Steve Croskrey: Yes. I can’t really offer too much more, Thomas, to that other than it’s for major QSR but these are lids. It’s very similar to lids for cups but these are lids specifically for food containers. So it’s a little different. But every time we do one of these projects, we learn things, and we learn things that we can translate into other areas. So it’s all good.
Thomas Boyes: Got it. And if I could sneak one more in. Just any update on feedstock pricing? What you’re seeing in the market? What you’ve locked in, would be helpful?
Steve Croskrey: Yes. Mike, do you want to take that one?
Mike Hajost: Yes, sure, Thomas. Yes, I think overall, in Q4, our canola prices averaged right around $0.86 a pound and we’re seeing really about the same type of price here in Q1. It’s — as we look forward here through the rest of the year, where we can — projecting those prices to move down to about $0.70 by mid-year. And we’re also expecting to kind of end the year somewhere in the mid-$0.60 range. So we’re seeing a nice decrease in the prices and we’re starting to lock some of those in.
Thomas Boyes: Appreciate it. I’ll hop back in queue. Thanks.
Operator: Thank you. Your next question is from Laurence Alexander from Jefferies. Please ask your question.
Laurence Alexander: Good afternoon. Just want to start with the filtration process for the customers, the 85 that you mentioned, does that materially change the aggregate potential demand pool that you have compared to what you’ve talked about previously? Or can you give some sense of kind of if all of those customers did ramp up, how many plants of potential demand that would represent?
Steve Croskrey: Yes. Laurence, in kind of just big round numbers, I would say that those customers represent at least 3 times more capacity than is available in Kentucky and the greenfield. And obviously, that’s a conservative number without throwing like everything added. That’s just the specific projects we’re working on. And to be clear, that — the 85 doesn’t necessarily represent a change. It’s just — we’ve been looking for a way to try to demonstrate to help investors kind of understand the process better and to kind of see where things are. And so this is something we’re going to — we’ll continue to refine, but we’ll continue to track this in the future and present that kind of information. So any feedback we get on how that looks and how we might do it better would be helpful.
Laurence Alexander: You’ll probably get too many metrics, we all want. Speaking of which, one that would be helpful is in terms of the customers who you won earlier and who you’ve been ramping up with, could you just give us a sense for how much churn you’ve had, kind of the customers that are increasing the volumes they take versus customers who are dropping out because products either didn’t hit their specs or their needs changed?
Steve Croskrey: Sure, Laurence. If you look on slide five and look at the customers on the right, those customers are all growing. And I would say we have never lost a customer once we had them at kind of full run rate. We might — we had maybe one customer in the past and this has been a number of years ago, where they launched — they probably didn’t understand their own specifications. It was a smaller company, and we launched, and then they found out things after the fact that, that didn’t work for them. But other than that, we have not lost a customer. All these customers are happy and growing with us.
Laurence Alexander: Okay. Great. And then just what’s the current market expectation or customer expectation or your messaging to them around when you use a greenfield, do they expect as volumes ramp a significant drop in ASPs? Or we be thinking about kind of flat to modest erosion in mix as you get economies of scale?
Steve Croskrey: Yes, sure. I understand your question. We have talked with some of the larger customers, we’ve kind of shown them some expectations over like a 10-year period of what that can look like as we scale and what’s possible. But we have never specifically offered anybody lower pricing once the greenfield comes online or had any specific discussions like that.
Laurence Alexander: Great. And then just lastly, can you update kind of the market prospects for the Novomer technology, particularly into the aqueous film applications?
Steve Croskrey: Sure. So we are — as you know, we’ve just completed the scale-up of the new pilot plant, and that will allow us enough volume to be able to sample some of these customers that will then be able to create demand by validating the material. We have — are in the middle of negotiations with another major chemical company for a development agreement to support that. And as you know, we’re working with Chevron Phillips on a couple of those projects as well. And we have a kind of, just call it, a verbal agreement at this point with — because we’re waiting on the customer traction now, but we have an agreement with another major oil and gas company for colocation venture. We can’t — I can’t talk to anything on the aqueous side, but on the film side itself, what we’re seeing is, if you remember, Laurence, when we bought that, that one of the things we were adding was, that the barrier properties of that material is much better than other commercial biopolymers, significantly so.
And what we’re seeing now is it’s also better than fossil fuel-based products. So I keep telling people we have a killer app here. When we can get that commercialized and combine it with Nodax, we’re going to be able to create applications that none of the other biopolymer competitors that are in the market today or even the ones that are trying to get into the market would be able to compete with on the snack food side because of the barrier properties.
