Good morning. My name is Jessa and I will be your conference operator today. At this time, I would like to welcome everyone to the Cascade First Quarter 2019 Financial Results Conference Call. All lines are currently in listen-only mode. After the speaker's remarks, there will be a question-and-answer session. I'll now pass the call over to Jennifer Aitken, Director of Investor Relations for Cascade. Ms. Aitken, you may begin your conference.

Thank you, operator. Good morning, everyone and thank you for joining our first quarter 2019 financial results conference call. We will begin with an overview of our quarterly operational and financial results followed by some concluding remarks, after which we will begin the question period. Today's call will have a slightly different format from that of previous quarters. In that the speakers this morning will be limited to Mario Plourde, President and CEO; and Allan Hogg, CFO. Charles Malo, President and COO of the Containerboard Packaging Group; Luc Langevin, President and COO of the Specialty Products Group; and Jean-David Tardif, President and COO of the Tissue Papers Group will also be joining us on the call and will be available to answer questions at the end of the call. Before I turn the call over to my colleagues, I would like to highlight that Reno De Medici's interim report released on April 29 can be viewed on Reno's website. I would also note that certain statements made during this call will discuss historical and forward-looking matters. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings. These statements, the investor presentation, and the press release also include data that are not measures of performance under IFRS. Please refer to our accompanying Q1 2019 investor presentation for details. This presentation along with our – press release can be found in the Investors section of our website. I would like to remind the media and Internet users that they are in listen-only mode and can therefore only listen to the call. If you have any questions please feel free to call us after the session. I will now turn the call over. Allan?

Yes. Thank you, Jennifer and good morning everyone. So before we discuss the details of our quarterly results I will touch briefly on the impact of IFRS 16 the new accounting standard on leases that came into effect on January 1 2019. Slide 3 provides an overview of the impact. And as you can see, the new standard impacted all of our business segments. The new standard increased our debt by CAD99 million as of January 1, and our EBITDA by CAD30 million on an annualized basis. There is no impact on our cash flow profile and I would also note that financial figures were not restated historically as allowed by the standard. I will now pass the call over to Mario who will provide an overview of our first quarter results. Mario?

Thank you, Allan and good morning everyone. Overall, we are pleased with first quarter results with all four of our business segments generating good results that were in line or above expectations. Specifically, our Containerboard in Europe and Boxboard segment benefited from lower recycled fiber prices and more favorable sales mix, while result in Europe also reflect the recent business acquisition. Specialty Products similarly benefited from the recent business acquisition as well as generating improved results in the packaging sub segments. Combined these benefit have set the negative impact of lower recycled fiber pricing on the recovery sub segment. Finally, we are pleased with the sequential performance of our Tissue Paper segment, where stronger results reflect higher selling prices, lower raw material prices and lower production costs and improved performance of our [indiscernible] Mills. I will provide more color about the driving factor behind each of the segment results later in the call. On an adjusted per share basis, we generated CAD0.14 in the first quarter. This compared to earnings per share of CAD0.13 in the first quarter of 2018 and breakeven in the previous quarter. Again on an adjusted basis EBITDA of CAD135 million increased 29% over the last year and 19% from the fourth quarter. On a consolidated basis, our adjusted EBITDA margin reached 11% in Q1. On the raw material side the average Q1 index price for OCC brown paper grade was down by a significant 34% year-over-year and was down 10% compared to Q4. The average Q1 price for white recycled paper grade, which makes up for the large part of the raw material used in tissue, decreased by 10% compared to Q4 levels but remained 15% above prior year levels. On the virgin pulp side, both hardwood and softwood pulp prices were 3% below Q4 levels, but remained 10% to 12% higher than last year. Allan will now discuss the main highlights of our first quarter financial performance, after which I will discuss our business segments. Allan?

