Kevin McCarthy : That’s helpful. And then switching gears. It sounds like you’re contemplating a new MIRALON plan. I think your prepared remarks that were released last night said you’re evaluating a 5,000 ton plant. Can you just talk a little bit about the opportunity there and put that in possible investment into context, not sure how much that might cost, for example, to build that out?
Peter Huntsman: Well, we’re in the process right now. We should be starting up the early part of this next year, a 30-ton facility. And just as a reminder, if you were to go to our [indiscernible], if you will, our R&D facilities, we developed this technology, we started with a number of machines that we’re building — that we’re producing literally 1 pound a year of capacity. We then went to 100 pounds per year of capacity. At that point, we started selling to NASA in the very high end where you’re looking at thousands of dollars of cost per kilo. We then went to a one ton per year, and that proved to be a success. We’re building a 30-ton facility right now in Texas. And when that is complete, we’ll be looking at replicating that facility and actually putting it in one of our facilities, where we’ll be able to take one of — we’ll be able to take the byproduct, hydrogen, in one of our own facilities and take the MIRALON material on the other side.
And that will be the first “commercial unit”. I say commercial that all of the output will be fully utilized. And when you’re looking at that 30-ton facility, you’re looking in the low tens of millions of dollars as far as the overall cost on that facility. Again, to date, those facilities have only been built in a controlled environment and putting it in the middle of one of our facilities is going to be a real world of experience. And we’ll be starting on that project, which will take somewhere between 9 and 12 months to complete sometime the latter part of ’24. Then going to a 5,000-ton facility, we see that starting in early ’25. The 5,000 tons of capacity, if that proves to be successful, we will have a product that we think will be very competitive on a commercial scale for applications anywhere from traditional carbon fiber applications to going into strengthening concrete to going into EV batteries.
And we’re in the process right now of qualifying and getting into a number of those applications. So very crucial time over the course of the next 18 to 24 months as is in any chemical process going from a bench to a pilot plant to a commercial operation to world-scale operation and I see all that being completed. So Kevin, I’m probably way more information than you’re looking for. But it’s something that we’re pushing as aggressively as possible without cutting any corners on the technological side.
Phil Lister: Kevin, less than $50 million of capital for all the investments that Peter has just — and spent over a number of years and contained within all of the total capital expenditure that we’ve outlined for 2024.
Operator: Our next questions come from the line of Vincent Andrews with Morgan Stanley.
Vincent Andrews : Peter, just wanted to square your comments on decelerating the pace of the buyback from I think you were doing 100 a quarter to now maybe it’s going to be 50 in the fourth quarter. In the prepared remarks, you referenced just sort of obviously what’s happening to the EBITDA in the fourth quarter in the operating environment. But I think I heard you on the call talk about you also wanted to have some spare capacity for M&A. So I just wanted to get your latest thoughts on M&A and how you think about what might be out there versus your own stock trading in low 20s?
Peter Huntsman: Well, I think right now, from everything we see, our stock remains a very competitive buy and [indiscernible] value, unfortunately. But I think that as we look at the broader M&A market, we are seeing a, I would say, a slight improvement on multiples coming down. And as multiples come down, it’s not — that doesn’t — that’s not the only part that’s changing asset valuations. EBITDA, for most assets we look at, are also coming down. And so as we’ve kind of seen the end of free money, if you will and I’m seeing a little more competitive environment today. But more importantly than the M&A market, I think, for our Board of Directors in our discussions around share buyback is we want to have consistency and we want to have reliability.
And the discussions around our Board table and over, can we afford it this next quarter or even this next year, but rather how do we have a reliable program that people can count on for the next couple of years? We’ve got a balance sheet that can weather the storm. They can give us opportunity, flexibility, but also make sure that we’re competitive with the best of our peers in the chemical industry on returning value, returning cash to shareholders. So I think it’s really a balance of all of those things. So I don’t want you to look at the fourth quarter change as just a knee-jerk reaction to a single quarter. But rather, let’s assume that we want to have that flexibility across the board. And I think — I still think as I look back on what we bought back this last year at the price of our stock, our dividend and so forth, we’ve been one of the best in our industry as far as returning value to shareholders.
Phil Lister: Yes. I think if you close out the year, we’ll save in excess of $0.5 billion to shareholders through a combination of dividends and share repurchase throughout this year.
Vincent Andrews : That’s very clear. As a follow-up, I think I also saw that you anticipate completing your planned cost saves program this year as intended. Are you contemplating anything for next year?
A –Peter Huntsman: Well, I think that we’re always looking as to how we can be doing things better and more efficiently and more effectively. I think as we look at our overall portfolio, depending on business conditions and again, I think that we probably have seen some other unprecedented conditions. I said, we’ve never seen a year where MDI consumption has fallen 2 years consecutively. We’ve got to make sure that we see the realities in the marketplace and that we calibrate the business, the cost structure and so forth accordingly. So we’ll see $60 million in benefits in 2024 that we didn’t see in 2023. That’s largely because we’ll have an annualized savings of 2024 over 2023 of the cost savings will be completed by this year.
But again, the day we sit back and look at our portfolio and say it doesn’t need to be changed or our cost structure is perfect, probably a time when a new management team needs to come in because I think that’s what – largely what we get paid to do.
A –Phil Lister: I think we see some additional opportunities in our manufacturing cost efficiency as well as completion of the European transformation. We do need to balance next year in terms of making sure that we’re limiting the amount of restructuring cash net needs to be a real focus on free cash flow and free cash flow generation overall, as Peter said, $60 million of year-on-year benefits to come from what we’ve done this year.
Operator: Our next questions come from the line of Frank Mitsch with Fermium Research.
Frank Mitsch : As I looked at the guide for the fourth quarter, I understand the macros are not great. But the number was pretty low in terms of what you’re guiding. And Peter, as you started the call, you said, look, things are murky. We haven’t even started the end of year sort of changes by the customers, maybe they’re destocking or what have you, into year-end. So can you give us some more color as to how you came up with the $65 million to $90 million guide for the fourth quarter? What’s kind of embedded in that? And if I could be so bold as to ask a more granular question, what the heck did you guys report in October in terms of profitability? How much of that $65 million to $90 million is kind of already in the bank?
