Nondenominational Church in Georgetown, SC

GEORGETOWN, S.C. (WCBD) — Hundreds of workers in Georgetown will soon be out of a job after International Paper (IP) announced the permanent closure of its Georgetown paper mill.

It came as a shock to many when the company announced Thursday morning that it would close the facility as part of its plan to increase profits into the future.

“I learned early this morning that International Paper would be closing, and [the company] has been a fixture in our community for almost 90 years,” said Mayor Carol Jayroe.

The closure is expected to impact 526 hourly employees and 148 salaried employees, according to the company.

“It’s all fresh at this point and I have been in touch with Lee Hewitt, one of our representatives, and he has talked with the Department of Commerce and the Department of Workforce, so we hope to get some help from them with helping folks find another place to have a job that is close by,” Jayroe said.

According to an IP press release, the company wants to increase the profits from its Global Cellulose Fibers business, which generated $2.9 billion last year. Closing the Georgetown paper mill will help meet that goal, officials said.

“International Paper is committed to maximizing value for our shareholders,” Chairman and CEO Andy Silvernail said.

“It’s a financial decision, that’s all it is,” Jayroe said.

The company is offering severance packages, outplacement services, and access to mental health resources to impacted employees.

Nikki Ewing, the Vice President of Marketing for Georgetown Kraft Credit Union, said while the news is devastating, the city will get through it. The credit union was started by a group of IP employees in the 1950s.

“We are a strong community,” she said. “We help support each other and get through bad times, and this is, I think, definitely one of those times that you will see this community rise up and support each other. Not just the individual employees but everybody in this community is going to give back and give up to where we can help them.”

The closure is expected to happen in phases, but officials said the mill will be completely shut down by the end of December.

International Paper announced plans Thursday to close its Georgetown, South Carolina, plant and shift focus away from its global cellulose fibers business in favor of sustainable packaging solutions.

The closure of the Georgetown mill, which produces about 300,000 tons of fluff pulp, is expected to impact 526 hourly employees and 148 salaried employees.

The cellulose fibers business generated $2.9 billion in revenue in 2023 between eight mills and two converting facilities in three countries. Memphis-based International Paper is planning to look at alternatives away from that sector, according to a news release. (Cellulose fibers create absorbent pulp for application in personal care products and specialty pulp in textiles and construction materials.)

The Georgetown mill will be permanently closed by the end of 2024. The mill produces approximately 300,000 tons of fluff pulp, that byproduct will be retained for International Paper's global cellulose fiber industry use, according to a news release.

The Georgetown closure news comes a few weeks after International Paper announced plans to lay off 650 employees, including 400 in Memphis.

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International Paper's quarterly earnings

Also on Thursday, International Paper released its third-quarter earnings report. The earnings call provided context for the company's ongoing long-term strategy amid several recent changes.

"Our third-quarter earnings are above our outlook," International Paper CEO Andy Silvernail said. "Higher prices across the portfolio, including benefits from our packaging go-to-market strategy were supported by a moderately improving box demand environment. We also had higher operating costs and lower volumes due to seasonality and commercial actions to improve profitability."

In the third quarter, International Paper saw net earnings worth $150 million and adjusted operating earnings of $153 million. In 2023, those figures were $165 million and $224 million, respectively. The adjusted operating earnings share was slightly below third-quarter 2023 figures dropping from $0.64 per share to $0.44 per share.

Third-quarter revenue also dipped slightly at $4.69 billion compared to $4.62 billion in third quarter of 2023. Between the respective business operations, industrial packaging saw a notable third-quarter loss dropping from $291 million in the second quarter to $197 million in the third quarter, according to reports.

The losses, Silvernail said, were impacted by higher operating costs, outage costs and one less shipping day last quarter.

Silvernail provided some outlook into next year and the coming quarters, noting the company is targeting Greenfield and Brownfield sites for future investment. Those investments will be discussed in more depth during the fourth quarter earnings call, he said. The company is also shifting from a matrix structure to a larger customer-focused strategy, he said.

