Huntsman Corp. (HUN) Vertical Research Partners Materials Conference Corrected Transcript 15-Jun-2017 process. And so I think most of that again, the spending and the benefits should be pretty closely aligned on a within a quarter or so of each other. ................................................................................................................................................................................................................................ Q Kevin W. McCarthy Analyst, Vertical Research Partners LLC Let's talk about polyurethanes for a little while. Is there in your view a disconnect between capacity utilization rates that you might see out there in the consulting community, or Wall Street for that matter, and the real world tightness in MDI [indiscernible] (23:55)? If so, why is that? And taking into account various outages, how sustainable is the current environment in your view? ................................................................................................................................................................................................................................ A Peter R. Huntsman President, Chief Executive Officer & Director, Huntsman Corp. I think that, first of all, when we look at polyurethanes, I think the market continuously ignores the idea that polyurethanes is continuing to grow at a rate over the last 20 years. This has grown at 7.2% over the last 20, 22 years now. [ph] Absent (24:24) recessions and so forth, it's continuing to grow at or better than twice the rate of global GDP. And I think that as we look at the growth rates today, we're seeing solid mid -single-digit growth in Europe. We're seeing today close to 8% to 9% growth in North America and we're seeing Asia growth of around 6% or 7%. Now those are going to fluctuate quarter-to-quarter and during seasonality and so forth, but we continue to see very strong growth, the underlying polyurethanes industry where you see growth. You also are seeing a kind of whole wave of new technology of facilities that are designed around single 400,000 tonne line. Now, when you think of a single manufacturing line of 400,000 tonne and you get a single contaminant gets into that raw material stream and you're dealing with an isocyanate with an extrem ely sensitive process, it does not take a lot for that line to have a hiccup. When you have a hiccup in a 400,000 tonne line, the entire plant goes down. It used to be in our existing plant you've got multiple 75,000 to 100,000 tonne lines. If a line goe s down, you still got two or three other lines and you're consistently having lines going down in MDI. That's not a secret. If you have a single 400,000 tonne line, you're going to have just by the nature of the manufacturing process, you're going to have more outages and disruptions, no matter and I think worth repeating again [indiscernible] (26:03) some of the best manufacturers in the world, it's just that the overall technology is inherently difficult to run. It doesn't take a whole lot to flip it offline. If one of these massive lines go down, they don't go down for a day or two. They usually it's a couple of weeks until they go down and you put them down, you fix the problem, you decontaminate the process, and then you gradually start it back up again. I think that when people I don't think people actually look backward how difficult it is to run these world-scale facilities. Lastly, I think when people look at this thing, I've got 300,000 tonne line that I'm bringing into the market in 2018. People automatically assume 2018 we got 300,000 tonne. [indiscernible] (26:45) take six months to start one of these facilities up and you get the product just right, you get the balances just right. And so, as I said earlier, for the last four or five years, it seems like every year that is the biggest question I get [ph] at MDI (27:01), well, next year you've got 700,000 tonnes coming into the market. You're going to get crushed [indiscernible] (27:05) capacity utilization rate. And then a year later we end up seeing that the markets really weren't all that bad. That much material really didn't come into market, and the markets are better than anybody expected, and I think that that's probably the [indiscernible] (27:19) continue going forward. We have one more world-scale [ph] grassroots (27:23) facility. [indiscernible] (27:25) is in the process of starting up right now as we see. The last world-scale facility that will be starting is Huntsman's facility, we're mechanically complete and we will be starting it up in the early part of 2018, and we're starting it in China, which is a market where we were sold out. We're limited on our growth in MDI right now, because we don't have the capacity. We're 9 Copyright © 2001-2017 FactSet CallStreet, LLC 1-877-FACTSET www.callstreet.com