Thomas Palmer: I wanted to ask a little more on the demand poll you’re seeing from renewable diesel. I mean, it really has been a kind of key driver over the last couple of years in terms of crush and refined oil. The industry obviously responding on the crush side with added capacity, in part to support this industry, I guess what’s the visibility in terms of that demand pull at this point, in terms of absorbing some of this increased supply that’s coming from the added crush capacity, are we still a little bit in waiting mode? At different points, you’ve kind of noted that maybe curves aren’t showing it, but you are at least in touch with customers who are showing optionality for that increased demand pull on a forward basis.
Gregory Heckman: Yes, we see it continue to grow. I think there’s going to be another 1.4 billion gallons of RD capacity come online in the first half of ’24. I think some of the complexity, right, it isn’t just a veg oil game as they grow their demand. The market sent some signals when the pipelines got tight, and so we saw UCO imports and so as we balance some of that supply and demand understanding, did we soak up some surpluses and what will be the ongoing rate of some of these imported UCOs and other kind of low CI feedstocks as the market kind of works to balance itself out as that demand comes on. So it’s a bit of, no doubt a complicated picture on that. And then, of course, you’ve got policy changing, right, as we move from a blender’s credit to a producer’s credit in ’25 in the end markets, adjust to that.
And then, and of course, you’ve got even things like the card policy where they’ve signaled they’ve got the ability to make changes if the feedstock is available. And now the market is sending signs that the feedstock is available. So we think this will be pretty dynamic. But net-net, we have increased demand that continues to grow globally, and then we’ll see what other policy things happen generally kind of around the world and specifically around things like SAF. The other is how well their new RD operations come up to speed on catalysts and whatnot. Do they need the vegetable oil to be the dilution for some of these other low CI feedstocks and some of these imported feedstocks? So it also depends kind of how they run. And then also the shift that we’ve said all along we expect to see at some point as these pretreatment facilities come up and we see some of the refined oil demand move into crude demand.
And so you may see it move from refining margins then into the crush margins. So while we like a complex picture to unwind, this one has really plenty of moving pieces.
Thomas Palmer: Yes, totally. Thank you. Just quickly, on the share repo plans, I think as of the October earnings call, you’d spent the $134 million on repo taking you to about $600 million between the back half of the year. Should we, as we look at this coming year, expect maybe a more balanced cadence because it looks like you kind of stopped, at least for the last couple of months of ’23, but still have clearly meaningful plans as we look at the time period, kind of before Viterra closes. So again, should that be a little more balanced on a repo?
Gregory Heckman: Yes, I think. Well, our expectation is between now and, let’s say mid-year. We’ll have the other 400 but timing on close of Viterra is yet to be determined, but I think we won’t wait around till we have news for that. I think we’ll put it on a pace here to make sure that we’re completed by mid-year.
Thomas Palmer: Okay. Thank you.
Operator: The next question is from Sam Margolin with Wolfe Research.
Sam Margolin: Hi. Good morning. Thanks for taking the question.
Gregory Heckman: Good morning.
Sam Margolin: My question is on refining, because it seems like that’s the segment where the commodity headwinds are probably the most visible. But it sounds like there’s a technology story there for you where you’re either gaining share or maybe potentially getting some pricing power. And I wonder if you could just talk about the attributes of the yields in the new refineries that are adding value and how they accrue to the segment growth and how should we think about that contribution? Thanks.
Gregory Heckman: I think on an overall, it’s just the team has been running the refineries better. We set some records there in Q4 on volume and capacity utilization in our refineries. So we’re just trying to run the system better to meet the demands and then on our India refinery, that is new multi-oil capabilities as well as packaging, and that’s to meet some current demand as well as some growth. We’ll be commissioning that in the first half. That’s for our foods business. And then the Avondale refinery, which we bought here in Louisiana, that’s really helping on the import of some of the tropical and soft oils to serve our customers with multi oil and we were really at capacity there in serving our food customers here in North America.
So that’s freed up capacity and given us some extra capabilities. And we also had some equipment headed for another facility that we’ve already pointed at Avondale. And we’re going to expand that facility already. So we’ll be doing that work during the year. So that’s really about capabilities and flexibility on the food side, which is the other, as John talked about a little farther out. But our Amsterdam facility will be kind of the same thing. That’s a great specialty oils market over there. We’ll have really the most flexibility, we think, in Europe. We’ll have the best carbon footprint and the lowest cost facility when we get that done. But that’s just getting underway, so I’ll be out in ’26 before we have the benefits of that. But also with these new facilities, they’re all improving the carbon footprint versus the facilities that we were running before.