Yes. Thank you, Mario. We'll start with a quick overview of our key KPIs on slide 9. Our first quarter shipments increased by 1.5% from Q4. This increase was driven by Boxboard Europe where shipments were up 14% sequentially due to its acquisition of the Barcelona mill last October. Shipment levels decreased in our North American operations, which is in line with usual seasonal changes in demand. Our first quarter capacity utilization rate of 91%, increased by a marginal 1% sequentially and was 3% below last year. On a LTM basis, working capital came in at 10.4% of sales while consolidated return on assets stood at 11%. Moving now to sales on slide 10 and 11. On a year-over-year basis, first quarter sales increased by CAD 132 million or 12%. This reflects the contribution from recent business acquisitions in Boxboard Europe and Specialty Products segments in addition to improvements in pricing and sales mix and favorable exchange rate for our North American operations. Offsetting these benefits were lower volumes for all segment. Sequentially, Q1 sales increased by a modest CAD 34 million or 3% as the benefits of recent acquisitions and favorable sales mix in North America were offset by lower Containerboard and Tissue volumes. Moving now to operating income and adjusted EBITDA. On slide 12, Q1 adjusted EBITDA of CAD 135 million increased CAD 30 million from prior year levels. Results benefited from a stronger performance from our Containerboard and Specialty Products segment. Mario will provide more detail regarding these performances in a few minutes. Sequentially, Q1 adjusted EBITDA increased by CAD 22 million as shown on slide 13 earnings per share and this was largely the result of improved Tissue Paper and European Boxboard segments performances, which more than offset lower contribution from Containerboard activities. Slide 27 and 28 of the presentation provide details regarding operating income and EBITDA results for each segment on a year-over-year and sequential basis. Slide 14 and 15 illustrate the year-over-year and sequential variance of our Q1 earnings per share and that the reconciliation with the specific items that affected our results. As reported, earnings per share were CAD 0.26 in the first quarter of 2019 compared to reported earnings per share of CAD 0.65 last year. Both periods included specific items. On an adjusted basis, earnings per share increased by CAD 0.01 over last year results. High operating results were offset by higher depreciation and financing expenses. The change in depreciation expense reflects 2018 business acquisitions and capital projects put in operations and the adoption of IFRS 16 standard for leases. In addition, interest on other liabilities increased due to the put value of one of the partner in Greenpac as explained on Page 14 and 15. Slide 16 and 17 illustrate specific items recorded during the quarter. Our first quarter results included CAD 10 million gain from the reversal of liabilities following White Birch termination of its leases on the Bear Island Virginia facility and a combined CAD 9 million gain on financial instruments and FX impact on long-term debt level. We also recorded a total of CAD9 million of impairment charges and restructuring costs. Last year, we reported a CAD66 million gain related to the sale of the building and land of our New York Containerboard facility. First quarter adjusted cash flow from operations increased by CAD16 million year-over-year to year CAD85 million. Adjusted free cash flow was below prior year levels, as a result of the higher net CapEx paid in the current period and higher dividends paid to minority shareholders in Greenpac. Remember that Q1 2018 adjusted free cash flow included the proceeds from the sales of our New York facility. Moving now to our debt reconciliation. Our net debt increased sequentially by 6% or CAD109 million in Q1. This reflects, once again, the impact of the adoption of IFRS 16 in the amount of CAD99 million. Change in working capital was negative, as usual, in Q1, but was offset by the currency impact on our U.S. denominated debt. On a pro forma basis, to include our recent business acquisitions and the annualized impact of IFRS 16, our net debt leverage ratio stood to 3.4 at the end of the first quarter compared to 3.5 at the end of 2018. This, along with other financial ratios, and information about maturities are detailed on slide 20. On slide 21 we have detailed our capital investments during the first quarter on a segment-by-segment basis. Our expected CapEx plans for 2019 are also detailed on the slide and are still between CAD330 million and CAD400 million. As we have noted previously, the amount may vary depending on market conditions, the final approval of the Bear Island conversion project and the overall financial performance. I will now hand the call back to Mario, who will discuss the highlights on each of our segments. You can find an analysis of the factors impacting performance in each of these segments on slide 23 through 26 of the presentation and near-term business consideration are shown on slide 30. Mario?