"It is too early to call a turn, but leakage has slowed," Silvernail said.

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International Paper's acquisition of DS Smith

Additionally, International Paper is in the midst of acquiring London-based DS Smith for $7.2 billion. The all-share deal was first announced in April.

During Thursday's earnings call, Silvernail said the DS Smith deal is expected to close in the first quarter of 2025.

Reuters contributed to this report.

Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X:@neilStrebig.

International Paper on Thursday announced it will permanently close its pulp and paper mill in Georgetown, South Carolina, by the end of 2024. A total of 674 jobs (526 hourly and 148 salaried employees) will be impacted.

As of Thursday morning, there wasn’t a related WARN notice published in South Carolina’s public database, but it’s the single largest concentrated round of layoffs that the Memphis, Tennessee-based company has announced in recent weeks, of more than 1,500 total disclosed across multiple states. However, the Georgetown site is less focused on packaging.

The Georgetown mill produces 300,000 tons of fluff pulp for consumer products like diapers. Even with the closure, IP said it plans to retain customers and service them from other IP sites. The mill also has a supply agreement for uncoated freesheet papers with Sylvamo. That company, also based in Memphis, sells products such as copy and printer papers and those converted into envelopes, as well as specialty papers used in items like paper shopping bags or flour bags. IP and Sylvamo are ending that agreement Dec. 31.

The Georgetown closure comes as IP plans to “review strategic options” for its global cellulose fibers business. CEO Andy Silvernail said on a third-quarter earnings call Thursday that while the company will “evaluate every option ... the most likely option is a sale” and there have been multiple interested parties. IP retained Morgan Stanley as an advisor to review these options.

Silvernail said exiting the Georgetown mill “significantly lowers complexity and costs.” CFO Tim Nicholls said IP anticipates the Georgetown closure will decrease GCF business earnings by approximately $220 million in the fourth quarter due to depreciation expenses.

The GCF business reported $710 million in net sales during Q3, down from $725 million in Q3 of 2023, though profits were up.

Silvernail, who most recently served as an executive advisor in private equity, is now about six months into the job. He had alluded to forthcoming capacity reductions on the company’s second-quarter earnings call.

“As you look region by region, you have places that have way too much capacity, and you have places that do not have enough, and one of the mistakes that we have made over time is we have not made the tough choices,” said Silvernail. “Taking capacity out of places where we shouldn’t have it, and then investing aggressively in places that we should have it” is what IP will focus on as it tries to find “that right balance.”

The South Carolina announcement is the latest of several big closure and layoff announcements by International Paper in October:

The plumes of white steam that have filled the sky over the city of Georgetown since 1937 will vanish by the end of the year. International Paper Co. announced Thursday that it will close the mill, which has 526 hourly and 148 salaried employees.

“This decision is especially difficult because of the impact on hard-working employees, their families and the surrounding communities,” the mill manager, Bernie Chascin, said in a statement.

The employees will be offered severance benefits, outplacement services and access to mental health resources, the statement said.

The closing was announced along with a review of “strategic options” for IP’s $2.9 billion global cellulose fibers business, which has eight mills in three countries. It produces absorbent pulp for personal care products and as a raw material for textiles, construction materials and other items.

The Georgetown mill produces 300,000 tons of the material, also known as fluff pulp. Production will be transferred to other mills.

The mill also produces “uncoated freesheet papers” for Sylvamo, a company that was spun off from IP in 2021.

Sylvamo, which is based in Memphis, Tenn., along with IP, said on Thursday that it was terminating its contract for the Georgetown mill’s product, which was about 250,000 tons this year.

Sylvamo said in a statement that it had been preparing for the possibility of a shutdown in Georgetown since 2021.

The announcement caught local officials by surprise. A statement from Georgetown County said staff were talking with IP to learn more about the closing, which it called “devastating.”

