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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Andrew Still now joins us here. He's the CEO of

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Speaker 2: International Paper. IP is the ticker. Put it into your

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Speaker 2: Bloomberg terminally joints us here in our Bloomberg Interactive Studios.

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Speaker 2: The fact that you're in our studio makes me believe

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Speaker 2: that you had an investor day we did yesterday.

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Speaker 1: Yeah, we had an investor d yesterday.

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Speaker 2: What was the theme of the investor day today that

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Speaker 2: you had yesterday?

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Speaker 3: Transformation? Okay, it's really about the transformation. I heard in

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Speaker 3: the opening talking about International Paper. Of course it's in

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Speaker 3: our name, and so people think Global Paper. And the

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Speaker 3: reality is is we're a packaging company now, so almost

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Speaker 3: one hundred percent sustainable packaging. With the acquisition of Dia

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Speaker 3: Smith North America and Europe, we're number one in both places,

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Speaker 3: and we're all focused on the customer and their packaging needs.

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Speaker 3: You mentioned Chewy before, great customer for us, and a

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Speaker 3: wonderful opportunity to build their branding to help them be successful.

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Speaker 3: That's what we're all about, is transforming into a packaging company.

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Speaker 4: So something that definitely came up is value over volume.

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Speaker 4: You want to get the most out of what you're

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Speaker 4: doing rather than just the numbers. UPS is doing something

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Speaker 4: very similar and in the short term there's a lot

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Speaker 4: of angst and pain kind of around that before you

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Speaker 4: get to that volume after that value growth. Talk me

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Speaker 4: through the cycle.

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Speaker 3: Yeah, So if you think about we were our own

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Speaker 3: worst enemy. So for years and years and years, we

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Speaker 3: would chase volume at the most inopportune time. And so

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Speaker 3: what we've effectively had to do is go back to

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Speaker 3: the marketplace and say we need to be paid for

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Speaker 3: the value.

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Speaker 1: That we're bringing. And that's what we do. We come

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Speaker 1: into the marketplace.

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Speaker 3: We're trying to help you get your goods to the

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Speaker 3: place you want them to be, whether it's fast moving

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Speaker 3: consumer goods or it's industrial goods.

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Speaker 1: That's what we're trying to help.

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Speaker 3: But we've got to make sure that we're taking care

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Speaker 3: of all of our constituents, and frankly, we weren't, and

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Speaker 3: so we've got to get that value proposition right. I

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Speaker 3: think we've made that switch over the last couple of years.

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Speaker 3: We're seeing that start to play out appropriately and we're

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Speaker 3: getting paid for the value that we bring.

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Speaker 2: You're building a state of the art box plant in Waterloo, Iowa,

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Speaker 2: so talk about onshoreing. That's big time. Ten and sixty

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Speaker 2: million dollars. Talk to us about that investment. What are

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Speaker 2: you trying to do there?

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Speaker 3: So, what a lot of people don't understand about the

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Speaker 3: packaging business, certainly the paper based packaging business is all

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Speaker 3: of the business has done within two hundred miles two

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Speaker 3: hundred mile radius of a plant. And because you can't

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Speaker 3: air as expensive as ship and so you've got to

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Speaker 3: be close.

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Speaker 1: So we want to be close to our best customers.

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Speaker 1: That's protein Alley. So that area there's protein protein Alley.

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Speaker 1: Protein Alley.

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Speaker 3: Really think of the beef and the chicken before and

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Speaker 3: so if you think about kind of kind of where

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Speaker 3: protein happens in the United States from if you think

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Speaker 3: of the South all the way through the Midwest through there.

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Speaker 3: We want to be close to our customers. We have

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Speaker 3: a great customer relationships. We need a modern facility. We're

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Speaker 3: going to have, I think it's going to be the

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Speaker 3: largest facility in the US that does paper based packaging.

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Speaker 3: And we want to make sure because we're shipping in

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Speaker 3: from other parts of the country now, service those customers

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Speaker 3: very ineffective, very inefficient.

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Speaker 1: We want to be local. We want to be close.

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Speaker 3: We want to drive customer service and innovation as close

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Speaker 3: to the customers we can.

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Speaker 4: International is in your name, So what how are you

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Speaker 4: affected by potential tariffs? And everyone sort of every country

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Speaker 4: shift to nationalism and way that is energy nationalism, goods nationalism,

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Speaker 4: supply to nationalism. Where do you play and that has

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Speaker 4: affect you?

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Speaker 1: Yeah, so we are.

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Speaker 3: We're definitely international company, principally North America and Europe.

