International Paper to close two packaging facilities in the US
Key takeaways
- IP will close US packaging sites in California and Kentucky as part of a footprint-streamlining strategy following its DS Smith acquisition.
- The company says the move will improve customer service and focus investments on higher-performing facilities, while reports indicate cost-cutting and weak demand could be factors.
- IP plans to support affected workers through attrition, retirements, and relocation opportunities.
International Paper (IP) has announced the closing of its US packaging production sites in Compton, California, and Louisville, Kentucky.
“Making the decision to close a facility is incredibly difficult, especially knowing the impact it has on our team members and their families,” says Tom Hamic, executive vice president and president for North American Packaging Solutions at IP.
“We are sincerely grateful for the contributions of our departing team members, and we are fully committed to supporting them through this transition.”
Reasons for the closures
With the closures, the company says it aims to improve its customer service.
“IP is undergoing a transformational journey to become a stronger, sustainable packaging solutions company. A critical step in this journey is to streamline IP’s footprint to focus investments on facilities that will best serve customers and accelerate strategic initiatives to improve quality, reliability, and service delivery.”
Meanwhile, Reuters reported that IP is closing the two sites to cut costs and consolidate operations due to weak demand.
However, a recent report from the American Institute for Packaging and the Environment, the Consumer Brands Association, the Consumer Technology Association, and Smithers found that packaging demand is rising in the US.
The research highlights that a population boom and the COVID-19 pandemic had led to such increasing demand.
IP’s operational changes follow its acquisition of DS Smith earlier this year.
The upcoming closures will impact 125 employees in Compton and 93 in Louisville. IP says it will “work to minimize the impact on employees by using attrition, retirements, and current vacancies at other IP locations.”
