News Summary
International Paper Co. announced the closure of its historic Savannah mill, impacting 1,100 employees due to a strategic restructuring focusing on the packaging business. The Savannah mill, a key player in the local economy for nearly 90 years, will close along with another mill in Riceboro, resulting in significant job losses and economic concerns. As part of this shift, the company plans to invest in expanding production capacity at its Selma, Alabama mill.
Savannah, Georgia – International Paper to Close Historic Mill
International Paper Co. has announced the closure of its Savannah mill, along with another paper mill in Riceboro, Georgia, by the end of September 2023. This decision is set to affect approximately 1,100 employees, with about 800 jobs lost in Savannah and 300 jobs in Riceboro. The closure marks a significant industrial shift as the Savannah mill has been a cornerstone of the local economy for nearly 90 years.
Job Losses and Economic Impact
The impending closures will lead to substantial job losses in the region, sparking concern among local officials and community leaders. The Savannah mill, established in the mid-1930s, played a vital role in bolstering the economy during the Great Depression and has been an essential industrial presence in the area. The local chamber of commerce expressed disappointment regarding the impact on employees and the wider community, while Savannah Mayor Van Johnson and the Savannah Economic Development Authority also voiced their concerns.
Reasons for Closure and Strategic Shift
International Paper, headquartered in Memphis, Tennessee, is undergoing a strategic restructuring to refocus its efforts on the packaging business, selling its pulp division to American Industrial Partners for $1.5 billion. This transition is part of a broader strategy to realign operations in favor of more profitable segments of the market, with the company anticipating a $700 to $900 million accounting charge due to the diminished value of its cellulose fiber business, which is utilized in products such as towels and diapers.
As part of this restructuring, the company plans to write down the assets of the Savannah and Riceboro mills by $570 million and is expected to allocate $158 million for severance and closure costs. The shutdown of these two mills will result in a reduction of International Paper’s capacity to produce containerboard by 1.43 million tons (approximately 1.30 million metric tonnes).
Future Investments
While the closures represent a significant loss for the Savannah area, the company intends to invest $250 million to expand production capacity at its mill in Selma, Alabama. This investment is intended to bolster International Paper’s operational capabilities in a segment that the company believes will provide greater long-term success.
Historical Context and Environmental Concerns
The Savannah mill has a long history of contributing to the local economy, but it has also faced scrutiny regarding its environmental practices, including fines related to the discharge of wastewater. Despite this, the mill’s operational significance in the region cannot be overlooked, making the closure an impactful event for many families and the community at large.
Recent Developments in the Industry
This news follows a series of mill closures earlier this year in Louisiana and South Carolina, indicating a trend within the industry toward consolidating operations and focusing on more lucrative sectors. International Paper’s recent decisions underscore the ongoing challenges and transformations facing the paper manufacturing sector as consumer demands and market conditions evolve.
As the closure date approaches, employees and local residents await further developments while grappling with the substantial economic implications of the mills’ closure.
Deeper Dive: News & Info About This Topic
- WJCL: International Paper Savannah Riceboro Closure
- Savannah Now: International Paper to Close Facilities
- AJC: International Paper to Close Savannah Mills
- Google Search: International Paper closure Savannah
- Encyclopedia Britannica: Paper Manufacture
Author: STAFF HERE AUGUSTA WRITER
AUGUSTA STAFF WRITER The AUGUSTA STAFF WRITER represents the experienced team at HEREAugusta.com, your go-to source for actionable local news and information in Augusta, Richmond County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Arts in the Heart Festival, Westobou Festival, and Masters Week. Our coverage extends to key organizations like the Augusta Metro Chamber of Commerce and Greater Augusta Arts Council, plus leading businesses in manufacturing and healthcare that power the local economy such as Textron Specialized Vehicles, Cardinal Health, and Nutrien. As part of the broader HERE network, including HEREAtlanta.com and HERESavannah.com, we provide comprehensive, credible insights into Georgia's dynamic landscape.
