LPX
#I think what you need to do, <UNK>, is really go back and think about what happened in the third and fourth quarter of 2015.
And what we said ---+ and I know it was $10 million for the whole year.
I think it was $4 million ---+ (multiple speakers).
Okay.
So, <UNK>, we believe it was $6 million in the third quarter and $4 million in the fourth quarter ---+ other way around ---+ $4 million in the fourth quarter and $6 million in the ---+ $4 million in the third quarter and $6 million in the fourth quarter.
So, $10 million for the whole year.
And so I think the best way to think about that is we said it was less than $1 million in the first quarter, and we don't anticipate any negative drive in the remainder of this year.
And so at this point, it just will be fully incorporated into our siding business.
And we would ---+ don't expect it to be any different from any of our other siding mills, albeit the ramp-up will be fully completed by the end of this quarter.
If you just take the market and look at the mix between repair/remodel, new home construction, the retail business, the inherent growth rate is 7% to 8%.
So penetration, we think, is another 5% to 6% on top of that.
So I think you are 13% to 14% overall.
If some of these new products really take off on the marketplace, will be higher than that.
I think it has been rumored for a long time.
I just think that there would be a big uphill climb.
We have a 25-year history of product reliability and warranty information.
We've got a sales force in the field that's now 140 people strong and marketing to support that.
It's a different kind of sale than is commodity OSB.
And then, as you know, we spent $85 million converting Swan into a siding mill.
So there is a little bit Of capital that goes into it.
And I think I mentioned On the first-quarter call, Swan Valley has one of our most experienced mill teams.
You know what.
It wasn't easy for them.
That's even with having that augmented with people from our siding mills to help them with that ramp-up.
Because, unlike OSB, if you have a flaw in the face of the panel, it is downgraded.
You can't continue to ship it.
So it's a tougher standard for an external product that is going to remain to be seen.
It wouldn't surprise me, but we've heard it now for 10 years that we were going to come into the business.
<UNK>, I will comment on that.
They put fuel surcharges in for the rail companies and trucking companies and the airline industry, and none of them have come off.
It doesn't make any sense (multiple speakers).
I know.
But look at the airlines.
You've got a fuel surcharge on your airline ticket every time you buy one.
And that's ---+ they don't come off generally.
What I will say is probably due more to weather than anything else.
We did not have any rail disruptions in the first quarter.
And that is ---+ if you go back to 2013 and 2014, it was terrible.
So we actually had a very good (multiple speakers).
That's exactly right.
And as I mentioned, particularly in our OSB business, we were able ---+ because of that reliability, we were able to change how we treated reloads and how we treated inventory because we could rely on them to get the product to the customer.
And part of the improvement we had in pricing was better logistics.
It is.
Yes.
We actually ended up from where we were in the fourth quarter.
And we are also up from where we were on finished goods in the first quarter of 2015.
We did take them down pretty significantly in the fourth quarter of 2014 ---+ I'm sorry ---+ the fourth quarter of 2015 and intended to bring them up.
And I would say they are ready to serve the customers' demand that we have.
Same as we've been really talking about it for the last couple of quarters.
We don't think there's a lot of inventory in the system right now.
I would say on the fiber side, we saw improvement primarily in OSB, a little bit in siding.
And I don't want to ---+ we did see some improvements in ---+ I think I mentioned this in my comments ---+ in resin pricing and (technical difficulty) relative to the first quarter of 2015.
Certainly not this year.
The majority of it actually is Central Europe.
No, the majority is in Canada, and then probably, what, 10% to 15% is sent to Europe.
It's all in the mind of the buyer, <UNK>.
This is an emotional response.
It's a response with incomplete information.
As information becomes available, then, no, I think buyers will modify their behavior.
But this was an emotional response.
And we get that ---+ for instance, when Martco announced they are going to build a new mill, pricing went down but that mill is not going to be in operation for 2.5 years.
But it really is psychological.
And if a buyer can't get the wood, they have a tendency to raise price.
Typically at this time of year, you are not logging.
So whatever you are going to run through the mills has to be already sitting in the log yard or in a satellite log yard.
So our foresters won't be in the woods until next month at the earliest.
Is that right, Mike.
So they won't be in the woods until next month.
And then if there is fire ---+ a fire danger, they may limit what areas they can operate in.
So we fundamentally have enough wood in our yards to run through the middle of July in both Peace Valley and Dawson Creek.
Great.
Thank you, <UNK>.
Karen, I think that's all the time we have for questions.
So if you could please provide the replay number.
And I would like to thank everybody for participating in our call today.
As always, Mike and Becky are here to answer any follow-up questions you may have.
Thank you, and have a great day.
