Hi, good afternoon, everyone. Thanks for joining us. Very happy to have the Albemarle team here. We have Kent Masters, Chairman and CEO, Scott Tozier, Senior Vice President and CFO, Meredith Bandy, VP of IR and Sustainability, and then Sharon McGee, VP of IR and Corporate Development. Really the way that this event got started was the approach of focusing some on ESG. We're going to start out there, and we'll turn it over to Kent for some opening remarks, and we'll have a few questions on ESG, then we'll dig into lithium, bromine, catalysts, and capital allocation.
Thanks, Ben, thanks to Baird for hosting us today. I want to start with a few remarks on Albemarle's strategy and sustainability framework. As most of you know, I joined the company as CEO in April of this year. I've been a member of the board since 2015 with the Rockwood acquisition, I had been a member of the Rockwood board since 2007. I'm fortunate that I've been able to work closely with the management team over the years to help establish our strategy, our purpose, and values for the corporation. I'm confident that Albemarle has the right strategy in place, our execution of that strategy will evolve to address changing market conditions. Specifically, we will invest in and grow our lithium business. We will fund lithium growth with cash flows from our entire enterprise.
We will maintain a disciplined approach to capital allocation and actively manage our portfolio to generate shareholder value. We will do all of this with a sustainable approach as our foundation. Sustainability is an important strategic priority for Albemarle, and I'm proud to say that more than half of our revenues come from products that help reduce greenhouse gas emissions or promote greater resource efficiency. In December of 2019, we announced the results of our materiality assessment, identifying the sustainability topics most relevant to Albemarle's strategy and our future. That assessment came from employees and leadership, but more importantly, it came from our customers, vendors, and investors. With that feedback, we developed our sustainability framework focusing on four critical quadrants. First, our people and the workplace, with a focus on safety, diversity and inclusion, and talent development. Second, natural resource management.
Essentially, how we minimize our footprint and do more with less of the Earth's resources. The third quadrant, community engagement, having a positive impact on the communities where we live, work, and play. Finally, a sustainable business model which creates long-term stakeholder value through our commitment to quality, innovation, financial stability and reliability, and ethical business conduct. Our recently published sustainability report sets the baseline for our environmental performance and provides greater disclosure and transparency for our stakeholders. Now we are working to establish sustainability goals and targets, and we'll begin measuring our progress toward those goals. We're on a journey, and we know we've got a lot more work to do. Doing the right thing and being profitable are not at odds with each other. We focused our efforts where they matter most so we can continue to create sustainable value for our customers, investors, and stakeholders.
That's the background from me. I'll turn it over to Ben, and we can get into Q&A.
Thank you very much for that, Kent. I need to read this disclosure. Please refer to the event confirmation email, published research, or Baird's website for important disclosures regarding the companies discussed during the event. Maybe, Kent, could you just talk about your published targets or goals on sustainability, and then maybe the methodologies that, or Meredith too, the methodologies you use in establishing those goals.
Okay. I'm going to let Meredith go for that.
Okay. Yeah, as Kent was saying in his opening remarks, we set the baseline on our latest report, which we published, our sustainability report we published in August, and specifically with a focus on some of the environmental baseline data that we needed to do in terms of greenhouse gas, energy, and water, some of our primary factors. Next year, we will be publishing those targets that you're talking about, Ben. That'll be looking at balancing things like the growth that we have in our lithium business, which is obviously enabling green energy, but also has its own environmental footprint. Making sure that we're managing the intensity of that business, but all the businesses. It'll also look at water use, particularly in high-stress areas.
We'll be looking at other social factors like perhaps some inclusion and diversity targets, which have been really important with a lot of our investors and also something we've been talking about internally as well. That's all work that's underway now and will be published probably late spring, early summer next year.
Great. I think you guys were doing virtual meetings with clients in Europe over the past few days. Can you talk about how much this topic came up in those events and areas that investors focused on or have been focusing on from an ESG perspective?
I guess the theme of the conference was around ESG. It was fairly balanced between kind of ESG and general business performance and strategic things that we were talking about. Everything that you would, I guess, expect. Energy consumption, greenhouse gas emissions, water use, indigenous communities. I guess those were the biggest topics. Also the phase III impact of our products, because there is a big positive phase III impact, and there was some discussion around that because we've not reported on that yet.