The county plans to work with other agencies and local business to address the impact and said in its statement that “there will be new employment opportunities coming in the near future.”

“The shutting down of the mill is unfortunate because of the positive impact it has sustained over the years in Georgetown,” Mayor Carol Jayroe said in a statement. “Our hearts go out to those being affected by this closure.”

Beth Stedman, president of the Georgetown County Chamber of Commerce, noted in a statement that the impact will extend to local businesses that supply and service the mill. She added that IP has also been a supporter of schools and nonprofits in the county.

“We encourage community members to come together and support one another – especially our friends and neighbors who are most directly impacted by the mill’s closure,” Stedman said.

The town of Georgetown, South Carolina suffered a potential death blow on Thursday morning (October 31, 2024) when International Paper delivered notices to hundreds of employees that its mill there would close by the end of the year – leaving them without work heading into the holidays.

And leaving the community to fill a massive economic void…

Founded in 1898 in Corinth, New York, International Paper bills itself as “a leading global producer of renewable fiber-based packaging, pulp and paper products” with manufacturing operations located in “North America, Latin America, Europe and North Africa.”

The company’s Georgetown mill was built in 1936 and by 1942 had become “the largest kraft paper mill in the world,” according to the city. Originally known as the Southern Kraft Paper Mill, it was one of eight mills constructed by International Paper as the company embarked on an aggressive expansion.

Over the intervening decades, the plant has served as a key sustainer of the county – which is home to an estimated 65,000 people.

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The “permanent closure” of the Georgetown mill will take place “in stages,” according to a news release from the company, with “full closure expected by the end of 2024.”

Per the release, the mill is being shut down because International Paper is terminating a contract with one of its customers – Sylvamo – effective December 31, 2024. International Paper is also transferring the mill’s fluff pulp capacity to “other mills.” Fluff pulp is an absorbent, chemical pulp used in sanitary napkins, disposable diapers and female hygiene products.

Hundreds of employees will lose their jobs effective December 2, 2024, per the notices handed out.

“This decision is especially difficult because of the impact on hard-working employees, their families and the surrounding communities,” Georgetown mill manager Bernie Chascin said in a statement.

Initial reports indicate the loss of 674 jobs – 526 hourly positions and 148 salaried employees – from the mill itself. Total job losses associated with the plant’s closure are expected to be much higher, however. Loggers, truckers, tree farmers and numerous other industries are expected to be impacted – to say nothing of the disastrous impact to the local business community that comes with so many incomes evaporating on such short notice.

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The news hit the community like a proverbial ton of bricks.

“I have no clue how we are going to survive without hubby’s job,” Georgetown resident Amanda Rae Hartley wrote on Facebook. “This town is going to die.”

“This is absolutely heartbreaking,” Hartley added. “Life just keeps hitting us over and over. It just never gets better.”

“The closing of the Georgetown Paper mill is a hard blow to our town,” another Georgetown resident wrote. “Not only does it affect the nearly 700 employees but it will have a trickle effect to loggers , businesses, restaurants, etc. Pray that we can overcome this… it will be hard and only by God will we get through it.”

“Also sad for the children … its going to be a sad Christmas for some,” the resident added.

County officials issued a statement in the aftermath of the plant closure announcement referring to the news as “devastating.”

“IP has been a great corporate citizen here for nearly 90 years, and the loss is devastating,” the statement noted. “In addition to the elimination of nearly 700 jobs, there are further community impacts including to contractors, small businesses and nonprofits.”

Officials said their economic development was meeting with International Paper to get “more information” and would also be “meeting with other officials at the local, regional and state levels in various agencies, along with business partners to plan the way forward.”

“There will be new employment opportunities coming in the near future and we need to coordinate efforts to best serve our community,” the statement added.

While Georgetown reeled from the news, International Paper’s stock hit a three-year high in the aftermath of the announcement, climbing more than 13 percent in early trading to $55.40 per share.

This is a developing story… please check back for updates.

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ABOUT THE AUTHOR …

Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children.

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