John Haudrich: Yes Ghansham, this is John. So on the inventory revaluation, as you know, we have to properly state the inventories on our balance sheet and given the higher level of inflation that we have periodically, we have to do these inventory revaluations. It is adding about $20 million or almost $0.10 in the first quarter of this year relative to if we did not have that adjustment. But keep in mind, that really doesn’t affect the full year, it just kind of flushes through over the course of the year. So it doesn’t contribute meaningfully to our full year outlook for the business. And as we look at the margin expansion initiatives, $100 million, if you look at that, we had a target in 2022 of $50 million, we came in at $70 million.
So we’ve been doing well in this and we feel confident that we can continue to do well through the combination of our margin — our revenue optimization activities which test things like value-based pricing, plant profitability which is a lot of the cost-related elements of the plant, as well as what we call cost transformation which is on the OpEx side as we continue to do various different things. But we did add, as Anders noted in the prepared comments, a more focused activity over in North America. And that is certainly contributing to the ability to get to $100 million, in particular, the price resetting activity that Andres mentioned should give us some initial benefits that will bring early benefits to getting to that number.
Andres Lopez: Yes. And I think it’s important to highlight that the resetting of conditions commercially in North America is a long-term move. So this has been a market under significant pressure over the last few years and we’re working on this structurally. So we’re working on a large turnaround effort to get back to the earnings and margins and returns potential of this very important market. So what we’re doing in the commercial side, from our perspective, is a long-term move.
Operator: Our next question is from George Staphos from Bank of America.
Andres Lopez: George?
John Haudrich: George, are you there?
Operator: We’re not getting any more you from George, so I’ll move on to the next question. Our next question today comes from the line of Anthony Pettinari from Stanton.
Bryan Burgmeier: This is actually Bryan Burgmeier sitting in for Anthony. You’ve been saying capacity in Europe is reduced by about 5% due to the more and elevated costs. Have you seen any capacity come back online with nat gas moving lower? And do you have a view on industry operating rates in Europe in 2023 kind of based on the projects announced by O-I and competitors?
Andres Lopez: So there is a shortage of capacity of 1 million tons, adding up to about 5% of the supply. We haven’t seen the capacity coming back. At some point, it will come back, some of it will come back. But you also got to take into consideration that the Italy and France, as an example and even North Central Europe, are all importers at this point in time. So beyond that 1 million tons, there is a significant volume that is imported every year into those markets. So from our perspective, the backlog in Europe is quite large. Inventories are still to go up. And this situation with capacity in Europe is going to be a long-term issue. The — I think you can see that when several players including O-I are building capacity to be able to keep up with the growth and those circumstances of dislocation of capacity. This is going to take time to be resolved.