Okay. Do you guys have a mission? Do you disclose your missions, or do you have a mechanism to do so, or what are your thoughts around that? Do you have a carbon policy? Do you think of that going forward?
I assume when you talk about emissions, you're probably talking about greenhouse gas emissions.
Yes.
Which we do disclose in our latest sustainability report, Scope 1 and Scope 2, and that's what Kent was saying, where Scope 3 is still in progress. I think given the footprint that we have, our biggest low-hanging fruit for improvement is going to be on Scope 1 and 2. Scope 3 is actually going to be perhaps a positive to the business because the end use of our products helps reduce greenhouse gas emissions. We do give greenhouse gas emissions, and then we can give other emissions as well. They're just not quite as meaningful for us as greenhouse gas.
We'll transition over to lithium, but how much of a pull factor from your customers is creating an ESG plan, and do your customers, specifically, actually across all three business units, is that something that they're asking from you to provide that information, or is this more corporate responsibility on why you're doing it?
It's both. Our customers, or probably more accurately, our customer's customers are starting to ask. The OEMs around, particularly in the lithium business, are pretty focused on it, particularly the European OEMs. They're very focused, and we've started spending more time with them. Historically, we've not spent that much time with the OEMs, but they're really just getting into that business and getting focused on it, particularly from a European perspective. We've spent time with all the major OEMs, and some have even been in country to tour some of the sites and help them get a better understanding of exactly how the lithium space works. I would say it applies across catalysts and Bromine as well, but not to the same extent.
Got it. All right, moving on to lithium. Could you talk to a little bit about the supply-demand environment? Then just weave in where you see channel inventories. If you could separate both hydroxide and carbonate as you do that.
Right. Okay. We had said in the last quarter call. This is a pretty opaque supply chain. When you talk about lithium all the way from the lithium that we make and ship, whether it sits in a cathode that's been made or sits in a battery that's already been made, there's not a lot of transparency among that. Our best guess was at the last quarterly call, we said there were about five months excess inventory in that system. We don't really think that's changed. It feels like it's improving, but we don't have enough data to actually say it's changed. We would still say it's five months.
Given the way volume is starting or sales are starting to ramp up on EVs, the incentives in Europe, and a lot of that is driven by European demand, it feels like it's getting better, but it's not really worked its way through the supply chain to us yet. We're sticking with the five months excess inventory that sits there, and that's across both carbonate and hydroxide. Probably more in carbonate than hydroxide for a couple of reasons. Demand for hydroxide is a little higher because the higher performance batteries require hydroxide, and also because there's a limited shelf life on hydroxide, so I think people are more careful in managing that.
Great. When we talk to investors about lithium, I think there's still a struggle about whether it's a commodity or a specialty chemical. Now, obviously, your margins point to the latter. Could you talk to maybe help us with that distinction and how you view lithium being from a commodity to a specialty chemical?
We view it more of a specialty chemical, and we're a specialty chemical company, so we approach it that way. Some of our competitors don't. They treat it more kind of like a resource play, maybe a commodity, if you will, but with a long-term contract approach that we've had. We innovate with our customers. We do a lot of work, technical work with our customers on existing chemistries, quality, crystal structures, but also future chemistry for the new batteries that are out there. We spend a lot of effort, and then we've built a diverse supply system with different resource bases in different countries, different geographies. We've tried to balance our geopolitical risk. We've got different molecules. We've got carbonate, and we have hydroxides are the two primary products into the electric vehicle battery market today.
We're trying to create a balanced supply chain between a product standpoint from a geopolitical risk, geographically, about how we supply that, which are all, I would say, characteristics of a specialty chemical market as opposed to just a commodity where you dig it out of the ground and ship it.
Let's get Tesla out of the way from the Battery Day. Could you talk about, because I'm sure you guys are tired of answering the questions, but could you talk about your high-level takeaways from that? Then weaving in your answer on the specialty side. There was some offtake with some smaller partners, and one of the things that I've always thought is that your scale is a benefit to you. Did that change with this announcement with the offtake with Piedmont? So high level, then maybe answer that question about them working with smaller players.