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Speaker 1: We're about two thirds North America and a third Europe.

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Speaker 3: We don't ship actually a lot across borders, believe it

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Speaker 3: or not, so that doesn't happen. So we're not being

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Speaker 3: impacted directly by tariffs with crossboarder trade, but we're impacted

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Speaker 3: by the economy, and so as tariffs impact the economy,

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Speaker 3: that will have an impact of us.

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Speaker 1: So we're watching what's going on and we see it

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Speaker 1: in our numbers. We've seen the volatility in.

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Speaker 3: The last month or so, so we're keeping a close

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Speaker 3: eye on that.

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Speaker 1: But that's really how it impacts us.

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Speaker 2: What are your customers saying about their outlook for the economy.

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Speaker 2: I would think that you would have a finger on

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Speaker 2: the pulse of that.

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Speaker 1: Yeah, I think we do have a pretty good pulse.

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Speaker 1: I think there's uncertainty, if we're fair about that.

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Speaker 3: The last month or two or so, there's been some

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Speaker 3: real uncertainty, and I think, well, nothing's really happened yet.

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Speaker 3: It's caused people to trench a little bit and ask, hey,

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Speaker 3: do I want to make that investment right now?

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Speaker 1: Can I hold off on spending money right now? And

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Speaker 1: let's see.

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Speaker 3: Look, my belief is these things wash out over time,

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Speaker 3: and we make investments for decades. We don't make investments

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Speaker 3: for quarters or even years. And so we're thinking about

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Speaker 3: investments for the long.

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Speaker 4: Term in terms of say, hiring labor, how you're managing

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Speaker 4: the business. Is it a retrenchman time, is it expansion?

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Speaker 4: How would you define it for you guys?

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Speaker 3: Actually, interestingly, it's a little bit of both, right, And

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Speaker 3: what I mean by that you have yeah, you can actually,

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Speaker 3: so when you think about that, you have certain parts

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Speaker 3: of your business that aren't as strong or aren't as healthy,

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Speaker 3: and you have other parts that are very healthy. So,

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Speaker 3: as an example, protein aaley very healthy for us. Let's

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Speaker 3: make investments in waterly on it. Let's move the the

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Speaker 3: let's move people, and let's live investment there things that

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Speaker 3: are weaker, things that are struggling or markets you're not

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Speaker 3: as strong in you have to retrench.

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Speaker 1: So you have to do blakas are.

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Speaker 3: Those well you've got you've got softness in parts of

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Speaker 3: the economy kind of broad base. You've got to be

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Speaker 3: concerned about things that are going to shrink over time

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Speaker 3: and things things like e commerce that are strong. Things

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Speaker 3: like protein and fresh vegetables, those are strong. You want

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Speaker 3: to move towards those things. And so you know, we

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Speaker 3: want to move our investment towards the parts of the

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Speaker 3: economy that we think are going to expand over time,

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Speaker 3: location and industry and really you know, grow on those strengths.

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Speaker 2: So to the extent, if I think about your company,

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Speaker 2: I think about a GDP top line growth story, is

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Speaker 2: there anything different than that?

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Speaker 1: I mean, that's it?

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Speaker 2: And is it just so? Is your business really about

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Speaker 2: managing the cost of managing margin?

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Speaker 1: No, it's not.

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Speaker 3: Okay, Yes, you always have to manage your cost, right,

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Speaker 3: but the key thing is you want to align yourself

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Speaker 3: with where growth is. Okay, I think that's the biggest thing.

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Speaker 3: Bottom line though, is we're going to generally follow the economy.

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Speaker 3: So yesterday, in our in our investor day, we talked

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Speaker 3: about a volume growth that's kind of one to two

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Speaker 3: percent that follows, you know, underlying volume growth and pricing

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Speaker 3: power over time. It's also about one to two percent,

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Speaker 3: so we think we're three to four percent grower over

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Speaker 3: time the core market. And then that question is can

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Speaker 3: you align with better growing industries and can you win markets? Here?

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Speaker 2: Andrew, thank you some for joiners. Really appreciate you taking

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Speaker 2: a few minutes of your time here today. Andrew Siblinaier,

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Speaker 2: he's the CEO of International Paper No surprise, the ticker

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Speaker 2: symbols ip loggity to Bloomberg Terminal. He joins us here

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Speaker 2: in our Bloomberg Interactive Broker studio. They had the investor

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Speaker 2: Day yesterday. The stocks up forty five percent over the

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Speaker 2: trailing twelve months, so it's had some pretty solid performance