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International Paper (IP) Buys Corrugated Box Plants in Spain

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International Paper Company (IP - Free Report) has acquired Spain-based two state-of-the-art corrugated box plants in a bid to expand its capabilities in the country’s largest industrial regions, Madrid and Catalonia. The terms of the deal have been kept under wraps.

Corrugated packaging business provides strategic growth scope for International Paper in the EMEA region. It offers customers with high-quality packaging solutions in the industrial, vegetable and fresh fruit, as well as e-commerce markets. The acquired packaging plants will become part of International Paper effective Apr 1.

The company’s corrugated packaging demand remains robust as it plays a key role in the supply chain to bring essential products to consumers. Moreover, International Paper is witnessing solid demand driven by processed food, beverage, proteins, chemicals, paper tissue and towel. The company will continue to benefit from the surging e-commerce demand as it has become a primary spending channel for customers owing to the pandemic-induced restrictions.

International Paper also continuously evaluates its operations for improvement opportunities by focusing on core businesses, re-aligning capacity to operate fewer facilities with the same revenue capability, closing high-cost facilities, and trimming costs. In sync with this, last December, the company announced its plan to spin off the Printing Papers segment into a stand-alone, publicly-traded company (SpinCo) to focus on the Industrial Packaging segment, and tap the growing demand for corrugated packaging, cut costs and improve earnings.

In fact, mergers and acquisitions remain a key strategy for International Paper to strengthen its packaging business. In North America, the company envisions a large opportunity within its industrial packaging businesses, which continues to generate the best margins in the industry. Recently, International Paper acquired Berkley International's Molded Fiber (pulp) manufacturing unit, Berkley MF LLC, in a bid to strengthen its sustainable packaging technology for e-commerce and food packaging applications.

Share Price Performance

International Paper’s shares have gained 82.4% over the past year compared with the industry’s rally of 91.3%.



Zacks Rank & Stocks to Consider

International Paper currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Impala Platinum Holdings Limited (IMPUY - Free Report) , Fortescue Metals Group Limited (FSUGY - Free Report) and Ashland Global Holdings Inc. (ASH - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 84% in the past year.

Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 182% in a year’s time.

Ashland has an estimated earnings growth rate of 83.9% for the current fiscal year. The company’s shares have appreciated 109.2% over the past year.

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