Right. Okay. I think the two big takeaways for me from the Tesla Battery Day were, one, that Tesla has aspirations that were greater than we had previously thought from a market perspective, and that the intensity of lithium and the technologies that they're looking at continues to increase. The technologies they're looking at, there was not anything in there that was a big surprise to us. Those are the things that we look at with Tesla, that we're doing chemistry research to facilitate those batteries and that technology, so there was no surprise there. The big takeaway to me was that the industry is becoming more lithium intense rather than less. Those were all positives from our standpoint. The cost reduction on the car and the penetration into the automotive market was a positive as well.
The negative is that Tesla intimated that they would get into the lithium business, and they have access to clays in Nevada, where they are looking at some technology to process that. That was a negative for us, but those were the two big takeaways. I think they're pretty early in looking at those clays in Nevada and that technology. We have access to those clays, and we've looked at them for a number of years, and we've never developed plans because our view is that they're uneconomical, at least given pricing today or how we forecast pricing, and the access to the other resources that we have. Your question about smaller players, we're the biggest player in the market or one of the biggest players in the market. We have a big share of Tesla's business, and we work pretty closely with them.
We have for a number of years. They're probably trying by doing agreements with smaller players, I think they're just trying to expand the pie a little bit. It was probably a little bit of an offset to us, and some of the other players. We didn't read anything too draconian into that.
This is a tough question, trying to get inside Elon Musk's head. With the market with this five months of inventory oversupply and then you have resources, why start trying to go up the cost curve and do this unproven extraction technology? Why do you think? Is that trying to expand the supply chain, or is it negotiations because you have contracts coming up, or what do you think?
Yeah. I don't know. I know given the growth curve that we have for the industry, the demand is pretty strong, and the supply-demand is, there's going to be a lot of investment in supply to keep up with that demand going forward. In his announcements or his targets on Battery Day, he kind of accelerated that curve. I think they need additional investment in the lithium space, and they're saying they're going to make some of it, and they're encouraging others to do more because I think everything they said was about more lithium intensity, not less. That's lithium per car, and then they've increased the number of vehicles and by reducing the cost of it. I think they're trying to encourage people to invest and that they're investing in their own right just to fill what they see as a gap.
Got it. I have a question from the audience. If Tesla builds their own conversion capacity, what does that do for the cost curve? They could buy spodumene at $350-$400. Why doesn't that compress the cost curve and apply $6,000-$7,000 carbonate prices?
Yeah. We don't believe they'll be able to get the spodumene at those prices. We think that's difficult. That's very difficult to do from the U.S.
Great. You idled some capacity. Could you talk about the plans there on the idle capacity and then how quickly you can bring that back on? Some of it's in North America, so does that make a difference for what Tesla's trying to do, and how are you looking at that capacity?
Yeah. The facilities we idled, one in North Carolina, one in Nevada, both in the U.S. They were our higher cost facilities, and we were just taking some capacity out of the market to balance the inventory that's building. It wasn't a dramatic amount, so it kind of relates to about 5,000 tons on an annual basis. For whatever period that's out there, it's not a big piece of the market, but it does allow us to manage inventories a little bit. We can bring that back pretty quickly. Our estimate was we'd bring that back around the beginning of the year, and we're assessing that. We may very well do it sooner, probably not later, but we're looking at that on a regular basis.
Can you talk a little bit about just your overall visibility in the lithium market and how you guys are approaching bringing on new supply, and where you're getting the information from and what the trigger for that is, and I think when you pull back on some of the projects, when do you see this inflection point occurring where we're going to clean up the oversupply in the inventories here?
Yeah, that's the magic question, is when that happens. We're very confident in our forecast longer term. Exactly how it ramps up in the near term is hard to predict. We have the two large projects, one at La Negra, one in Kemerton, the expansion projects, and we slowed those during the pandemic because, to be blunt, we were trying to just preserve cash because we didn't know what the pandemic was going to look like. We've now brought those back a little bit. We pushed them out probably six months from the schedule, and we probably tried to bring them back a month or two in doing that. Our plans are La Negra would come on the middle of next year.