Thank you, Allan. The Containerboard segment generated first quarter EBITDA of CAD104 million, representing a margin of 23.6%. This compare to margins of 23.5% in Q4 and 18.3% last year. On a sequential basis, EBITDA decreased. This was largely driven by lower volumes, which was partially offset by lower OCC cost and higher average selling prices. Our Canadian average selling price increased CAD10 per short ton from Q4 levels. This reflects stable pricing in Containerboard and a CAD25 per short ton increase in the average selling price of the converted products, which reflects a favorable sales mix in the quarter and a 1% depreciation in the Canadian dollar. Our Q1 operating rate was 88%, down 5% sequentially with paper shipment decreasing 26,000 short ton to 342,000 short ton, reflecting the same trend as Q1 last year. External shipments decreased 12,000 short ton, which increased our integration rate by 1% to 59%. Including sales to associated companies, integration decreased slightly to 71% from 73% in the previous quarter. Shipment of converted product decreased 7% sequentially in millions of square feet, underperforming both Canadian and U.S. market by approximately 3%. I will -- I would note, however, that we outperformed the market in Q4, making our sequential performance lower. In the first quarter we took approximately 7,000 short ton of scheduled maintenance downtime. We are cautiously optimistic for this segment in the near term, as more favorable OCC pricing and higher seasonal demand trends should our moderate the industry-wide demands and pricing headwinds. On slide 23, we have updated our downtime plan for 2019. The change reflects 3,000 short ton of downtime taken in the beginning of April to rebalance inventory. Finally, the Bear Island project is advancing well and we will provide details once plans have been finalized this summer. The European Boxboard operation generated solid results in Q1, reflecting good efficiencies in our operations. Sales increased 13% compared to the last year. This reflects the acquisition of Barcelona Cartonboard, the benefit of which were partially offset by lower sales volume in the same plan basis and the 3% appreciation of the Canadian dollar. On a year-over-year basis, the average Q1 selling price in recycled Boxboard decreased by €2 or 1% and the average selling price of virgin Boxboard increased by €45 or 6%. EBITDA increased 4% from prior year levels, driven by lower raw material costs and the contribution of Barcelona. A lower average selling price in the appreciation of the Canadian dollar partially offset this benefit. On a sequential basis, the 14% sales increase largely reflects the addition of the mill in Spain and the usual evolution following seasonal softness in December. Adjusted EBITDA increased by CAD9 million or 45% from Q4 levels primarily as a result of better volumes, lower raw material cost and energy credit received during the period. Looking forward, synergy from our mill acquisition in Spain and stable raw material prices support our cautiously optimistic outlook given uncertainty in regards to volumes. First quarter sales in the Specialty Products were CAD196 million, 14% above Q4, largely driven by the December 2018 acquisition in the Consumer Product market. Higher volumes in our packaging activities during the period were offset by lower sales in our recovery segment due to lower prices and volume. Q1 EBITDA of CAD12 million was 20% above Q4 2018 levels with half of this increase driven by recent acquisitions. The remainder of the increase reflects improved performance in packaging subsegments which more than offset reduced profitability in the recovered paper activity due to price erosion. The continued decline of the recovered paper prices have significantly impacted business unit profitability. Needless to say, these lower prices are very positive for Cascade’s other operation. Regarding the near term outlook, the recent OCC price decrease continue to impact recovery result in April and we are following the situation very closely as generation increased with seasonality. Market conditions for white grades remained positive for buyers. We are managing inventory to meet our fiber needs and to prepare for the lower generation season coming in late Q2. Overall near-term performance of the recovery segment is expected to continue to be negatively impacted by declines of recovered paper prices. Stronger seasonal volume and spread in packaging activities should help offset this impact. We therefore expect improved year-over-year results from this group. Moving now to the Tissue Group where first quarter results highlight the progress we have begun to make in addressing operational performance. This business has been facing challenging market condition over the past 18 months. However, while both recycled and virgin, white fiber remains elevated, they have begun to ease in recent months. Transportation costs have also stabilized which has helped overall profitability. Moreover price increases announced in all markets during the second half of 2018 positively impacted first quarter results, partially offsetting fiber and transportation cost increases. In addition, we have begun to see positive results from our improved initiatives primarily in Oregon. First quarter results reflect these favorable trends with EBITDA totaling CAD9 million or 2.6% on a margin basis. This compared to a loss of CAD8 million in Q4. That said, results remain below the CAD13 million EBITDA or 4% margin delivered -- generated last year. This is mainly due to higher white fiber cost both recycled in virgin as well as production cost increase which have not been fully offset by price increase announced in 2018. On the volume side, total shipment decreased by 2% year-over-year. Shipment of converted product grew by double-digit compared to last year, registering an increase of 11% due to higher demand in our targeted market segment. However, external shipments of parent rolls decreased by 29% compared to last year, mainly due to higher integration and strategic customer realignment. Volume level remains very positive for converted product and this is mainly due to the long-term contract agreement with key strategic customer. And as has been the case in the past, some additional subcontracting was required in the short-term basis to supply this volume which has impacted profitability. Among other things, our capital investment plan is aimed at addressing this situation. In terms of pricing, the average selling price increased by 11% year-over-year. This reflected the previously announced price increases, the higher proportion of converted product in our overall shipment and the depreciation of the Canadian dollar. On a sequential basis, our quarterly average selling price increased by 4% for the same reason. We announced another price increase during the first quarter of up to 8% in the away-from-home segment across North America effective June 1st. On an operational basis, higher raw material cost remain a headwind as did less favorable mix of white fiber used during the quarter. This negatively impact result by CAD14 million year-over-year. On a sequential basis, the decrease of white fiber and pulp prices positively impact our results by CAD4 million on a net basis. We closed one of our operations paper machine in Ontario April 15th with the second scheduled to close May 27th. As mentioned on our previous call, this site produced 44,000 short ton of tissue paper annually of which half was used internally. These ton will be sourced externally going forward. We expect near-term condition in the Tissue to remain challenging. That said, we are pleased with the progress in our operational effectiveness and remain positive for the coming quarter. On the demand side, we are now entering the peak season for many of our markets. In addition, recent easing of white fiber prices combined with an improved a pricing environment and better logistic executions should certainly support trustability. Before we open the call to questions, let me summarize by saying that we are pleased with our first quarter performance. All of our business segments generated solid results that were in line with or above expectation. The sequential improvement in Tissue is of particular note and we -- with the new structure in place, our outlook is positive for this segment. Slide 30 of our presentation highlights -- outline near-term trends for our operations. Overall, we expect second quarter performance to benefit from positive seasonal demand and more favorable raw material pricing. More specifically, we also anticipate that our Containerboard segment will continue to contribute strongly to our performance. On the strategic side, we remain focused on successfully executing our capital investment plan and on continuing to improve our operational efficiency and productivity. On that note, we will now be happy to answer your questions. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Mark Wilde from Bank of Montreal. Please go ahead.

