John Sims: Two things on that, George. First of all, we named it Project Horizon because this is a project that talks about the future for Sylvamo. So we knew coming out of the spin that we could operate more efficiently, leaner, more focused and the plan was to get there as soon as we got the spin behind us. And so we did this internally. This is about focusing on our strategy and make sure that we have the organizations and the capabilities we need to execute going forward. So this is from an internal perspective. We did not go to outsized resources for that. And the same is true for our operational side. And some of this has to do with us continuing to ramp up our investments that we’ve been doing and showing in terms of our facilities, both in the maintenance and the cost reduction capital.
But it’s also more of a concerted effort and focused on areas of opportunities we have to improve our operations. We set a short time frame because we want to be able to execute this quickly, and we wanted to be able to show that you ought to be able to see it on the bottom line pretty quickly. Now we talked about $10 million to $15 million in 2024 but this is going to be an exit rate. So you should be seeing it beginning first quarter of 2025.
Jean-Michel Ribiéras: If I may, George, I would just add, just in supply chain, when I was talking about network optimization, we did get some specialist supply chain services to help us, and we’re continuing to have them helping us redesigning our network and thinking about it differently.
George Staphos: Okay. But actually, I just want to make sure I understood. So the $10 million to $15 million, I took it as a net realized with the run rate being after inflation, the $60 million or so. Did I get that incorrectly? And if I got it correctly, does that mean then there’s another $30 million to $40 million benefit that you get in ’25 based on the program?
John Sims: That’s the way. The net benefits in the $15 million after inflation and the $60 million is net of inflation.
George Staphos: Okay. And on the Ops efficiencies, I mean is it just purely you went machine-by-machine, boiler by boiler and just did indexing and yield analysis? Or was there something else related to the program? I’m sure it’s much more, but is that the fundamental that you were employing there?
John Sims: Yes. That’s probably a good way to describe it. It was a bottoms-up work with an extensive, let’s say, extensive feedback or information from everybody working in our facilities.
Jean-Michel Ribiéras: And some of it is due also to our cost investment that John mentioned. We’ve invested in some equipment, in some mills much better online data analytics to get the capacity now to much better understand clients and predicting them and act on them. So some of the cost programs we’ve done with this automation, I won’t call it AI, it’s too much, but I would call it digital progress in the mills. Analytics is helping us also a lot.
John Sims: And George, let me add, these are structural changes. These are not — we’re not trying to push off or avoid — we’re looking at $110 million. These are sustainable changes. So they do not include, for example, increased volume and absorbing unabsorbed fixed costs that we had this year versus because of the lack of order downtime we took because of the inventory correction. So that’s not included in this $110 million.
George Staphos: Interesting, John. One last quick for me and then I’ll turn it back and try to get back in queue. I remember a discussion about LatAm seeing some improvement in volumes with the textbook program, did that materialize? And how is the order book in LatAm going into ’24?
Jean-Michel Ribiéras: Yes, it did materialize mostly. And order book is good. It’s a seasonality also which is always very good in the fourth quarter. So fourth quarter in LatAm is the strongest one, first quarter the weakest one, but that’s just a seasonal demand.
George Staphos: Thank you.
