Clearwater Paper Corporation (NYSE:CLW) Q4 2022 Earnings Call Transcript

Arsen Kitch: Yes, Adam, it’s an interesting question. So as we look out into this year through 2025, according to RISI, there’s 220,000 tons of announced capacity of that, about 74,000 tons is in unknown location at this stage. So that is a considerably, call it, lower forward capacity curve than we’ve seen — than we’ve seen in the past. So I suspect it’s a function of the industry margin compression that we’ve seen along with higher interest rates. But again, our competitors get to make their own decisions on when to invest in new capacity. We are approaching, starting to approach our practical capacity constraints. So we’re working to optimize our product and customer mix at this stage. But stepping back, I think if you look over the long run, given the buyers in this market, given the large retailers and the disaggregated — the disaggregated supplier base, there’s a mismatch and consolidation is needed to improve cost structure in the long run for our suppliers to be better matched up with retailers from a scale perspective.

So we still think that’s needed. In terms of capacity additions in the next couple of years, it certainly seems like there is a slowdown.

Adam Josephson: Thanks so much, Arsen. Thanks a lot.

Arsen Kitch: Thank you.

Operator: We have no further questions. This will conclude today’s conference call. Thank you for your participation. You may now disconnect.