Most of the other activities are really SG&A related, so they don’t specifically involve the production of a product, the movement or the transition of one product from another. That was the most complicated and problematic of our previous restructuring is trying to requalify products in other plants. It’s a decidedly complex and difficult thing. There’s a lot less of that. In fact, I would almost say very little of that associated with this restructuring versus say some of the previous activities that we had. How do we assess the site who makes money, who doesn’t make as much money? It’s pretty much how you’d evaluate any stock or any other investment portfolio. And so, it is in fact a portfolio optimization program. From that sense, these two facilities were the two lowest, probably the two lowest returning facilities in the company.
And so, I think we’ve addressed that. We made an effort, but there is such thing as a sunk cost fallacy and we’re not going to fall for it. In terms of the split, it’s probably about 50-50 Colors, Flavor. I don’t see if you want to get more details on the split in terms of the savings. No, it is about 50-50, maybe a little bit more by the end with Flavors and some of the activities and Flavors will take a little longer. But at the end of the program it’ll be about 50-50 Flavors and Colors.
Nicola Tang: Can I ask a question about pricing? I think in the opening remarks you mentioned for 2024, you expect low single-digit pricing. Are you implementing new pricing as of today, or is this carryover from previous price initiatives? And then I suppose tied onto that, could you talk a little bit about your expectations for input cost this year? Thanks.
Paul Manning : Yes, so that’s right. So low single digit is what we would expect the impact to be. If you were to add up all the pricing and divide it by the total revenue of the company, it would be in that low single-digit range. And that’s principally pricing that was put into effect January 1st. I would say if there was carryover, it was fairly modest. We are more than likely back into a world where we negotiate pricing annually. Traditionally in this ingredient space, it would be kind of a January 1st anniversary date for the majority of your customers, but there may be others who have an April 1st or a July 1st, but in general, think January 1st. And so, this was, I think we’re back to that more traditional, we negotiate once per year with an effective date of January 1st.
And so, that low single digit is sort of the culmination of that fourth quarter activity with a January 1st effective date. With respect to input costs, as I mentioned, many have moderated, some of them linger, but I think by and large, the low single digits gets us to where we need to be with respect to recovering, any of the inflation on those input costs. But on the negative side, right, there’s still elevated energy costs in parts of the world. Labor is still an elevated dimension of input costs. We do have agricultural products, we talked about that on the last call. You grow those in a previous year where fertilizers were expensive and water was expensive and land was expensive and there was a lot of run up to that. And now we’re in the world of selling those products that had the elevated previously elevated costs.
And so, we have a little bit of that going on from the agricultural side of the business, but I think by and large, the market’s moving in the right direction with respect to input costs.
Nicola Tang: Thanks. And then maybe a final one on the Asian business. You mentioned that there’s been quite a lot of volatility linked to kind of the order volatility of the multinational customer base. With that in mind, what gives you confidence in the mid-single-digit growth outlook for Asia in 2024?
Paul Manning : The new win rate that they have, their execution of pricing increases and very, very clear communications with our customer as to what they see in the market and when they believe their order patterns would resume, which is to say this year. So, I think those three factors come together and I think, again, we have a little bit of a choppy Q1 owing to that destocking, but not as a result of a poor win rate or poor pricing or out of control inflation. Those factors, the ones again, that we can control, I think are well in hand, and it’s just a matter of kind of working through the last of this patchy destocking. But yes, I think that we’re through that in Q1, and then Asia’s back on track. They’ve been on a nice tear for the last say four or five years. So, I think they’re back on track largely after Q1 here.
