International Paper 2012 Annual Report Download - page 8

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OUR BOXES SHIP, STORE AND HELP SELL THE
GOODS AND MATERIALS THAT BRING THE
WORLD CLOSER TOGETHER.
INDUSTRIAL PACKAGING
International Paper’s industrial packaging products ship, store and help sell the
goods and materials that bring the world closer together. As the premier global
manufacturer of containerboard and corrugated packaging, our Industrial
Packaging business spans containerboard mills, converting plants and recycling
centers across North America, South America, Europe and Asia. In February
2012, International Paper finalized the $4.4 billion acquisition of competitor
Temple-Inland and gained five mills, nearly 60 container facilities, extensive
employee talent and a host of world-class customers. The year was marked by
industry leading margins lifted by Temple-Inland synergies and the impact of
highly engaged, motivated employees across all geographies. Over the last five
years, International Paper has truly transformed our North American Industrial
Packaging business. With the help of two acquisitions, the business has grown
from $4 billion in revenue in 2007 to nearly $12 billion in 2012.
Since our Day One activities in February 2012, International Paper and former
Temple-Inland employees have invested significant time executing ahead of plan
and exceeding targets over every metric—including people development, opera-
tional excellence and financial results. In the first full quarter since completing
the transaction, Temple-Inland’s base business plus the synergies made this a
meaningfully accretive acquisition. By third quarter 2012, we stood at a $300
million synergy run rate—a full 16 months ahead of plan. By fourth quarter, we
surpassed $360 million in run rate synergies. And by year end, we achieved a
direct line of sight on a revised synergies target of $400 million, which is essen-
tially $100 million better than the original plan and one year ahead of target. It’s
an impressive achievement and just the beginning as the Industrial Packaging
team moves into optimization phase, meeting customer needs and seeking to
generate additional earnings through selective efficiency and improvement initia-
tives in 2013 and beyond.
In the year ahead, International Paper’s Industrial Packaging business will again
expand its global presence, as we recently entered the Brazilian corrugated
packaging market through a venture with Jari Celulose, Embalagens e Papel
INDUSTRIAL PACKAGING
46%
PERCENTAGE OF
TOTAL REVENUE
5%
Asia
8%
Europe,
Middle-East
& Africa
87%
North
America
INDUSTRIAL PACKAGING
REVENUE MIX