Good morning.

Good morning.

I have a few questions. First, I wondered if you could just give us a little bit of color on how you're thinking about kind of the Bear Island project right now? I know you said you have more details this summer. But just given the softening that we're seeing in the Containerboard market, are you kind of rethinking timing or the premise of this project?

Mark this is Charles. So we keep -- doing the same as what we announced on the other prior calls. We are working on the final presentation to get the Board approval. We understand that there is a lot of discussion right now on the slower demand. But as we explained in the past this is strategically a good project for Cascade. The location is well situated and -- for our growth and our positioning. So as we are -- right now we are still on course to do the presentation before the end of the June and we'll provide more information as we go.

And Charles, does the fact that the mill is idle right now, does that pose any big issues?

There is actually -- we had planned for this when we did a negotiation with the White Birch Group. So right now, what this is giving us is more flexibility to take our time, to prepare the sites for our future conversion. So when you have more time like this, there is a lot of work that we can do like cleaning all the testing that we had to do on the equipment were done prior to the machines being shut down. So we did work with the prior owner on that. So as we see this right now is we can work on our schedule and have more flexibility. The financial impact of the deal, because the way that we have structured this will be minimal for the Cascade. There is -- when we planned the acquisition everything was built in the acquisition parts.

Okay. All right. That's great. And then just toggling over to the Tissue business. There have been a couple of big developments recently and I just like want to get your sense on how this these had impacted your business if at all. We had the fire which has basically taken out the Marcal Tissue mill. And then we've also got the bankruptcy of workers, which I think many people have been anticipating for some time. So I just wondered if it's possible to talk about the impact of both of those on your Tissue business? Jean-David Tardif: Yes, Mark, this is Jean-David. Yes, for sure this is creating some jumbo loan availability on the market. So right now we're looking at some opportunity as Mario said with the Toronto closure there is some sourcing that we are going to do externally for Soundview and for Orchids, we don't know what will happen at this moment and we'll be looking at it carefully and follow the evolution of the market.

Okay. And then just lastly, I wondered just these Boxboard business, if you could give us some sense just what you're seeing in terms of kind of volume and throughput over Europe?

