Juan Carlos Bueno: Yeah. I think the situation on inventories is quite balanced, probably more to our favor at this time of the year. In terms of producer inventories, when you look at the recently revealed statistics that show 40 days on average for softwood, that’s in good levels, relatively low levels and proper. When you think about customer inventory, we believe that the situation in China is a bit more uncertain. There might be more inventory there. And actually, as they came into the New Year celebration, obviously they were stacking up with inventory prior to that. We saw very big swings of product in the last quarter of the year into China in preparation for the new year. So obviously there’s a lot of expectations on what will happen demand-wise, once that New Year celebration is past us, and how demand will pick up from that point onwards.
What we do see is an important demand uptake in Europe, and this again is coming from a very, very low level. So when we think about our customers that are running their paper machines, they’re running at better than they were running before, but again, coming from very low level. So it’s far from being what the market traditionally is. And that’s why we think there’s a very significant upside. If paper — if the European economy comes back and paper comes back, that would be a very significant factor in what we would believe to be then a much stronger price recovery. Because again, as you all said, the tightness in supply is there. There’s so many mills that have closed down, so much capacity, almost a million tons of capacity of software that has been shut, that there’s not a whole lot of supply out there to cope with an increment in demand.
So it won’t take a whole lot to — for this thing to actually move into a much stronger price schedule for us. But again, we need Europe to wake up strongly and China to come back after the New Year in a better situation.
Kasia Trzaski Kopytek: Okay, thanks for that. And how much — what are your freight costs right now for delivering lumber from Europe to the eastern seaboard per thousand?
Richard Short: That’s a good question, Kasia. It’s probably around $100 a thousand board feet.
Kasia Trzaski Kopytek: $100. Okay. And Richard, that includes the land — over-land transportation as well?
Richard Short: Yes, that would be all in.
Kasia Trzaski Kopytek: Okay, great. One last question. Just switching gears to the mass timber markets, you indicated you expect things to trend favorably going forward over the next year. Any numbers you can put around that, maybe a cadence for how you expect the revenue to grow from here and then any potential EBITDA contributions that you would expect?
Juan Carlos Bueno: Yeah. On mass timber, as I’ve said, and Richard as well, we’re very excited about how this business is progressing. The order book is a great indicator of it. If you think about where our order book was in Q3, we had $54 million of projects locked in, that we would then start executing from that point onwards. In Q4, we not only executed part of those $56 million projects, but we closed with $100 million or almost $100 million of projects in the order book. That gives us a very strong confidence to believe that if we close this year with about $60 plus million in sales, next year it would be at least twice that amount. And when we look at our capacity with the sites that we have, we know that by building up gradually and continuing to run up those mills in a way that we can add more shifts later down as time progresses, this is a business that just with our setup could provide us sales of at least $500 million a few years down the road.
So the assets that we have, provide us for that growth trend for us to work on. Margin-wise, this is meant to be — obviously, this is not a commodity business. This is more of a specialties business. And we look at EBITDA margins around 20%, 25% in the long run. So that’s what we expect of this business going forward.
Kasia Trzaski Kopytek: Okay. And just a quick follow-up. So your order book right now is $100 million and appreciating, it takes a while to actually lock in the order. What is the size of the sales that you’re going after right now that you haven’t locked in yet that you’re pursuing? What potential order book size would that be?
