Question-and-Answer Session
Operator
(Operator Instructions). Our first question does come from Claudia Hueston – JP Morgan.
Claudia Hueston – JP Morgan
Just a couple of questions. One, just looking at the Southern Container acquisition, which is nicely accretive in the quarter, as I look at the $0.42 in the December quarter and compare it to the $0.29 of accretion items that you had in the prior quarter, now was most of that due to lower OCC or are there other things going on as we think about that business?
James Rubright
Primarily OCC pricing.
Claudia Hueston – JP Morgan
Okay, and do you have much of an outlook for OCC as we think about it through 2009?
James Rubright
It’s very weak now but we’re seeing some strengthening on the ports, but I think it’s primarily going to be a function of demand in China and that in turn may be a function of the US demand for imported products. So I don’t see it strengthening terrifically in the short term, but as you move out beyond three to six months it gets very hard to see.
Claudia Hueston – JP Morgan
Okay, and then if you could just maybe talk a little bit about the bleached board business as well? I was curious there where things are from a price cost perspective. You didn’t really comment much on wood costs and if you could provide just any color on what you’re seeing on the cost side there and then also on the pricing side as well.
James Rubright
Yes, I think costs for virgin manufactures of all grades are not seeing what we’re seeing on the recycled side. Our fiber costs into our bleached board mill were up significantly in our fourth quarter over the third quarter. I’m not confident that there aren’t some just sort of inventory accounting issues moving through there and part of the reason is that in this season the wood comes in wetter and there for your yield is less, so its very hard to compare the actual price per ton based on what you’re paying at the gate.
We haven’t seen gate wood prices increase in the December quarter over the September quarter, and in fact we think we’re going to see them come down, although, as I mentioned yields are down. So you’re seeing no significant price relief in hardwood, and in our markets, in softwoods although they may soften a little bit.
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