Q1, so that’s a little bit deflating as Q4. So in Q4 we saw a dip in the order intake about seven days compared to the usual of 2018. So Q1 is at the same level right now. We are still equal to what we had in Q4. No big dip, no more than what we saw. So stable market right now in Europe.

And how is pricing doing in Europe just given that the recycle fiber prices have come down so much and you got this fairly static economy over Europe?

The pricing of waste paper has not come down as much as North America. So it has less of an impact on the recycle grade. On the virgin inside, as I just mentioned on the call we had a price increase of €45. So it's beneficial on that side. So the dynamic is a little different in Europe than it is in North America. We have not seen as much lower price of waste paper in Europe.

Super. That's helpful. I'll turn it over.

Thank you.

Your next question comes from the line of Hamir Patel from CIBC Capital Markets. Please go ahead.

Hi, good morning. Charles, I just wanted to follow-up on that White Birch comment. So what's the latest thinking of the project does go ahead? When is the earliest it would be in production?

We are sticking with the same amount at this point same day, sorry, when we talked about 2021 -- end of 2021 production.

Okay, great. That's helpful. And I was just looking at the waterfall charts and looks like in Q1, I didn't see any reference to the benchmark price as a headwind. So was there any unusual mix in the quarter or maybe if you could speak to what sequential decline you’d expect in Q2 on pricing?

I'm sorry. Can you just repeat the last part of your question?

Yes. So I mean, the benchmark, obviously, came off this year, but it doesn't look like that weighed on your Q1 numbers. So what was going on in the quarter on the mix side?

We did sell more converted products than we sold outside rolls and that's why our pricing has a benefit or benefit impact -- positive benefit impact.

Right, okay. And then on the volume side, it looks like the U.S. industry box shipments were down, I think about a 0.5% year-to-date you guys were down 3%. So do you think you are losing market share, or did Canadian industry demand got worse than U.S. in the first quarter?

No. If you look at -- first of all year-over-year, our overall is about 1% lower from year-over-year. So I mean this is for us not significant at this point. When we look at the -- from Q4 to Q1, we did have a lower than the average -- when you look at the -- compared to our peers, but we did have a very good Q4, so which explains a bit of the gap that we have compared to the market. So we had -- when we look at Q4, we had about 3% more than the average of the market.

Okay. And Charles, can you update us what's your thinking on OCC for the balance of 2019?

I will let that question to Luc for the OCC.

Good morning, Hamir. The market now is pretty much the same it was since the beginning of the year. Meaning by this, we have very high supply way above the demand, so we don't see any significant change in the price of OCC for the rest of the year with the current conditions that prevail.

Okay, great. Thanks. That’s all I had. I’ll turn it over.

Your next question comes from the line of Sean Steuart from TD Securities. Please go ahead.

Thanks. Good morning. Congratulations on the better results. First question on tissue. The 5% sequential improvement in price realizations, how much of that was the various second half of 2018 price increase initiatives? And how much of it was a better mix with higher integration rates? And what were the percentages of parent rolls? And following on that, how should we think about price realizations trending into the second and third quarters of the year?

It's tough to evaluate precisely, but I think it's probably half-and-half.

Okay. And then beyond the away from home hike in June, can you just give us a rundown of where things stand for a price increases on the retail side?

Well, the announcement was on away from home June 1st. And there is no – as of today, there is no new price increase on the consumer product side.

But I guess from the previous price increases are those fully baked into the Q1 realizations? Or would you expect some follow through in the second quarter?

There is still some follow through to come in Q2.

Okay. And second question on Bear Island. And I appreciate – you have more to say in a few months of probably. The initial budget that you gave to everyone, I suppose it was last July, in light of steel cost inflation, presumably just a lot of general capital cost inflation, are you still comfortable with that budget for the project going ahead?

Yes. At this time point, we're still in line. As we said at that point, we went with the high level budget that we presented, but we did give ourself some margin of maneuver and the amount that we said. So we're still in line with what we presented.

Okay. That’s all I have for now. Thank you very much.

Your next question comes from the line of Zachary Evershed from National Bank Financial. Please go ahead.

Thank you. Great quarter, guys. Luc, with OCC cost pretty much checking those, maybe you could talk about how you view the specialty recovery segments breakeven point? And how or whether you plan to manage collection curtailments?