From a commissioning perspective, probably by the time it's commissioned and product is qualified with our customers, you'll be at the end of the year, and Kemerton would be six months delayed to that. We look at the forecast for electric vehicles. We talk to our customers to try and triangulate to see if those are accurate, that the information we get on the ground ties with the forecast that we see. It's not something that you can predict month- to- month. Even a six-month forecast is difficult. Over the five-year period, we feel very confident in it. It's just a matter of exactly when that inflection point kicks. It feels like that's going to happen sometime next year, and it feels better, but we haven't seen the volume in the business yet, and I think that's because of the inventory that's in the supply chain.
Given the acceleration of electric vehicle sales in Europe, it feels like it has to come through sooner rather than later, but we just don't see it yet in our product sales.
I think that you guys were different in the sense of establishing long-term contracts for a good portion of your EV grade supply out there. What's the update there on just your approach to longer term contracts versus leaving some spot market? How should we expect to be updated? How are you going to update the market as you progress there?
Right. We're staying with the long-term contract approach, and it's a portfolio of contracts. I would say a few years ago when we first started doing that, it was a one-size-fits-all approach with a contract. We had a long-term contract, and we negotiated those with our customers, and they've served us well. What we've learned over the years is not every customer wants to contract exactly the same way. Some are more concerned about long-term supply, quality, innovation, new battery chemistry. Others really just want molecules.
We're going to try and contract with them more the way that they want to buy, but with a focus on the long-term contracts for those kind of what we would call value-added buyers, where they really want to make sure they've got security of supply, that we innovate with them and bring new chemistries to them for the new technologies they're looking at. Those will have more stable pricing, probably not fixed. It still moves with the market, but dampened significantly from the market movements. On the other end of that spectrum is probably people that are just more interested in supply in the short term, but at spec and at quality, and we'll contract with them on a shorter term basis, but make no long-term promises for volume.
We'll create a portfolio of a mixture, where we'll be skewed more toward the longer term contracts than short term, but we'll still have some of those short term contracts because those customers want to buy that way, and that we'd like to participate in the upside of the market when it swings.
I guess with the overall distress in the industry, could you talk about how other players are acting? Are people just selling at cost to keep operations running, or do you see pockets of people being more rational outside of what you guys have done?
I think the major players in the industry, everyone's kind of reverting to type. Maybe they were always at type, it really shows up in a crisis. Some of the larger players with low cost position are just pushing their volume into the market, and they've driven the spot price down, but they're gaining share and driving the higher cost players out. I would say some of the Chinese players, Tianqi, as an example, I think they're just trying to survive. I think the low prices in the China market are really causing them cash flow issues, and we know they have a large debt payment that's coming due, and they're just trying to manage through that. I think most people are just reverting to type, and we're doing the same thing. We're pushing on the long-term contracts.
We negotiate with our customers, and we're holding those contracts. Probably shouldn't be a surprise, but everyone's kind of doing what their personality says.
We have a good one from the audience here. Could you remind us the interests of the Chilean, and then I guess secondarily, the Argentinian government? Are they price or volume incented? Do they want to go production or limit to ensure higher prices? What are their environmental concerns and limits?
Okay. In Chile, it's volume and price. As prices move up, they share in more of a piece of the revenue, right? They're incented for a combination of price and volume, I would say, as opposed to one or the other. Price is definitely a part of it. As prices go higher, they get a little higher. They get more revenue as part of that. From an environmental standpoint, in Chile, it's mostly about water. It's about the pumping rights that we have and making sure we have a very sophisticated monitoring system in the salar, so both us and anyone who pumps out of the salar. We monitor the levels and the rates and any impact on the salar itself from a water perspective, and wildlife. We've got pretty sophisticated programs around all of that.
I would say the biggest concern in Chile is around water.
Is it similar in Argentina? How you're incented?
Well, we're not operating in Argentina. We have rights, but we're not operating.
Yeah. It's much more regionalized in Argentina. They're working on it, but they don't yet have a national policy like Chile has. I think they're more volume-oriented than they are price-oriented right now.
I remember there was potentially more concessions in Chile. Where do we stand on that, them expanding production to other folks out there?
