché, bristol et papiers spéciaux à l'usine de Georgetown, Caroline du Sud, à compter du 31 décembre 2024. Sylvamo est en train de transférer des types de papier de Georgetown vers ses usines de Ticonderoga, New York, et Eastover, Caroline du Sud, afin de maintenir l'approvisionnement des clients. L'entreprise vise à conserver les produits les plus rentables de Georgetown tout en réduisant les temps d'arrêt économiques de son système de meules et en améliorant le mélange de produits.

Sylvamo (NYSE: SLVM) und International Paper (NYSE: IP) haben vereinbart, ihre Liefervereinbarung für unbeschichtetes Freiblech, Bristol und Spezialpapiere in der Papierfabrik Georgetown, South Carolina, zum 31. Dezember 2024 gegenseitig zu beenden. Sylvamo wechselt Papierqualitäten von Georgetown zu seinen Werken in Ticonderoga, New York, und Eastover, South Carolina, um die Versorgung der Kunden aufrechtzuerhalten. Das Unternehmen strebt an, die profitabelsten Produkte aus Georgetown zu behalten und gleichzeitig wirtschaftliche Stillstandszeiten in seinem Mühlenbetrieb zu reduzieren und die Produktmischung zu verbessern.

Positive
  • Strategic transition of production to other mills maintains supply chain continuity
  • Focus on retaining most profitable products expected to improve product mix
  • Reduction in economic downtime across mill system should improve operational efficiency
Negative
  • Loss of Georgetown mill production capacity could impact overall output
  • Transition costs and potential operational disruptions during production relocation

Insights

The termination of the Georgetown supply agreement marks a significant operational shift for Sylvamo. The company's proactive approach in transitioning paper production to Ticonderoga and Eastover mills demonstrates strong supply chain resilience. This strategic realignment could yield improved operational efficiency and cost optimization through reduced economic downtime and enhanced product mix.

The planned transition period through December 2024 provides adequate time for supply chain adjustments and customer relationship management. The retention of profitable product lines while discontinuing less profitable ones suggests a potential margin improvement opportunity. The company's emphasis on high-return mill investments indicates a focus on operational excellence and sustainable growth.

This strategic restructuring has mixed financial implications. While the termination may cause short-term disruption, Sylvamo's preparedness since the 2021 IP spinoff suggests minimal operational impact. The focus on retaining profitable products and reducing economic downtime should support margin preservation. The company's commitment to investing in high-return projects signals potential for future earnings growth.

Investors should monitor the transition costs and potential impact on working capital during the consolidation period. The ability to maintain customer relationships and market share through this transition will be crucial. The neutral short-term impact could evolve into a positive long-term outcome if operational efficiencies are realized as planned.

MEMPHIS, Tenn.--(BUSINESS WIRE)-- Sylvamo (NYSE: SLVM), the world’s paper company, and International Paper (NYSE: IP) are mutually terminating a supply agreement for uncoated freesheet, bristols and specialty papers at the Georgetown, South Carolina, mill. The agreement will terminate Dec. 31, 2024.

Sylvamo is successfully transitioning many paper grades from Georgetown to its Ticonderoga, New York, and Eastover, South Carolina, mills to continue supplying customers. International Paper has announced plans to discontinue operations at the Georgetown mill.

“We have been preparing for this possibility since our 2021 spinoff from International Paper. We will support our customers through this transition and will retain the most profitable products from Georgetown, reducing economic downtime in our mill system and improving our mix,” said Jean-Michel Ribiéras, chairman and chief executive officer. “Looking ahead, we are confident in our future and our strategy to grow earnings and cash flow by continuing to invest in high-return projects in our mills and processes.”

More details are available in a presentation available at investors.sylvamo.com. This development will be discussed during the company’s next quarterly earnings call Tuesday, Nov. 12, at 10 a.m. EST/ 9 a.m. CST.

About Sylvamo

Sylvamo (NYSE: SLVM) is the world’s paper company with mills in Europe, Latin America and North America. Our vision is to be the employer, supplier and investment of choice. We transform renewable resources into papers that people depend on for education, communication and entertainment. Headquartered in Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales for 2023 were $3.7 billion. For more information, please visit Sylvamo.com.

Investors: Hans Bjorkman, 901-519-8030, hans.bjorkman@sylvamo.com

Media: Adam Ghassemi, 901-519-8115, adam.ghassemi@sylvamo.com

Source: Sylvamo

FAQ

When will Sylvamo (SLVM) terminate its Georgetown supply agreement with International Paper?

The supply agreement between Sylvamo and International Paper for the Georgetown mill will terminate on December 31, 2024.

Which Sylvamo (SLVM) mills will take over Georgetown's paper production?

Sylvamo is transitioning paper production from Georgetown to its Ticonderoga, New York, and Eastover, South Carolina mills.

What types of paper are affected by the Georgetown supply agreement termination?

The termination affects the supply of uncoated freesheet, bristols and specialty papers produced at the Georgetown mill.

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