Jeff Glajch: Thanks Jon.
Operator: Thank you. Our next question comes from the line of Chris Kapsch with Loop Capital markets. Please proceed with your question.
Chris Kapsch: Yeah. So my follow-up is kind of a bigger picture one and on slide three of your presentation, you talked about being on track for the 2025 mid cycle capacity of $500 million in EBITDA. I’m just kind of wondering, obviously there was never an expectation to get there linearly, and there’s business cycles and so forth, and the world changes seemingly every day almost. But I’m just kind of curious what sort of levers or pieces you would need for — in a theoretical waterfall to get there, whether it’s economy or pricing between now and then, or different recoveries in end markets and specialties. Maybe you could just talk about the bridge to that kind of threshold. Thank you.
Corning Painter: Yeah. Great. Thanks Chris. All right. So let’s get a couple different things. So we start on pricing. To be clear, we see the pricing that we achieved in 2023 to be the baseline, right? I don’t want any confusion around that. We see that’s a number from which we can continue to grow, that the market continues to tighten for rubber carbon black in North America, in Europe, actually in South America as well. So you can just see that in the tire capacity being expanded, we’re going to need to be able to — we’re going just clearly to have pricing power in that environment and we need to rate prices to get return on all the capital we’re putting into air emissions. It’s only fair. So I think the pricing part is something we can continue to build on from here.
And I think in specialty, we can continue to drive our mix in a favorable way in any one quarter, like the current quarter, do you exactly know what your mix is going to be month to month? Hard to say, especially in the today’s topsy-turvy economy. But I think the trend is clearly with it, and you can see it in the numbers we’ve posted. Next, our target is a 2025 mid cycle economy earnings capacity, right? So we see ourselves in no way in a mid cycle economy right now, certainly for the materials, for the chemicals industry, I don’t think this is mid cycle where we are. So yeah, we’d expect some recovery in volume. That volume’s going to flow in very nicely for us. And then we continue with the various growth of investments that we have. Principally the La Porte project, I do not expect to fully load La Porte in 2025.
So I expect to have the capacity in 2025, not the full EBITDA from that. We’ve always said, right, it’s going to take a year or two to get those products qualified into the right markets. But I do think having that capacity in the United States in that timeframe, looking at a number of these giga fabs, right, I think that’s going to be really positive for us. So I see that as, as really pretty low risk. If you think about the three big levers that we had to get there. Well one was La Porte, so that project continues. It’s on track. We will do very well with that. Another one was pricing and mix. So we already achieved everything in pricing. Although it is just awkward in terms of competitive dynamics, depending upon how much I say, look, I think it’s a positive fundamental environment that we’re in.
And then the other one was, things like Huaibei. Well, Huaibei is up and running, product is shipping. I think those things are all going to deliver for us. So I think we’re very much on track for that. Are we going to have a mid cycle economy in 2025? I don’t know. We’ll have to see, but we’re going to be ready for it. And I think that’s what’s really key here.
Jeff Glajch: And I think, Chris, just to layer around what Corning said early on in his response, clearly a big lever there is, is volume. And the volume is a function of where the economy, where the market demand is at the time.
Chris Kapsch: Fair enough.
Corning Painter: Yeah. I would say other thing is like, we’re not going out to chase volume in specialty. That isn’t really there. I don’t think that’s the way to run a specialty business. So we’re cautious on that. I don’t think we’ve lost share, at the same time we’re entitled to the premiums that we have in our specialty business. Stuff performs very well.
Chris Kapsch: Thank you for the color.
Corning Painter: All right. Thank you Chris.
Jeff Glajch: Thanks Chris.
Operator: Thank you. There are no further questions at this time. I’d like to turn the floor back over to Corning Painter for closing comments.
End of Q&A:
Corning Painter: All right. So thank you to our analysts and the investors for your insightful and penetrating questions today. We really appreciate your interest, your continued support, and look forward to seeing some of you soon as we’re going to be on the road later this month and in December talking to investors. Thank you all for your time.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
