If you really take a step back from that and think about CUK, in terms of what’s going on there, over the last couple of years, we’re buying globally some additional paperboard in different geographies to run our business and service our customers. Because of some of the efficiencies we see and some of the demand adjustments that have taken place, we can now integrate all those tons into our own operation and export to more tons to Europe, as well as to Australia and New Zealand. And so, that really helps us on the CUK side. And on CRB, with our K3 machine now being dumped down, and it didn’t produce actually in the third quarter, but we did have a very significant annual outage in Kalamazoo on both our paper machines, ranging from seven days to nine days.
If you factor that seven days to nine days out, our 90% was actually in the mid-90s. And we’re running wide open on our CRB system, the mills we have, Kalamazoo, Middletown and East Angus, to service our business in Q4. And we expect that to be the case as we go into 2021 or 2024 as well. Cup stock, as we talked about with things like Cup of Noodles and our Chick-fil-A, and our overall food service business, which grew in the quarter organically from a volume standpoint, that’s a very solid business, highly integrated, over 90%. So, our challenge is on the coded. the SBS has been well chronicled. But in our case, I gave the math for George, 400,000 tons of cup, 800,000 tons of coded, of that high level numbers, we need about 300,000 of that to run our business.
So, the open market portion of it for graphics, 500,000 tons. So, it’s about 10% of our overall volume. That’s it. And as I’ve stated earlier, we’re trying to find ways to continue to grow our cup business. And we’re going to meet that capacity to ultimately serve as customers as these transitions out of foam and plastic continue to occur on the fiber side. So, that’s how I think you should think about the overall demand profile, which usually is tied to some level of pricing.
Arun Viswanathan: Great. Thanks for that — all that detail.
Michael Doss: You bet.
Operator: Thank you. Our next question comes from the line of Matt Roberts of Raymond James. Your line is now open. Please go ahead.
MattRoberts: Hey. good morning, everybody. My question, in regard to permanently shutting the K3 machine in a quarter, while that seems consistent with the initial plan you laid out in 2019, can you discuss how the timing as that played out versus your initial expectations? And what are some of the assumptions or scenarios you’re considering on the timing of closing East Angus and Middletown ahead of Waco?
Michael Doss: Yes. thanks, Matt. and appreciate the question, I mean, from our standpoint, our plan was always to shut down our K3 facility. The question was, when could we do so and take care of our customers? And so with the ramp up K2 and exceeding our expectations in terms of productivity and quality, we were able to do that on June 30th. So that timing was good. And as I just mentioned, we need our remaining mills and assets to run well to take care of the business that we have. And so, we do not plan on shutting down any of those mills prior to our Waco facility up and running just simply, because we’re going to need the tons to service our business on the CRB side.
Stephen Scherger: Yes, Matt. just to expand on that, if you kind of step back and we shared it on one of the slides, I mean, we’ve really played this out since 2019, as described. How we got there is a little different, of course, but the 550,000 tons in, 480,000 tons out, we’ve grown at a 2% CAGR over the last couple of years. We need those tons and we’ve got demand for our CRB. And so as Mike mentioned, we’ll continue to run the CRB platform, very full, taking of course, our planned typical maintenance outages were appropriate. but there’s a real strong outcome there relative to our original commitments and just repeating something like I mentioned, same applies with CUK, because of global demand for fiber-based solutions.
MattRoberts: Right, that makes sense. Thank you, both Mike and Steve. If I could follow on to that, thinking about maybe longer-term supply here, a competitor announced, seems like they delaying an FBB conversion, citing market softness. How has that action changed your longer-term industry supply estimate for 2025 and beyond if so? thank you all for taking the questions.
MichaelDoss: I think on the margin, they’re seeing exactly what I just got done describing. Where the FBB was going to compete is on the coded SBS side, which is the weakest of all the grades. So that probably caused them to take some pause. In our case, we’re actually shifting out of coded SBS as we can and growing our cup stock business. We’re going to have the lowest cost platform for CRB. In the Western Hemisphere, our CUK is incredibly competitive and highly-integrated business, over 95% integrated. So, we’re just running a different race in terms of how we’re putting it together. And that isn’t where we’re going to spend our capital dollars or place our emphasis. We’re a packaging company. We want to sell a cup. We want to sell a carton. And we’ll make the grades of paper, where we can actually earn a good return for our investors. And that’s how you’ll see us allocate our capital.
Stephen Scherger: Yes. and Matt, just to add to Mike’s point, if you kind of then step back and assume that there’s a long-term delay on the project that you were referencing from a capacity perspective, there’s very limited capacity that is underway coming into the market. There’s one conversion happening with the competitor up in Maine that has some incremental capacity. Obviously, we will bring on a little bit of incremental capacity to support our growth. And you’ve actually had some capacity reductions that are playing themselves out in SBS. And they take some time to roll through the market. I mean, the Canton mill that was closed here is now fully down, and I’m sure inventory levels are being managed through. So, actual capacity across all three substrates, very modest additions, if you look out over the next three to five years, knowing the timelines for any other decisions that someone may or may not make over time.
MattRoberts: Very helpful. Thank you, again.
Michael Doss: You bet, Matt.
Operator: Thank you. Our next question comes from the line of Mark Weintraub of Seaport Research Partners. Your line is now open. Please go ahead.
Mark Weintraub: Thank you. There had been quite a bit of static when you were answering Ghansham’s questions, and I apologize, I didn’t get everything. So, I just wanted to quickly review some of the framework on bridging ’23 to ’24. I think you mentioned Bell, including synergies, was about 30 million positive EBITDA, and then 100 basis points to 200 basis points, being your kind of baseline. those I did hear. And I thought I lost; I didn’t hear too much on the productivity versus labor. Historically, that used to be a bit of a wash. Did you give specifics on sort of netting those two out for next year?
