The Georgetown Paper Mill in South Carolina that has acted as the backbone to the Georgetown County workforce is abruptly shutting down with little warning and explanation. What is the real reason the mill is closing? Let’s take a look at some of the contributing factors:
Georgetown Paper Mill Closes Without Warning
On October 31, 2024, it was announced that International Paper would be permanently shutting down the Georgetown County Paper Mill that has supported local revenue and hundreds of families for over 80 years. The Georgetown Mill manager, Bernie Chascin, told media: “The decision is especially difficult because of the impact on hardworking employees, their families and the surrounding communities.”
International Paper says this closure will impact 526 hourly employees and 148 salaried employees.
Paper Mills Close Across Country
In October of 2023, International Paper shut down three plants and some of their pulp machines “as part of an optimization plan.” These closures included a containerboard mill in Orange, Texas that affected 565 employees and two of its pulp machines in Riegelwood, North Carolina (200 employees) and Pensacola, Florida (100 employees.)
In September of 2023, Georgia-Pacific closed the Foley Cellulose mill in Perry, Florida that impacted around 525 employees. The company stated that it is a “strategic decision” because it does not believe the mill can competitively serve customers despite significant investments since 2013.
Michael Roxland, senior paper and packaging analyst at Truist Securities stated in an analysis that this decision to close these plants is “consistent with our thesis that leading domestic producers such as IP would continue to actively manage supply and demand through capacity rationalization to maintain pricing stability.” Even with these closures, International Paper will still be the containerboard leader in North America as he stated, “leaving the company best positioned to capitalize on an improving containerboard market, which we believe could be forthcoming.”
Leadership was Replaced Two Weeks Prior to Shut Down
Around the same time these closures were announced last year, on September 6, 2023, International Paper CEO Mark Sutton announced that he will be stepping down but will stay with the company until IP finds a successor. Sutton worked for International Paper his entire 39-year career by working up through the company and became CEO in November 2014.
Nearly a year later on September 11, 2024, International Paper announced that Sutton was finally stepping down and welcoming new Chairman of the Board of Directors Andy Silvernail effective October 1st, 2024, who became the CEO at IP in May 2024.
According to his LinkedIn, Andy Silvernail began his career in equity research as Fidelity Investments and has spent over two decades in leading global corporations in the manufacturing and tech sectors.
Before taking the new gig at IP, he served as the Founder and CEO of 5 Nails, LLC and Executive Advisor for KKR & Co. Inc. 5 Nails, LLC is a “business around investment and advisory, around unleashing potential in industrial life products and consumer products companies.” The 5 Nails, LLC name came from the five members of his family.
According to the podcast “Mainely Matters”, Silvernail has a long history in philanthropy, including serving as a national trustee of the Boys & Girls Club of America. Andy Silvernail is a member of the Aspen Institute, was in the Class XVI: 2012 True North Class and is a graduate of the Institute’s Henry Crown Fellowship Program. To learn more about the Aspen Institute and its state chapter in South Carolina, click HERE.
He is from a small town in Maine, majored in politics at Dartmouth College, attended Harvard Business School, and married his high school sweetheart.
Key Players on the International Paper Board of Directors
IP has several interesting board of directors but here are a few members that we found the most interesting:
Jamie Beggs is the Senior Vice President and Chief Financial Officer of the Avient Corporation, a provider in specialized and sustainable materials solutions and services. Among Avient’s 2030 Sustainability Goals, the “on track” to reduced greenhouse gas emissions and source renewable energy by purchasing green electricity. Avient has their own pages for their diversity and inclusion management approach and PRIDE at Avient.
Scott Tozier sits on the Board of Directors of IP and is also a strategic advisor at Albemarle Corporation. Albemarle is global lithium company that has lithium mines in Western North Carolina and Eastern Tennessee, and is looking at opening mines in South Carolina. Albemarle has aligned their “purpose and values” to the UN Sustainable Development Goals and has a huge Diversity, Equity, and Inclusion (DEI) program that includes an inaugural DEI report, a film, a DEI Steering Committee, and employee resource groups such as Black Employees Connect and Pride Connect to name a few.
International Paper Hooked Into “Green Energy” Push?
International Paper has an inaugural “Sustainability Report” that lists their goals and recent awards. If you take a look through the entire 135 pages, the vast majority of the report is about achieving “Responsible Governance”, “climate risk management”, and “ESG governance” with their Vision 2030 goals. Two of these awards included receiving a AA rating from the MSCI ESG Ratings assessment in 2023 and being a part of the FTSE4Good equity index series that is “designed to facilitate investment in companies that meet globally recognized corporate responsibility standards.”
After looking through International Paper’s website and documents, it makes one wonder whether or not these paper mill closures are a result of an ESG “green energy” push. To learn more about what ESGs are and how they are moving into SC, read this breakdown from the executive director of the Mom and Pop Alliance, Diane Hardy.
IP’s move to scale back seems like a calculated move, however they are leaving plenty of room for the imagination since they are not telling the public as to why they are closing down so many mills. Whatever the cause, my heart goes out to all of the families negatively impacted by this unexpected development.
