Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Ghansham Panjambi – Wachovia.
Ghansham Panjambi – Wachovia
In terms of your sense of inventory alignment along the supply chain, meaning your customers, the distributors and at your industry's level, has enough inventory been taken out of the system to align itself with this new reality of a lower demand cycle that we're seeing?
Albert Strouken
I would expect that most probably by the middle of February or so the pipeline effect should have run its course and then we should see most probably a more underlying consumption pattern, at least from the timing aspect. By the middle of February I would lose my patience with the explanation of pipeline. I would be looking for more fundamental issues at that point.
Ghansham Panjambi – Wachovia
So does that suggest then that the extended down time you took in the fourth quarter is going to continue into the first quarter?
Albert Strouken
What we saw of course is that many of our customers extended their own shut downs from the last two to three weeks of last year into the first two weeks and in some cases three weeks of January as well. That of course has an impact also on the volumes that we are selling.
Operator
Your next question comes from Richard Skidmore – Goldman Sachs.
Richard Skidmore – Goldman Sachs
As you talked about the unpredictability in the market place, can you talk about what your flexibility is with regard to your cash and your plans you have to use cash i.e. CapEx to respond to the challenges you might face in 2009?
Albert Strouken
I'll pass it on to Ed for some additional details but overall it is quite obvious that given the financial position that we're in as well as the overall capability of the organization to generate cash, should give us a fairly high confidence level that we can do what we need to do in the coming year.
But as I said, since it's fairly unpredictable what might really happen in the course of the year, it is important for us to also realize that we have a fairly great level of flexibility in making decisions about when we're going to spend the capital and when we put the brakes on.
We have demonstrated in the past where we had driven down capacity expenditures to $270 million, $260 million, $280 million and I think should push come to shove and we really find a very difficult situation, we certainly wouldn't have that flexibility without having to give up position in the market place.
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