Martin Englert: What does this do with silicon metal looking at it from a segment — what does this do to the go-forward margin profile, EBITDA margin profile of that business? I understand that these products are fairly high margin, high value. And I guess any kind of framework that we should think of when we think about kind of legacy silicon metal margins but what it could look like 2025 forward with more of this in the mix?
Unidentified Company Representative: Yes. Thanks, Martin. I mean of course, with a higher proportion mix tilting towards these specialties, you would certainly see an earnings profile transformation. The way I’d see it is typically, your aluminum sector will take a bit of a knock with the recyclability and the shift of the general industry going towards EVs. But the chemical sector favoring electronics, photovoltaics, these areas are going to take more of a share mix of our portfolio and the greater silicon metal market. So without a doubt, that profile, that earnings profile will change tremendously, as you pointed out.
Martin Englert: Okay. All right. Thank you for all the detail and color. Congratulations. I thought that you all did a very nice job but I think it’s a tremendously difficult environment in Europe as well as the North American market, maybe to a lesser degree. So congratulations on the results.
Operator: We will take our next question. And the question comes from the line of Michael Lam from Jemekk Capital Management.
Michael Lam: Yes. In terms of — when I look at the end-use demand that your products go into, I mean, your auto production has been flat and going higher. Solar, I’m less familiar with how the solar production ramp is. But it looks like — like how much of your volume decline in Q3 was customer destocking or you mentioned also increased competition from imports?
Unidentified Company Representative: Yes, if I may. Thanks, Michael. In Q3, we saw a number of headwinds coming from a variety of different challenges across the area, whether it has been just the severe global inflationary pressures or actually regional energy situations or just the zero COVID policy. When we looked at how intervention was taking place on the supply side, there was a number of actual supply production coming off and that was meeting or matching with the demand balance. So in effect, the market was becoming quite balanced. So the liquidity of those sectors had really balanced out. As you pointed out on the chemical side, we had a number of customers who had expressed concerns around the economic situation and obviously the consumption starts to drop as they are currently preferring for decreasing towards year-end.
To the earlier question that Martin was asking, we have seen also an increased demand in the premium but unfortunately, there hasn’t been enough to make up for the short term that we had seen in siloxanes or aluminum industry. Moving forward, I mean, generally, the chemical sector is going to be robust and it is of the growth in the future — up in the medium term as demand for solar grade and that’s what has been driving it to batteries, going to pick up. Aluminum, yes, you’re talking around the auto sector. And we think there’s going to be a little bit of a lengthy slowdown primarily due to the auto sector. Started off with semiconductor shortages, but we will — additional curtailments in aluminum production because of the very high production cost primarily in energy.
And so — but going forward, at least a high growth rate — a growth of a high base but at a slower rate expected in the longer term, as I’ve mentioned earlier, you can relate it to aluminum and we’ll have to go to a transition based on the higher uptake in recycling and the general transition to EVs.
Michael Lam: And then last question is just what is the estimated like cost of ramping up Polokwane?
Unidentified Company Representative: Yes — that’s — yes, Benjamin.
