CTB
#<UNK>, we've got a model internally here that says we have to offset these costs as they start to increase, and I think we're still able to do that.
I think the one caveat I would add to that is, there's a timing issue in some of this with pricing changes out there, particularly the fact that, we're on a LIFO system and as raw materials change, as pricing changes, it takes a while to get it set up in the marketplace, but our intent is to be able to offset these increases through either cost or price.
Well as <UNK> indicated just a few minutes ago, that there's been some relatively disciplined approaches in the marketplace in terms of pricing.
We don't see that changing.
Actually that's been that way for the last few years, and I think that we're expecting it to continue.
Yes, I think in this case, <UNK>.
We've gone out and made commitment to our customers that regardless what happens here, we're going to supply them with product, and I think that was a bigger issue to them and I think we've kind of eased some of those concerns, and we're continuing to be committed to that.
So I don't think there was a whole lot of a pull-up in there, as <UNK> indicated.
Well, I think on the front end, <UNK>, we may have been a little more conservative just not knowing what's happening in the market.
We're building confidence and understanding what the rest of the year could potentially look like, and how we would address any issues that would come up.
Unfortunately we can't predict with this volatility, we can't predict what's going to happen in raw material costs, particularly and your question, there have been a lot of questions about pricing as well.
Those are hard to predict.
But I think our viewpoint we don't see any huge spikes that will take place that we can't manage within our business.
So we're building a little bit more confidence I guess, coming off a little bit more conservative view in the first quarter previously.
And we didn't give specific numbers on the percentage of that <UNK>, but if you go back and look at these numbers, as we're increasing on that premium higher value add segments, it is helping us reduce our exposure on the private label side as well.
I think we have, if you look at our overall manufacturing footprint, <UNK>, I think we're in a pretty good competitive position including our Serbia operation to combat what's going on in Europe with some of the imports.
So we feel pretty good about where we're positioned right now, whether there's competing against imports or competes again the traditional competitors
Some of that is built into our guidance on the margin side for the rest the year as well.
Okay.
I think that's fair.
We want to make the point that we're committed to the projects and the investments that we want to make, but what we've done is really adjusted what the more likely timing is.
So we think that $210 million to $240 million is a reasonable estimate for 2015, and then some of that will shift into 2017 and future years.
And that will also I can you can expect that the spend is going to be higher than historical averages, not just comparing it to this year alone, because we're continuing on with the investments back in the business, and we feel pretty good where we are, particularly when you look at the return on invested capital numbers that we're achieving at 18% or 19%.
But we could go as far as saying that the utilization rate for Fate has been pretty high for their facility there.
So they've been doing pretty well, and I think we're pretty excited about what they can do for us as well as an alternative source.
Yes, and <UNK>t what we said is that we expect it to be accretive beginning in 2018, so just confirming <UNK>'s point there.
I think the first thing we're going to do is take a look at the market, our sense is there could be price increases that take place here to offset some of that.
Secondly, we've said that we're going to be making sure our customers have product available out of the current sourcing that we have.
And thirdly, we're continuing to look through the region for alternative sourcing that still is something that we aspire to be able to have.
That's outside of China.
So we're continuing that evaluation and investigation.
No timing on it, <UNK>t because that does take time, but in the meantime we plan to continue to make product available for our customers.
All right.
Thanks, <UNK>t.
I just add to that, <UNK>.
Probably safe to say that we are tight on the high value add, but what we've been able to do is with the private label business being down, it's freed up some capacity that we could use for other products, so it's helped us in that situation.
And our Cooper brand overall, our Cooper brands or our house brands have been growing very well.
Hi, <UNK>.
Not only that, <UNK>, keep in mind, we were converts and transforming into these new presses last year to be able to produce more of the high value add, which gives us also flexibility producing other products on there, including private label.
So it's an easier transition now that we've gone through a bulk of the transformation within the factories.
It's a little bit easier for us now than it was before.
Thanks <UNK>.
I would like to thank everybody for being on the call today.
We feel we had a very strong first quarter here in 2016.
We have got confidence as we go into the rest of the year on what we can deliver.
I think this is just an outstanding execution by our people in the operation against our strategic plan.
And we do appreciate your interest in Cooper.
With that, Operator, I think we ought to close this out.
One last reminder.
For follow-up questions, please feel free to call <UNK> <UNK>, our Director of Investor Relations here, to get further detail and answers to some of your question, if you have them.
Okay.
Thanks.
