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steelyeye

05/12/13 11:32 PM

#226491 RE: Florinda #226487

Florinda, at the simplest level I mean that as cost per gallon decreases and sales prices increase or hold steady, the overall efficiency of plant operations can only be characterized as increasing. Another way to say it is: as cost per gallon decreases and sales price per gallon increases or is steady, the result is that margins expand. Margin expansion generally happens when operations are increasingly efficient.

Just as you speculated a few months ago that HTF would increase P2O throughput efficiency by more uniformly melting and densifying the mixed plastic inputs, so too I am speculating that operational efficiencies of plant operations, including moving plastic in and moving fuel out, having a continuous and separate half-kiln petcoke removal system on P3, new loading docks, utilizing HTF at the front end, etc. will progressively influence margins in a positive way.

At Rock-Tenn, there are several additional advantages (like unlimited available feedstock from their MRFs), but building out the necessary infrastructure and obtaining permits always take longer than expected.