Steve Croskrey: Yeah. Unfortunately, we can’t talk too much about the specifics of those programs because of confidentiality. But I can tell you that both teams are very excited and it’s a great opportunity for us to get close to a major chemical company like that, who could potentially be a tremendous partner in the future.
Thomas Boyes: Got it. I appreciate it. Thanks again.
Operator: Your next question comes from Charles Neivert with Piper Sandler. Please go ahead.
Charles Neivert: Good afternoon guys. A quick thing on the ramp-up of production for the cutlery, when do you anticipate having to start building some inventory or anything like that for delivery of that product. So if it’s going to go off in third quarter, start ramping in third quarter of next year, when do you guys have to start ramping up production to get — to set up for that and delivery?
Steve Croskrey: Yeah. We’ll — Charlie, we’ll start building inventory probably in early Q2, anticipating at this point that we expect some orders in Q2 at this point.
Charles Neivert: Got it. Okay. And then — so you said it will take round numbers. It sounds like you said about a year to go from zero to full bore, the $20 million you were talking about. Is that sort of even? Or is that a slow ramp building speed? How does it look to go out? How are they distributing the product? I mean when should we expect the full chunk of it?
Steve Croskrey: Yeah. I can tell you what we know now is our expectation would be that by the end of next year, we will be at a run rate above 5 million pounds and then it will kind of close quickly from there to sometime like middle of early to middle of Q2 of ’24 to be at full run rate — ’25 to be at full run rate.
Charles Neivert: Right. And then last question for now. Just — is there a length for this contract? Is it — does it have an end to it? Is it five years, three years? Is there anything on that? Or is it just sort of we’ll play it by year and see how it goes from there?
Steve Croskrey: Yeah, it will just be ongoing business unless the customer decides to move in another direction. But one of the beauties of this segment is it is so difficult to ever change out a material like we’ve done that — or that we’re doing, that there’s just not a lot of motivation on anybody’s part to go through the process to change to something else than again. And these companies have other priorities and things they would focus on before they would do that. So unless somehow we were just to fall in our face, that’s certainly not something we would expect to have happened.
Charles Neivert: Is there any possibility, again, is — the deal for this $20 million, is that sort of the end of that particular thing? Or can that even grow from that point, assuming all goes well specific to that deal.
Steve Croskrey: Well, obviously, it will grow with the customer. But this is only for North America. So there are other opportunities with — in other parts of the world, but also with other applications in the QSR space.
Charles Neivert: Got it. Okay, thanks very much.
Steve Croskrey: All right. Thanks, Charlie.
Operator: [Operator Instructions] Your next question comes from Laurence Alexander with Jefferies. Please go ahead.
Kevin Estok: Hi. This is actually Kevin Estok on for Laurence. So my first question, I just wanted to touch back on Nodax-based resin for single-use coffee pods. So you obviously touched on the Portuguese company. I guess I was just wondering if there are any other customers maybe with initial trials. And I just want to get some update there. And then maybe in the same vein, I guess, any other regulatory updates in markets that you operate that could provide some sort of tailwind for the next several years?
Steve Croskrey: Kevin, I’ll answer the first part of the question and I’ll ask you to repeat that second part. It blurted out a little bit on me. But as far as the coffee pods, go, we are working with all of the major coffee pod producers or companies in Europe. Because of the expected legislation there, they’re hot to solve for this. So that’s why this is a very important announcement for us as it’s just going to accelerate adoption in Europe. And could you go ahead and repeat the second part of your question, Kevin?
Kevin Estok: Sure. Yeah. I was just wondering if there were any other regulatory updates that were, sort of, in the pipeline that you expect could provide a tailwind in the near medium term in the markets that you operate?
Steve Croskrey: Off the top of my head, Kevin, I can’t think of anything in particular that we have not discussed in the past. But if I come up with something, we’ll get back to you on that.
Kevin Estok: Okay. Great. Thanks. And I’m not sure if this has been brought up yet, but any progress on what you’ve seen in the aqueous coatings for cups?
Steve Croskrey: Yes. It’s going very well. We are expecting to have cups in stores for trials by Q1. There’s actually a push to see if that can be done sooner, but I think that Q1 is a good expectation for trials.
Kevin Estok: Okay. Great. Thank you very much.
Steve Croskrey: All right. Thanks, Kev.
