On One Hand, Frequent Factory Closures And Heavy Acquisitions Are The Same As What Grand Moves Is International Paper Making?

On one hand, frequent factory closures and heavy acquisitions are the same as what grand moves is International Paper making?

Recently, the international paper industry has been moving frequently, with two completely opposite operational moves drawing industry attention. On one hand, the company continues to scale back its business. International Paper continues to promote global capacity optimization and business restructuring, with many factories entering phases of closure, consolidation, or capacity reduction, accompanied by large-scale job adjustments.

On the other hand, it is also planning to build high-quality production capacity. On May 18, International Paper announced the acquisition of Derma Corrugated Packaging Company (DCP), located in Dover, Delaware, USA, strongly strengthening its East Coast corrugated packaging production, processing, and delivery capabilities, further consolidating its core North American market presence.

Factory closures and expansions happen simultaneously-why does the international paper industry frequently "perform self-surgery"? And why did they spend huge sums to acquire a corrugated factory?

Aggressive "slimming down": cutting inefficient assets and stripping redundant capacity burdens

In recent years, the international paper industry has been continuously downsizing. In August 2025, it will shut down two paper mills located in Georgia. In the same month, International Paper sold its global cellulose fiber (GCF) business to American Industrial Partners (AIP) for $1.5 billion. The GCF business mainly produces high-quality pulp widely used in personal care products, building materials, and other fields.

Entering 2026, International Paper will gradually shut down two more packaging plants in Compton, California and Louisville, Kentucky. It was also announced that the Union Gap carton manufacturing plant in Washington State will be shut down by the end of the year.

A series of large-scale factory closures and capacity reductions have been part of the international paper industry's gradual strategic slimming and upgrading in recent years, with the core goal of focusing on core business, eliminating inefficiencies, and optimizing structure. The adjustment focus is mainly on outdated factories with low operational efficiency and uncompetitive cost structures, as well as production bases where regional demand has declined significantly.

From the overall industry environment, the global paper packaging sector currently faces continued weak demand for traditional cultural paper and ordinary industrial paperboard. Coupled with regional supply-demand imbalances, raw material price fluctuations, and rising logistics and labor costs, many old, small, and high-energy-consuming production lines have fallen into profitability difficulties. The utilization rate of traditional paper product capacity continues to decline, and inefficient capacity continues to drag down the group's overall profitability.

In recent years, the international paper industry has been accelerating its transformation. The company has repeatedly mentioned that its strategic focus is shifting toward the packaging business. The "80/20 principle" is the core strategy of its transformation, meaning 80% of results come from 20% of key factors. By implementing the "80/20 principle," International Paper divests non-core, low-efficiency assets, concentrating resources on its strengths and its core packaging business to achieve efficiency improvements and profit growth.

International Paper improves overall capacity utilization and operational efficiency by shutting down inefficient facilities in bulk, streamlining redundant personnel, and reducing ineffective operating costs, continuously injecting cash flow into the company and reserving ample funds for future high-quality layouts.

Precise "ramping up": targeting the corrugated sector to capture incremental packaging markets

Alongside the "factory closures," international paper continues to ramp up efforts in the packaging sector. The Delmar Val Corrugated Packaging Company acquired by International Paper is renowned as a modern "gigafactory" in the U.S. Mid-Atlantic logistics supply chain.

From a location advantage, the factory is situated in the core area of the U.S. East Coast, filling the capacity gap for international paper in the Mid-Atlantic. Relying on localized production and processing capabilities, International Paper can further shorten regional delivery cycles, reduce logistics costs, and serve regional customers more efficiently.

From the perspective of track trends, with the implementation of global sustainable development policies, the continuous expansion of the e-commerce logistics industry, and the surge in demand for green upgrades among brand enterprises, the demand for corrugated packaging continues to climb, and International Paper is further shifting resources toward this sector.

In fact, this acquisition is not a one-point layout by International Paper in recent years in the corrugated packaging sector, but rather part of its ongoing push to build a global packaging map. By 2025, International Paper will complete the acquisition of UK packaging giant DS Smith, accelerating its transformation into a "global sustainable packaging solutions platform" through this acquisition. In April 2026, International Paper announced the acquisition of North Pacific Paper Company (NORPAC) to expand its business capabilities.

In addition, International Paper continues to invest in building new high-efficiency packaging plants. In March 2026, International Paper announced plans to build a modern green packaging plant in Mississippi, USA, replacing old capacity with an automated and intelligent new plant and further optimizing its North American corrugated packaging network.

Judging from the recent actions of the international paper industry, its logic is becoming increasingly clear. On one hand, shutting down inefficient, outdated, and insufficiently profitable traditional capacity; On the other hand, by acquiring high-quality packaging assets, building new modern factories, and strengthening regional supply networks, resources are further concentrated on high value-added packaging and sustainable packaging systems.

The strategic layout of the international paper industry provides a certain development reference for the printing and packaging industry, which is currently undergoing a reshuffling period. First, proactively eliminate outdated production capacity and reject inefficient internal friction. For printing and packaging companies, proactively optimizing capacity structure, streamlining inefficient businesses, and improving operational efficiency may be more important than simply expansion. Second, focus on high-value tracks to gain long-term growth potential. In the future, it will be more important to upgrade products around customer needs and stay closer to end markets, giving companies more opportunities for long-term growth. Finally, optimize regional layout and improve service efficiency. Whether in the domestic market or overseas expansion, "proximity to customers, rapid delivery, and regional collaboration" will become increasingly important.

As industry reshuffling accelerates, extensive expansion is becoming a thing of the past. Companies that can precisely focus on core businesses, continuously optimize operational efficiency, and quickly meet market demands often navigate cycles faster.