Question-and-Answer Session
Operator
(Operator Instructions) And your first question is from the line of Chris Manuel with Keybanc.
Christopher Manuel – KeyBanc Capital Markets
Good morning.
Albert P. L. Stroucken
Morning Chris.
Christopher Manuel – KeyBanc Capital Markets
Congratulations on a strong quarter, couple questions for you. First let me start with some thoughts as we began to look to 2010 you’ve made some incredible progress here through the year and the biggest differential or one of the biggest differentials is as you look at cost price and how favorable that’s been this year. With your first pass at looking at 2010, are you anticipating that you will be able to keep that neutral or would you anticipate that could be a potential headwind or even more favorable for you next year?
Albert P. L. Stroucken
I think overall our strategy has been very careful over the last three-years and that is margin repair, margin expansion. And we are driving a lot of activities in the organization related to productivity and so on, that will even in an environment where inflation is no longer the driver for prices allow us to get margin expansion. I think what we of course will not see is the rapid escalation that we saw over the last three-years which included quite a lot of repair need as well and backlog. But I am very confident that with the steps that we are taking with our footprint alignments and so on and just assuming a normal economic recovery, we will see quite a significant benefit from these cost saving steps that we have taken over the last couple of years.
Christopher Manuel – KeyBanc Capital Markets
Okay. And then along those lines, my second question was the volume trajectory has seem to improve very nicely sequentially quarter-to-quarter-to-quarter when looking at on a year-over-year basis. At some point it would appears though with, with some of these regions I think you mentioned Asia-Pacific getting to flat, seeing some improvement in South America as well. That at some point the whole company, you will turn flat and likely, at some point early next year actually return to positive numbers. Does that kind of mesh with, with what you are thinking is or how are you anticipating the volume trajectory plays out the next couple of quarters with the substantial improvement you are seeing sequentially?
Albert P. L. Stroucken
Chris, I think what we are seeing is still a variation between what logic would indicate and what people are willing to commit to and what people are willing to project. At this point in time what we are seeing in our customer base is a very high reluctance to make any predictions for an increased volume requirement for the coming periods, whether in short-term or long-term. Nobody really at this point in time is willing to be optimistic. It’s almost seen, a little bit as being optimistic is not very intelligent at this point in time. But I think if you look at the basic underlying trends that we already have seen this year and that we would typically see in an economic recovery, it’s quite obvious that we will somewhere cross these differentials to the positive, somewhere in the first half of next year. Now I would personally think that most probably because of the heavy impact that the pipeline cleanout had in the first quarter and the second quarter that most probably is likelier to happen in the first quarter than in the second quarter.
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