I'm not sure. Yeah. They haven't really pulled the trigger on any of those yet. They keep talking about it, and the reserves are there, but they really haven't pulled the trigger on them yet. It's kind of interesting. I think the competition between Australia and Chile is an interesting one, because Chile's got quite a bit of reserve. They haven't really fully utilized it yet.
There's a question from the audience. Why do you say the auto industry is becoming more lithium-intensive?
Well, I was referencing the comments from Battery Day with Tesla. The comments that Elon Musk made around the new technology and the direction it was going is using more lithium in a battery for each car as opposed to less.
Just along those lines, it comes up quite a bit, the movement to solid state over whatever the next 10 years. Could you talk about the impact on lithium demand on that?
Yeah. That would be a positive for lithium. It would be in different forms. That would be lithium metal if we made it. Ultimately, it would be a much bigger demand on lithium metal, which we manufacture today, but in much smaller volume. We would have to ramp up manufacturing. The same resources that we use today would go to feed that, but it would be a different conversion asset that would be required. We would have to add capacity for that, and the industry would have to add capacity for that. I think that's probably a journey.
Some of the things that Tesla talked about kind of move a little bit toward solid state, but that's still a number of years away. There's still a lot of technical improvements that have to be made before we're at a solid state battery or lithium metal battery.
Another question from the audience. Your hydroxide strategy, any thoughts to rethink it versus Western Australia versus building in the U.S.?
Yeah. That's interesting. The resources in Australia are higher quality than what's in the U.S. I know that there is pressure to develop U.S. sourcing, and we have assets in Kings Mountain that has. It's a good resource. It's pretty expensive to mine and manufacture that in the U.S., so we would have to assess that. Right at the moment, we're adding hydroxide capacity in Australia. The next tranche would probably be in China, and then at the same time, we'll be looking at the U.S. to see if that makes sense for us.
Great. Then how will we get out of the lithium oversupply situation that Chile has a lot of reserves that haven't been tapped into?
Yeah. There are additional reserves there, but you need to be able to access those to process them and then have a conversion asset to do that. To take advantage of that is a pretty long lead time to get through that. If you're doing it through existing players, SQM and Albemarle in Chile and in the same salar, you could probably do that in five to seven years. If it was a new player, it'd probably be 10- 15.
I would just add that those other reserves tend to be smaller.
Yeah.
Less from a quality perspective. There is a cost implication to developing those reserves ultimately as well. Whatever environmental challenges they may have to run into as well.
Okay. Let's just switch gears here and move on to Bromine, and then we can circle back with any audience questions on Lithium. Could you give us an update just on supply/demand situation? I think that there's been some commentary out there that Bromine has been better than originally thought. Could you talk about what's driving that?
Yeah. Bromine, the market has bounced back better than we had anticipated from the pandemic. We still have issues, but it did bounce back, kind of a V-shaped recovery, if you will. Both volume and price have come back. It's performed better than we had expected. That's really, if you look at the underlying markets that drive our products, that's around construction and electronics. Whether it's consumer or industrial, those markets have been pretty strong, and that's probably been the driver for that. The one market where bromine plays that's a big negative has been completion fluids for oil wells. Offshore deep water oil wells. That is down, but that's a small part of our portfolio, maybe 10% or a little bit less. That part is down, but construction and electronics have been strong. That's been driving the growth or the recovery.
Is there new capacity coming on, or has it already come on? I thought that ICL was bringing on some. Where does that stand? Just circling back to the completion fluid. If I remember correctly, there's a lag period. Does that mostly hit into 2021? Is that when we should start thinking about that hitting the Bromine business?
Well, the lag is, by definition, completion fluids, they're using them when they're completing a well at the end. When the pandemic hit, if they were almost through with a project, they would go ahead and complete it. It probably didn't start hitting us until now or maybe part of the last quarter. That'll probably be a little drag until we annualize on that. Again, it's a small part of the business that's been offset by the strength in construction and electronics market. From a capacity standpoint, there was some additional capacity brought in, but it's been kind of built into the market now. It's there, and prices haven't been impacted, and volumes are pretty strong. I think they're being brought on and kind of fed into the market and probably in segments where we don't participate as much.
