News

International Paper (IP), the paper and packaging manufacturer, is looking to overseas markets to help counter reduced demand in North America, as input cost increases continue to hit profit margins.

Chief financial officer Tim Nicholls said there was still "solid global demand" for paper and packaging products, as IP yesterday (7 February) announced a 16.8% increase in operating profit before special items to $2.4bn (£1.24bn) for 2007.

IP's total annual sales fell marginally by 0.4%, although there was sales growth in the industrial and consumer packaging sectors, which increased by 6.5% and 12%, respectively, compared with 2006.

Pre-tax profit after special items fell 48% to $1.65bn. Special items included a $759m payment for the impairment of goodwill in the company's coated paperboard and Shorewood Packaging businesses.

IP chief executive John Faraci said "internal cost controls and focusing on the right customers and product segments" had helped expand margins.

"Our global investments are adding to revenue and profit growth and are helping to offset some demand decline in North America," he said.