International Paper Announces Closure of Two Georgia Mills, Resulting in 1,100 Job Losses

What's Happening?

International Paper Co. has announced the closure of two paper mills in Georgia, including a Savannah mill that has been integral to the local economy for 90 years. The company plans to cease cardboard production in Savannah and Riceboro by the end of September, leading to the layoff of approximately 800 employees in Savannah and 300 in Riceboro. This decision coincides with the sale of International Paper's pulp division to American Industrial Partners for $1.5 billion, as the company shifts focus to its packaging business. The closures will reduce the company's containerboard production capacity by 1.43 million tons.

Why It's Important?

The closure of the Savannah and Riceboro mills marks a significant shift in International Paper's operational strategy, impacting the local economy and workforce. The layoffs will affect not only the mill employees but also the broader timber industry and related sectors in southeast Georgia. The decision reflects International Paper's efforts to streamline operations and focus on areas where it can maximize value, amid declining profits and market share. The economic repercussions will be felt across the region, with potential ripple effects on local businesses and communities dependent on the mills.

What's Next?

International Paper will take a substantial accounting charge to reflect the reduced value of its cellulose fiber business and will incur costs related to severance payments and closure expenses. The company plans to expand cardboard production at a mill in Selma, Alabama, investing $250 million in the process. Stakeholders, including local government officials and industry leaders, are likely to respond to the closures with efforts to mitigate the economic impact and support affected workers. The company's strategic focus on packaging may lead to further operational adjustments and investments in other regions.

Beyond the Headlines

The closure of the Georgia mills raises broader questions about the sustainability and future of the U.S. paper industry, particularly in regions heavily reliant on timber and paper production. The shift towards packaging reflects changing consumer demands and environmental considerations, as companies seek to reduce waste and improve efficiency. The long-term implications for the workforce and local economies will depend on the ability to adapt to these industry changes and explore alternative economic opportunities.