Question-and-Answer Session
Operator
(Operator instructions). And we'll take our first question from Aaron Lindberg with William Smith & Co.
Aaron Lindberg – William Smith & Co.
Thank you. So the 2.4 million in medical product revenue solely from Silipos products?
Gray Hudkins
Yes.
Aaron Lindberg – William Smith & Co.
Okay. And then, Twincraft was like $7.8 million in the quarter?
Gray Hudkins
Yes.
Aaron Lindberg – William Smith & Co.
Okay. And then, in regard to Twincraft, how big of an impact is lower pricing for raw materials now and going forward going to have on the business? I recall that you had locked in some raw materials pricing earlier in the year. Can you just help us understand that?
Gray Hudkins
Yes, I mean, I'm going to be – alright, I'll kind of give you a rough sense of how it works. We locked in costs during the year so that we had stable cost throughout this year by buying forward at various periods. So there were times that we had to buy in the spot market as rates that were substantially higher than our standard. What we see next year is that we have started to buy forward for roughly the first three months of the year at numbers, which are in ballpark around 15% less than our cost per kilo on average this year. And we have also – we've also gone out for – to initiate RFQs for what it would like in the out month to, but we haven't bought forward yet. And the RFQ costs we get back are substantially below the 15% that we bought for the first quarter. So all things being equal, that would – the math is if you kind of think about that in terms of what I mentioned about material cost this year versus last year as a percentage of sales, that can give you kind of a sense for what the gross margin impact could be. But I wanted to be very cautious about this point, because you are already experiencing and getting some feedback that there are customers who are very focused on their costs just like they – just like we are on ours.
So whether that translate into direct profitability or not will depend on our ability to – it will depend on all the things, which pricing typically depends on including innovation, the strength of our competitors and how able we are to the whole pricing consistent with where it was this year. I mean the cost of palm oil [ph], which is the primary – there is a number of different commodities, but palm oil to give you this one to reference. The cost of palm oil has fallen about 70% and that doesn't translate into 70% decreases in raw material costs for us unfortunately. But it – another use for palm oil is as a biofuel. So it's also subject to going up again as it becomes too cheap because people can use it for fuel purposes.
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