Rayonier Advanced Materials Inc. (NYSE:RYAM) Q4 2017 Earnings Conference Call Transcript
Feb 20, 2018 • 10:00 am ET
Thank You. We will now begin our -- question-and-answer session. (Operator Instructions). Our first question comes from the line of Steve Chercover with D.A. Davidson. Please proceed with your question.
Yeah, I should join a game show. Good morning, everyone. So I don't want to focus too much on acetates since it's now only 25% of the revenues, but I still have a couple. So first, maybe you could just help us. Beyond cigarette tow, what are the other applications for acetate?
So beyond cigarette tow, Steve -- again, good morning -- beyond cigarette tow, main application out there is a protective layering for LCD screens is probably the main other one. There's other applications as well -- cellulose butyl rates and for coatings as well as in some textiles, kind of high-end textiles additionally.
So you kind of answered the question as to why you had the premium. Now the contracts through 2020, they will remain at the current price? There is no negotiations for next two years?
So, look, we said, Steve, our -- those contracts give us a stable position going forward in the next handful of years. And let me just say, look, we feel very positive about the CS business and where we are in the cycle. In fact, I think we got more confidence now than we've had in the past five years. And it's driven -- we talked about it there in the call -- is just, the ethers and our other non-acetate segments are achieving price increases, which is great, and we haven't had for some time. And in some cases, well above inflation. And additionally, these markets are growing at pretty reasonable levels.
And again, in acetate, what we basically did, we just made a decision to reset our prices to be very competitive in what I described in November, which is a very competitive market. I think the difference we have, Steve, in this time around, which is different than in past four years, which is where our competitors continue to move prices down, and we either had to follow or create an increasing gap between us and the market or both. And this year, we actually believe, we reset to the market.
And therefore, that reset is relatively stable. But our competitors were relatively stable out there in the market as we looked at. We were just higher to the market, and we came in with a real competitive price and stayed at a competitive price here we think going forward. But again, just based on the contracts we have, we just feel like we're in a much different place than we have been in the past in our market. And again, we would say we feel like the outlook is far more positive than we had in the past.
Yeah, that's very encouraging. And with respect to the margins, are the margins in ethers and other cellulose specialties similar to what you get in acetate?
Yeah. Yes, I'd say