John Luke, Chairman and CEO, MeadWestvaco Corporation
Thanks, Mark.
Operator
Next, we go to Mark Weintraub with Buckingham Research. Please go ahead.
Mark Weintraub, Buckingham Research
Thank you. First, on the doubling of the business of Specialty Chemicals over the next five to seven years, I assume that’s a reference both to revenue and EBITDA, etcetera. How much in the way of capital do you think will be required to achieve those types of targets?
Robert Beckler, EVP and President, Packaging, MeadWestvaco Corporation
This is Bob. On the doubling of the business, it is really going to be multidimensional. It comes from volume and mixed growth that still exists in the capacity structure of the business today. We have made some good investments there that we’re continuing to unlock. We are continuing to extend our global reach through both marketing efforts and our investments globally. I would just get a little bit more granular for you, I mentioned in the prepared remarks around the carbon business, this just continues to be a very attractive and rapidly growing sector of the business for us around the world where evaporating fuel emissions from vehicles are a very significant source of pollution in parts of the world, particularly in the developing markets like China. Even within the U.S., the government is taking steps to further raise the bar that is creating really interesting and in value creating opportunities for us that donot require a lot of capital here in the U.S.
Then, I can give you similar remarks around asphalt, oilfield, and adhesives, which will just require incremental investments as we go forward in our ability to derivatize from the pine chemicals refinery base. The final remark I would make is that this business historically has done a really nice job with incremental inorganic investments to build out the platform, and we see that continuing. Just another reason,back to Mark’s earlier remarks, why we want this business to remain wellfunded for its growth.
Mark Weintraub, Buckingham Research
Very helpful, all makes sense. I realize it is premature to be overly specific, but are we talking order of magnitude, one-and-a-half times the DDNA or is it three times, in any way you can kind of frame or quantify a little bit for us what type of capital would be underwriting the growth?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
I think Mark, it’s a little bit premature to get into that. Certainly there will be some details relative to path, forward capital requirements included. That will be laid out in the Form 10and it will be an evolving story, but what we do know is that to Bob’s point, one, there are substantial opportunities for us to continue to grow organically, but it will require a capital for capacities. We do see some opportunities for inorganic growth as well, but more common in all that.
Mark Weintraub, Buckingham Research
Okay. Lastly if I could, we can see what the segment EBITDA for Specialty Chemicals is, can you help us understand a little bit what type of other entity costs there might be, as you separate the business? How that segment EBITDA is going to translate into the new company’s EBITDA generation, that kind of backward looking even. How about that?
Mark Rajkowski, SVP, Chief Financial Officer, MeadWestvaco Corporation
Yeah Mark, great question. We’re in the middle of our work right now in terms of being very specific in terms of what it is going to take to stand SCD up as an independent public company and what I can tell you is that those margins will remain very attractive, but again, that will be work that will become more clearer as we file our Form 10.
Mark Weintraub, Buckingham Research
Okay, thank you.
