Over the last year, International Paper has conspicuously undergone a business overhaul under the guidance of CEO Andy Silvernail, who launched the streamlining initiative shortly after taking the top role in May 2024. Silvernail dug into what’s behind the changes, and the differences between the United States and European markets, during a Sept. 4 session at the Jefferies Industrials Conference.
IP launched the 80/20 optimization plan in 2024, prompting series of changes. “It’s actually kind of breathtaking when you look at the number of actions that we have taken and the impact that we’ve had,” Silvernail said.
As a recent example of the numerous adjustments, Silvernail cited the three announcements that IP simultaneously made on Aug. 21: the sale of its global cellulose fibers business to private equity firm American Industrial Partners for $1.5 billion; the closure of four sites in Georgia, including two mills, that will affect 1,100 hourly and salaried employees; and investing $250 million to convert the No. 16 machine at the Riverdale mill in Selma, Alabama, to produce containerboard instead of uncoated freesheet.
The Savannah and Riceboro containerboard mills in Georgia are “aged or strategically inferior assets. And in our business, strategically inferior assets are simply a problem” with “terrible returns on capital,” he said. Keeping Savannah open would have required major repairs with a cost of roughly $300 million, and still that wouldn’t have produced the desired returns down the line, Silvernail said. Instead, the $250 million investment in Riverdale is not only cheaper on the front end but also will have notably better returns, he explained.
International Paper CEO describes wins, challenges with transformation plan | Packaging Dive