International Paper Company IP plans to build a state-of-the-art corrugated packaging facility in Atglen, PA, to expand its Industrial Packaging footprint in the northeastern United States. The facility will add around 150 team members.
The construction of the facility is set to start in first-quarter 2022. It is likely to be fully operational in first-quarter 2023.
International Paper continues to experience solid demand for corrugated and containerboard packaging in the Industrial Packaging segment, as it plays a critical role in supply chain to bring essential products to consumers. The booming e-commerce market and consumer-oriented markets will continue to support the demand in the near term.
However, Industrial Packaging and Global Cellulose Fibers businesses volumes are impacted by stretched supply chains. International Paper expects higher maintenance outage costs as well as escalating recovered fiber, energy, chemicals, wood and distribution costs to dent results in the near term.
Mergers and acquisitions are a key strategy for International Paper to strengthen its packaging business. In North America, the company envisions a large opportunity within its industrial packaging businesses, which continue to generate the best margins in the industry. The company is taking initiatives to expand margin over time across the business. The company’s spin-off of the Printing Papers segment will enable it to focus on the Industrial Packaging segment, and capitalize on the growing demand for corrugated packaging, cut costs and improve earnings.
International Paper continually evaluates its operations for improvement opportunities by focusing on its core businesses, realigning capacity to operate fewer facilities with the same revenue capability, closing high-cost facilities and trimming costs. The company has strategically offloaded businesses in China to focus more on its U.S. operations. It believes that it could cater to the Chinese and Asian markets more effectively by supplying globally competitive products, primarily through its Ilim joint venture in Russia and through exports from the United States and other parts of the world.