Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Nelson – State of Wisconsin Investment.
John Nelson – State of Wisconsin Investment Board
I was wondering if you could us some additional information on what kind of drivers spark the use of your particular robotic equipment versus the traditional packaging equipment.
John D. Dulchinos
Really what it comes down to is packaging is done really one of two ways. One is by hand, where you physically have to pick something up, look at it, and place it into some kind of wrapping machine or some kind of carton or some kind of box. And if all of that is very standardized, like an Oreo cookie, then you can use a machine to do that and the machine will slide and push the product, like Oreos, into a roll that will then get split into a wrapping machine.
A lot of products can't be handled that way. They have to actually have to be physically picked up, oriented, and placed and that's really where robots come in. And as the market is moving towards more and more flexibility in packaging, it's moving towards more green packaging, as the number of SKUs expand, there is a tremendous amount of pressure now on food manufacturers to be able to have a lot of flexibility in their packaging.
And to do that, they are kind of forced into the scenario where they either have to do it by hand or the only alternative to that is robots. And that's a real exciting driver right now. And what really had changed the landscape over the last few years is products like Quattro, which are twice as fast as traditional robots. So if you would think of cost justifications, a Quattro robot will deliver twice the packaged goods out of the same amount of factory space as a traditional robot.
And that's been a real driver. We continue to make very good progress on our Quattro robot in penetrating the packaging market and I think that trend is just going to continue as we move forward here.
John Nelson – State of Wisconsin Investment Board
Since so much of various types of production is moving offshore and so much of global growth is either in the south central America or Asian markets, what are you doing to address those opportunities in that part of the world?
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