Mark Kowlzan: Relative to the box price increase, it’s going to flow through as normal over a 90-day period. We’ll have a little bit of — we’ll have a little bit of lag into the midyear because we do have some contracts that have triggers in the midyear. But the lion’s share of it as usual will roll in over 90-day period. We are not — I’m not going to discuss what we do individually with our customers or anything like that, but we did put the $70 price increase through and on containerboard, as I indicated last time, and that’s been done for quite some time. And that’s basically what we expect now. Relative to an independent or whatever talking about supply-demand or whatever the case might be, I mean, that’s part of the whole frustration of the model that exists right now because as I’ve indicated many times, the open market is incredibly small today.
And when I hear things about 70% of the surveyed — of the survey says X or Y, that’s 70% of what, 1% or something. I don’t know what the — how those percentages work out, and there’s no indication of that. So that’s why we’ve, as I indicated last time some of the need to have some consideration for perhaps some other mechanisms.
Philip Ng: Okay. If I can sneak one more in, your two larger competitors in US are obviously merging with European counterparts. Historically, industry has had mixed track-record being international. But Mark, Tom, team, I’m just curious, how do you kind of see that perhaps changing the competitive landscape and how you may compete and how you proceed with some of your customers going forward?
Mark Kowlzan: I don’t even think about it as a significant change here in the domestic marketplace. This is a — they’re doing it for their own reasons. But again Tom, you want to comment on that?
Tom Hassfurther: I don’t have any comment at all, that relative to our competitors or what they’re attempting to do or trying to do. We know what we need to do in our marketplace and that’s what we go and focus on executing.
Mark Kowlzan: Just keep in mind for better part of 30 years, we concentrated in the lower 48 states and we’ve grown our business significantly over these last few decades here in the United States, and we’ll continue to do so. And we’ve outgrown the rest of the industry by doing that and we’ll continue to do that.
Philip Ng: Okay. Appreciate the color. Thank you.
Mark Kowlzan: Next question.
Operator: Our next question is a follow-up from George Staphos from Bank of America Securities. Please go ahead with your follow-up.
George Staphos: Hi, thanks for taking the follow on. Recognizing that for years, Packaging Corp has hired its team of engineers and has focused on productivity both at the mill level and the box plant level. And you said, Mark, earlier that the projects and the programs will continue to add infinitum. Is there any fade in terms of the net benefit we should expect to Packaging Corp’s P&L over time from these programs? Recognize they’re going to continue, you know, basically, has a lot of lower hanging fruit been consumed or do you think you can continue with — I think you said last quarter, you’re spending $150 million in the box plants this year. Obviously, we’ll get an update in June or July that you can continue to have that same rate of return on these programs and we can continue to see that benefit to the P&L as we’ve been seeing over the last couple of years. Thank you.
Mark Kowlzan: That will never end. If a company does not have the capability that we do, you will not be able to function efficiently going forward. The technology capability that we bring to bear 24 hours a day, seven days a week, we take care of our operational matters in real-time, whether it’s a box plant issue or a mill issue, we don’t depend on vendors to take care of our needs. And so this technology, the engineering group is not only working on capital investments, but they’re working on process efficiency, process improvement on a real-time 24/7 basis, and that will never end. And that’s been one of the benefits that has differentiated PCA for many years now, and we just continue to make it better and better. And the opportunities that the organization, whether you take an individual box plant or a mill and you take the operating group and the technology engineering group together, they see new opportunities continuously.
And then you’re able to identify new technology that can be applied and then we implement that new technology and again, how that rolls into the relationship with growing what our customer needs are.
George Staphos: So, Mark, recognizing you can’t give us a schedule in terms of benefit this quarter, next quarter, next year, three years from now, in your mind’s eye, you see as the efforts will continue, as you just said, the return and the benefit to the P&L should be roughly what we’ve been seeing in the last few years on a going-forward basis at PCA. Would that be right?
Mark Kowlzan: Absolutely. It’s — that’s one of the differentiating factors that will continue to provide the type of benefits that you see at PCA.
George Staphos: Thanks, Mark.
Mark Kowlzan: Thanks, George. Any further questions?
Operator: And we do have an additional question from Ryan Fox from Bloomberg. Please go ahead with your question.
Ryan Fox: Good morning, gentlemen. In the fourth quarter of ’23, we saw that you outperformed the broader industry by a very wide margin. Just curious if you felt like in the first quarter, we’re going to see a similar performance.
Mark Kowlzan: Well, again, we just — we just reported that in our second quarter. Tom had called out the fact that our trend continues into the second quarter. So, Bob, go ahead.
Bob Mundy: No, I mean, Tom, he’s referring to the industry numbers. I think that will come out at the end of the week versus our performance.
Tom Hassfurther: Right. I think we’ll outperform the industry, but I would think that the industry will be up as well.
Ryan Fox: And why do you think you’ve outperformed the industry by such a great margin in the last two quarters?
