Rock-Tenn F4Q07 (Qtr End 9/30/07) Earnings Call Transcript

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2007-11-08 09:10:53.0

Tags: Rock-Tenn Co.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question comes from Mark Connelly of Credit Suisse.

Mark Connelly - Credit Suisse

(inaudible).

Operator

Excuse me sir, we can barely hear you.

Steven Voorhees

Operator we cannot hear the question.

Operator

Our next question comes from Mr. Bill Hoffman of UBS.

Bill Hoffman - UBS

Yes, good morning. Just a couple of questions just on sort of business conditions, you mentioned some of the pricing pass-through here, that you are seeing in the fiscal fourth quarter. Does it feel like business conditions are tight enough where you can gather further price momentum going into 2008? Obviously given the seasonality, it makes it a little more difficult to know that, but we're just trying to get a sense on how tight market conditions feel in the CRB business?

Steven Voorhees

Right Bill, I cannot comment on the prospect for further price increases for legal reasons, and so I will not do so. But the conditions in our paperboard mills, with the exception of the uncoated mills, which as you know, the small exposure that we have are very strong. Our CRB mill backlogs by historical standards continue to be very strong, and bleach board have actually increased over the last, I'd say 6 to 8 weeks. So, the underlying demand for paperboard and the apparent supply-demand balance in North America for the grades that we manufacture appears to be very strong.

Bill Hoffman - UBS

Thanks. And just with regards to the URB side of the equation, it's obviously a small piece, and you are seeing some softness there. Strategically what are you doing with regards to that market, are you straddling that capacity or production at this point?

James Rubright

No, about half of our capacity in uncoated recycled board goes to our own converting operations and businesses that are stable-to-improving. The largest single exposure that we have in uncoated recycled board is into our interior packing joint venture with Sonoco.

Bill Hoffman - UBS

Right.

James Rubright

The area that the end market for that product is the largest end markets or beverage markets for wine and beer, and those markets are healthy and we continue to grow share in those markets. We also have a dedicated mill that is a -- essentially it’s a small mill, it’s a book cover mill, which has continued. The markets continue to be fine and our laminated paperboard business continues to be okay.

 

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