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IP Commits to Sustainable Forest Management

IP RFP WY RKT

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International Paper Company (IP - Analyst Report), a global paper and packaging firm, has recently pledged its commitment to sustainable forest management by joining the Global Forest & Trade Network in North America (GFTN) that focuses on eliminating illegal logging and promoting eco-friendly and socially secured forest management practices. With this initiative, International Paper has joined the WWF (World Wildlife Fund) led campaign to support and facilitate greater coordination of national and regional efforts for a responsible and credible forest management program.

Initially, International Paper’s participation will be limited to the fiber sourced from its North American and Brazilian mills, representing over two-thirds of its global fiber volume. The company expects its involvement and purchasing power to eventually force the suppliers for responsible forestry around the globe. In concurrence with this commitment, International Paper will issue an updated global fiber sourcing policy at its corporate website.

Earlier, in 2012, International Paper had announced a voluntary initiative to increase the third-party certified wood fiber by 15% by 2020. Joining GFTN partly fulfills this goal of the company and further supports to preserve the biodiversity and ecological balance. The company has already increased its sourcing of wood fiber from Forest Stewardship Council in the U.S. by over 1.2 million tons in the past five-year period, and expects a three-fold increase by 2014.

International Paper has historically followed an inorganic growth strategy to extend its operations. The company acquired Temple-Inland Inc. in Feb 2012 and the corrugated packaging business of Weyerhaeuser Co. (WY - Analyst Report) in Aug 2008.

International Paper expects the acquisition of Temple-Inland to yield synergies of $400 million by the end of 2013, derived largely from operations, freight, logistics, selling expense and overheads.  Moreover, the combination is likely to fortify the packaging business of North America by increasing its share in the corrugated packaging market to 34% from the existing level of 27%.

Headquartered in Memphis, Tenn., International Paper has manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. The company’s businesses include uncoated papers and industrial and consumer packaging. Employing approximately 70,000 people, International Paper has a strategic presence in more than 24 countries serving customers worldwide.

International Paper currently has a Zacks #3 Rank (Hold). Other notable stocks in the industry worth mentioning are Resolute Forest Products Inc. (RFP - Snapshot Report) and Rock-Tenn Company (RKT - Analyst Report), each carrying a Zacks Rank #1 (Strong Buy) each.

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