News

International Paper (IP), the packaging, paper and forest product group, has reported second quarter profit of $227m (£114m), up 19%, because of higher prices and investments outside the US, particularly in Russia.

The Memphis-based group's 50% investment last year in Russia's Ilim Holding generated $32m in profit in the quarter, up from $17m in the same quarter in 2007.

IP chief executive John Faraci said the group had a "solid quarter", but higher than expected input costs continued to have a negative impact on profit.

Group revenue to 30 June rose by 10% to $5.8bn, with sales growth in industrial and consumer packaging, distribution and printing papers.

In industrial packaging, operating profit dipped by $10m to $87m, largely because of higher input costs and more downtime for maintenance.

Both US and European box volumes fell owing to weaker economic conditions.

Profit in the consumer packaging division slid to $13m owing to restructuring in Canada, but prices and a "favourable" operating performance offset higher input costs and planned maintenance shutdowns.

Faraci said IP would complete the acquisition of Weyerhaeuser's containerboard, packaging and recycling business early next month.

"This will give us additional opportunities to reduce costs in our North American packaging business."

The $6m acquisition was cleared by the US Department for Justice in May.

IP currently employs more than 50,000 people in North America, Latin America, Russia, Asia and North Africa.