Question-and-Answer Session
Operator
(Operator Instructions) Your first call comes from [James Sheehan – Deutsche Bank]
[James Sheehan – Deutsche Bank]
On the functional ingredients, can you talk a little bit about the traction you're getting there and do you expect that to continue despite volume weakness?
James O'Brien
The activities that the group is trying to do is focus primarily on placing the volume and they still have strength areas where they continue to get price. But the focus is primarily on filling the plants out and getting the operations to run at the most efficient rate.
[James Sheehan – Deutsche Bank]
On Water Technologies, you spoke last quarter about municipal contracts being renewed. Can you comment a little bit about the progress you've made there? Is that in line with what you had expected and how does that impact your pricing and margins in 2009?
James O'Brien
The time line of getting new contracts, there is a significant number that are coming due through the December quarter in January and February. Obviously with the current economic conditions, the negotiations are different than we would have otherwise expected, so the intention is to continue to get as much price to cover cost but the activities being negotiated with these customers is what is, what is the raw material base that we're basing our discussions off of, and that's still somewhat unclear.
So these negotiations are not as easy as one would expect in the previous environment, but we fully intend to get a sufficient recovery of margin to cover our service and the raw material costs. But those negotiations are ongoing.
[James Sheehan – Deutsche Bank]
With respect to sales of non strategic assets, could you elaborate a little bit about what types of businesses you're referring to and is that expected to be wrapped up in 2009 or is that more of a longer term ambition?
James O'Brien
As we look at this concept of this idea, it's around reducing our debt, so if we can find a time frame where we can get a significant value for the assets we have for sale, we would do a transaction, but we have no intention of just giving these businesses away to gain cash. So our anticipation is, this may continue on through '09 and will be dependent upon the environment that we continue to discuss these issues with potential buyers and I don't anticipate anything near term.
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