15 May 2024

Well, that was obvious (at least in hindsight)



By Jim Thompson

Approximately a year ago, when Mark Sutton announced he was stepping down as CEO of International Paper, reading between the lines, one could discern the current board was out of ideas going forward. There were comments about taking some time finding a new leader, etc., etc.

OK, we don't know where we're going but we are going to find someone who will.

The came along the DS Smith acquisition and one might think this is it.

But May 1st, Andrew Silvernail, was announced as the new CEO of IP.

Anything interesting on Mr. Silvernail's resume? Perhaps a little stint as executive advisor to KKR.

Then, boom! A mere 7 days later, Suzano announces it is preparing a bid to acquire IP.

The day after this announcement, both IP and Suzano denied it. However, I don't think the story is over.

Is this all just a coincidence? You decide.

However, if Suzano is successful, I expect a flurry of announcements shutting North American pulp production capacity at what will be the old IP.

North American pulp production capacity is old and obsolete. The last new pulp mills in North America were built in 1989, It is impossible to permit a new one here. Plus our trees grow slow, especially when compared to trees in the Eucalyptus Belt.

As I always say, the pulp and paper industry continues to be interesting.

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Note: Neither I or anyone on the Paperitalo staff own any individual pulp and paper stocks.

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