Timothy Donahue: Yes. So the first one in the Middle East, we’ve seen no impact. We don’t have any operations in Palestine or Israel. I’m not aware of us shipping any cans in the Palestine. I don’t even know if there’s a filler in Palestine to be honest. Israel, there are fillers. From time to time, we import cans in Israel, but it’s a small amount. Our footprint in the Middle East is Saudi, Tunisia, North Africa, Saudi, the Emirates, in Dubai and in Jordan. So Jordan, a little closer to that region. But to date, Jordan has been insulated from the skirmish between Israel and Palestine, so no impact there. As it relates to Ozempic and Wegovy and these other drugs, I’m aware of the comment that the major large retailer made. I would have liked to add a little more color on that before every hedge fund decided to jump off the boat at the same time.
When they say the clientele they have is — who’s pulling those drugs at the Walmart Pharmacy is buying less food, I don’t think they are buying less beer or soft drinks. They may be buying less macaroni and cheese, frozen pizza, and other fatty type items that, from what I understand, the body doesn’t want when you take these drugs. You still need some level of a treat. And we’ve seen no impact. And I think if you were to talk to our large multinational and even regional fillers of beverage products in the United States, they are going to tell you the same thing. No impact whatsoever. Remarkable to me that very low take-up rate at this point, projected — even if you want to project out to what some take-up rate might be in the future and some miraculous calorie reduction you think Americans are going to experience if they can afford the drug, that goes out 10 years or 11 years, you want to discount that back and try to ascribe to packaging and other companies.
It’s just remarkable that if it’s had the move that we think it’s had, it’s remarkable to me that somebody thought they can measure that. I don’t see this as being an impact to our business or our customers’ businesses for the foreseeable future. And that doesn’t deal with the side effects that more and more starting to be reported. So I’ll leave it at that.
Gabe Hajde: Thank you.
Timothy Donahue: Thank you.
Operator: Thank you. Our next question is from Jeff Zekauskas from J.P. Morgan. Your line is open.
Jeff Zekauskas: There we go. Your capex, you think will go down to $500 million next year. Is that a maintenance level or is there a growth component? That is — what’s the growth component in the $500 million, if there is one?
Timothy Donahue: Yes. So, I would think about $250 million to $300 million as maintenance and the balance is minor growth and/or product replacement. And so that’s always — product replacement — is it growth or maintenance? If you don’t do it, you have negative growth. So — and like product maintenance, let’s say, we go from standard cans to slim cans, etc., things like that. So think about $300 million and $200 million?
Jeff Zekauskas: Great. And I mean, is it easy to forecast when Asia Pacific turns around?
Timothy Donahue: Well, I don’t know, Jeff, you work for the biggest bank in the United States or the most well-capitalized bank in the United States. You’ve got to have people in your bank that are more attuned to Asian economics in any one of those countries than I am. The answer is, I don’t mean to be a smart ass, I apologize. But it’s a region that’s had tremendous growth for a number of industries and specifically the beverage can industry as beer fillings have increased. And for incremental beer fillings, they have jumped past the bottle and going right to the can. So — but again, if you’re — if you’ve been to Asia and you’ve spent any time there, there is a growing Asian middle class, but their disposable income level is certainly less than ours, but a small treat, and they like their beer and they like to gather.