Well, first of all, the price of OCC is actually very low, but the entire industry of recovery now is reviewing the business practice that used to govern the industry. So what we see now and the Cascade is no different and than the rest of the industry is that people are coming with service fee, surcharge to the generator for the service they provide. So the revenues that are not coming from the selling of the OCC or the fiber will obviously have to come from somebody else and that's going to be the generator. We need to understand that if this product is not going to the recovery facility, it's going to the landfill and there will be a charge. And in certain states and provinces, it's actually forbidden to send OCC to the landfill. So what's going on now is a different way of approaching that business. Obviously, it's fairly recent, because as you understand we have seen -- we have observed 40% decrease in pricing since the beginning of the year, so the industry now is making direct moves. And so, our objective is to get back to profitability with our recovery operation and the Packaging segment is doing well and we are getting in into favorable quarters. So I would think that by probably the third quarter, we're going to be on track with recoveries. It's going to take a quarter to implement what we have to implement at least.

Thank you. That's helpful. And with OCC cost as low as they are, are you seeing pressure from customers looking for discounts versus say virgin linerboard prices?

We have in our product and we’ve been mentioning that the product that we have is a high-quality product. So, right now, we're selling our product with same characteristics for almost as virgin. So we're still filling ourselves for the characteristic that we're selling. The article -- the second article that came or published did mention that they are right now spot deals. There are some recycles that are being sold at different levels. But as we speak, we have a long-term relation with our customers and we are providing the service and the quality. So at this time, we are selling our high-value product on the market. So, we're not seeing higher pressure for one type or the other product as we speak.

Thanks very much for clarifying. Last one for me. Given your reiterated capital expenditure budget, maybe you could talk a little bit about your other capital allocation priorities versus NCIB and debt repayment?

Well, as we always said we always aim to have that free cash flow remaining after CapEx to reduce debt or to do some tuck-in acquisition as we did last year. So that's debt is the priority along with our capital plans.

Thank you very much. I will turn it over.

Your next question comes from the line of Paul Quinn from RBC Capital Markets. Please go ahead.

Yeah. Thanks very much. And sorry if I repeat my questions here, bouncing around, it’s been busy morning. But just decent turnaround in tissue, just wondering if the operational issues are behind you or how you characterize that? Jean-David Tardif: There are still some, for sure, that we need to be challenge and work on, but we've made some changes in management in quite a few places in the group. And we're really positive about the trend right now and what’s being accomplished as we speak, but there's still for sure some challenge to overcome.

Okay. And then just slipping over to Containerboard here, we've got a couple of major guys taking related downtime some significant right now. Are you guys able to run -- just give you a smaller percentage of market. Are you able to run flat through any kind of weakness going forward here?

We have -- we are seeing like the rest of the industry slower pick-up for seasonal demand. So we have in the second quarter of the month of April we have been taken some downtime of about 3,000 tons as we speak. So we will make the decision, the necessary decision to balance our inventory levels and also our demand as we go. So we are seeing a slower demand or pickup -- seasonal demand like the rest of the market is seeing right now.

Okay, so you are basically following the market trends?

Yes. We are managing our own inventory levels and our demand. So yes, we are seeing about the same trend of the users of rest of the industry.

Okay, and then just a question to Luc on the recovery side. Yes, my understanding is that the recovery industry is really changing. What is -- best practices that you guys see? Is that, I mean, obviously, in DC here we’ve got a different model when you go to Quebec, it seems to change by province and I have no idea what happens in the state. So maybe you could just outline -- what you'd like to see and whether you’re moving towards that?

Well, we benefited for numbers of years from the fact that a lot of the recovered material was going to Asia and no significant effort in quality was done to improve the quality of what is collected and what is recovered. I think the best practices that will have to be implemented is the effort of all the parties in the supply chain to improve quality. And because there so much we can do -- could be done at the sorting but the -- each individual, each citizen will have to do its part to improve the efficiency of the supply chain and encourage the recovery of the material. Cascade is a company that has been promoting sustainability. We still believe that’s the way to go. We can not adjust spoil material that is readily available. You know, we will encourage recovery. And as the corporate citizen we're going to help -- I know there are discussions with the different part of government and associations and we will be participating to this discussion to improve the efficiency of the supply chain. I think that's the biggest challenge we have in front of us.

