Paper products manufacturer International Paper announced a series of changes to improve cost efficiency, strengthen customer service and sustain a competitive supply position as part of its ongoing transformation efforts. They include a major divestment and employee headcount reduction.

International Paper to Divest Global Cellulose Fibers Business

International Paper entered into an agreement to sell its Global Cellulose Fibers (GCF) business to American Industrial Partners (AIP) for $1.5 billion.

The transaction includes the issuance of preferred stock with an initial liquidation preference of $190 million. International Paper said the sale follows its previously announced strategic review of the GCF business as part of its broader plan to focus on sustainable packaging.

The GCF business produces pulp used in a range of consumer and industrial applications including towel and tissue products, diapers, feminine hygiene and incontinence care. The company also manufactures specialty pulp used in construction materials, paints, coatings and other products.

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In 2024, the GCF segment generated $2.8 billion in revenue. The segment operates nine manufacturing facilities and eight regional offices employing approximately 3,300 people worldwide.

“Over the past few months, GCF has done the hard work of aligning resources with its most strategic customers, implementing an 80/20 mindset, and creating a simplified and focused portfolio,” International Paper CEO Andy Silvernail said in an Aug. 21 news release. “These actions, combined with its talented and committed team made it an attractive investment for AIP to enter the pulp market and have positioned GCF for long-term success under new ownership.”

The deal is expected to close by the end of 2025 pending regulatory approvals.

Restructuring of North American Packaging Operations

International Paper is restructuring its North American packaging operations through a combination of new investment and facility closures aimed at optimizing its manufacturing footprint. The company plans to invest $250 million to convert the No. 16 machine at its Riverdale mill in Selma, AL for containerboard production.

As part of the restructuring, International Paper will permanently close several facilities including the containerboard mill and packaging facility in Savannah, GA, as well as the Riceboro containerboard mill and Riceboro Timber and Lumber operations. These actions will affect approximately 1,100 hourly and salaried employees.

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The Riverdale mill conversion is expected to be completed by the third quarter of 2026. The Riceboro and Savannah mills, along with the Savannah packaging facility, will be phased out by the end of September. The combined changes are projected to reduce the company’s annual containerboard production capacity by about one million tons. Severance packages and job placement assistance will be provided to eligible employees affected by the closures.

“We understand how deeply these decisions affect our employees, their loved ones and the surrounding communities,” IP North America Packaging Solutions business Executive VP Tom Hamic said in the release. “We are committed to supporting both our employees and customers as we navigate this transition.”