All right. That’s all I had. Decent color. Thanks, guys. Good luck.

Thank you.

[Operator Instructions] And your next question comes from the line of Mark Wilde from Bank of Montreal. Please go ahead.

Yes, just wanted to come back to a couple of things. One on the OCC side. Do you guys have a ballpark estimate for what it cost to recover and process OCC?

It's very difficult to say that because it really depends on where you pick up the material. Obviously, if you go and get the full truck loads of OCC in the back of the DC center the price of the handling the material will be very low. If you have to pickup two bales in the back of a retailer, it's another cost. And that's exactly the things we're looking at now is trying to improve the logistics of the material, reviewing the raw thing putting in place some business rules about minimum quantity frequency of pickup, so we can reduce that cost of collecting the material. But it can vary significantly from 10 box to 55, 60 box a ton to handle that.

Okay. I'm just curious. Are you seeing any reduction in collection because of the way prices dropped?

Not yet.

Or it’s the fact that the tipping rates at a landfill are so high, is that kind of continuing to push stuff into the recycling stream?

Well. I think there's a part of that that is we have to pay and we’re going to send it to the landfill. A lot of companies also have sustainable program, a sustainability program in their company. So they cannot just throw these recovered material in the -- at the landfill. I think it's a little bit early now. But we haven't seen any significant drop yet on the volume we collect. Actually the supply has been very good in the recent month.

Yeah. And this has create like an opportunity for you right now as you think about Bear Island, I mean you're in the middle of a big population center there near Washington DC, very close to Richmond. Would you be able to get some kind of favorable terms on long-term offtake agreements from municipalities that are trying to figure out what they're going to do with all those waste?

Yeah. You're about right. I think thanks to the infrastructure that Cascade has in place. We think we could -- we will be opportunistic in the current difficult market conditions. And yes, we think it's a plus for Cascade overall, if we do the right things.

And I just finally on this with recycling at Bear Island, any thoughts about fiber mix? Because it seems like a lot of companies in the Containerboard industry, and I think that Pratt or maybe Kruger up at Three Rivers are using more and more mixed waste in the fiber mix and is that part of your game plan at Bear Island?

So, it's a very good question. Thank you. Part of our planning right now is we did send a team to visit a lot of paper mills. There is a new -- we have the luxury of starting our stock perhaps from scratch. As you know we will have to add this up to the project. So in the planning, we have an option to maximize the use of different grades. So this is one of the big advantage of this project. Long-term, as we were going to have the flexibility to run with the lot higher mixed ways than what we are using right now in some of our other facilities due to the fact that we're in the design mode right now and we can use the new design to -- for the future.

Your next question comes from the line of Hanbo Xiao from Desjardins. Please go ahead.

Hi. Good morning. It’s Hanbo for Keith. Thanks for taking my questions. First on -- just on a high-level, I wanted to get your thoughts on what the potential impact from tariffs and the ongoing trade wars between the U.S. and China. What that -- how that impacts your business on a high-level?

Well. So far the only area where we see impact is, when we're acquiring equipment coming from overseas. So, obviously this has put pressure on the cost of the equipment we acquired, because steel is not -- aluminum is not made in North America. For the rest of the business that we were set and we have plants in Canada and the U.S. and they were quite balanced in the volume we trade between the two. So, it has the minimal impact on our trading with the U.S. It's mostly with the equipment we acquired from abroad.

Okay. Thanks very much. And just on the Containerboard. Outlook for second quarter 2019, you're guiding for higher volumes year-over-year in 2Q, just given the reduction in capacity utilization across the industry. What gives you confidence in that volume increase year-over-year?

We have two reasons to give you. First of all, our converting or internal demand that we're seeing right now. And also as I mentioned, we're seeing a bit delay in the seasonal pickup. So that's why we're seeing like this. And in addition, also as you know, we have our new facility that we have in New Jersey, which is going to bring some better input for us. But we're cautiously on the uptake. So, we did put the arrow up. But it’s cautiously up.

Okay. Thanks very much.

There are no further questions at this time. Mr. Plourde, I'll turn the call back to over to you.

Thank you, Operator. Thank you, everyone, for making the calls and looking forward to meet you on the Q2 results. Thank you very much. Have a good day.

[Foreign language] Ladies and gentlemen, this concludes today's conference call. You may now disconnect.