Because we haven't seen-
Anything on the horizon that we should be aware of? I know it comes up now and then about just whether it's environmental impact or impact on us as humans of Bromine as an element. Anything new there that we should watch out for of changes?
No, I don't think so. There's regulation around that, but mostly where the regulation is focused are in markets where we don't play. In fire retardants around furniture or clothing, we don't play in those markets, and that's where most of the regulation has been. There is some attention around it in other markets, and we continue to watch that, but we don't think it changes the profile of our business.
Moving on to Catalyst. Can you just talk a little bit about that? I think there's been an uptick in, obviously, off the loads of miles driven, but what are you seeing from your refinery customers?
Yeah. The catalyst business was impacted the most through this pandemic. Our catalysts go into oil refining and conversion to the products that they make. We facilitate that. It was impacted dramatically by oil demand and probably half of our business, the FCC catalyst, is kind of directly related to miles driven. That was down dramatically and is coming back. Refinery utilization is still low globally, probably around 75%, and they really kind of start making money or like to operate around 90%. Our products are used where we're trying to optimize the mix of product slate for them so they can be the most profitable. They're more concerned now just about cutting costs and not so much about optimizing their business.
I think when that stabilizes and comes back to higher utilization rate, we'll go back to that normal operation. I mean, our business is, you see the numbers, how far that's down. It's coming back, it's slow. We probably don't expect to get back to 2019 volumes until the end of next year.
Got it. Just real quickly, it comes up quite a bit, this renewable diesel and RFS, Renewable Fuel Standard markets. Is there anything that you're seeing there? I see some refiners converting or talking about converting over to renewable diesel. Is that hitting your radar screen at all?
I don't think so. I haven't seen anything that's driving that. Especially in this environment, like I said, they're very cost focused at the moment and just looking to generate cash.
Got it. Just moving on to the balance sheet. You have some, I think, a term loan coming up in 2021 and some bonds coming in 2021. Maybe, Scott, could you talk to the plans around that?
Sure. Yeah. We're actively looking at what our options are there. Frankly, the markets are strong. The bank support is very strong. We've got a lot of different options that we could go there. We'd expect in the coming months here to be able to act on that. At this point, we're really trying to compare the benefit of going out into the bond market, given how strong it is right now, to just using bank loans for flexibility purposes. That's where the analysis is focused right now. Like I said, we've got all options available to us. In addition, we've got, as you probably know, we've been carrying around $700 million of cash through the crisis.
I think as we get more comfortable with the 2021 outlook, we could start to utilize that and bring that back down into the more normal range from an operating perspective that we would expect to be in the $250 million-$300 million range.
Got it. A question from the audience earlier that I wanted to tie in kind of on capital allocation is your partner at Greenbushes, for the audience, Tianqi, there was reports of be selling their stake or in some financial trouble. Are you still in the running for that? I guess is the first question, and then I have a follow-up.
Yeah. It's a question whether they want to sell that asset or not and how. We know that they are in financial straits. They have a large debt that is due in late November, and we don't see how they will pay that, but we kind of suspect that they'll renegotiate that and probably extend some terms on that. We would be in the running, and we have certain contractual rights to it. If they were looking to sell that asset, we would definitely be in the mix.
I guess as you look at the overall market and the three business units, is M&A or are acquisitions still on the table, and where are you looking mostly in what segment?
I would say, we would be balancing an acquisition opportunity versus the growth opportunity we have in lithium to invest and capture growth there. We'd be pretty focused on that because we think that's a good opportunity, and there's no integration associated with it. Where we'd be looking to do acquisitions would not be on an enterprise basis, but on doing conversion assets, lithium conversion assets in China if we felt like that was attractive to us on a make versus buy analysis, versus actually building new capacity anywhere in the world, but particularly China.
I think at the Analyst Day, you talked about free cash flow generation in 2021. I know that the whole world's changed since then. Could you talk to us about kind of the puts and takes, how we should think about that going forward?
Yeah. You're right, Ben. We did put the stake in the ground in December around going free cash flow positive in 2021. Of course, with the COVID crisis, we did decide to slow down the La Negra Project and the Kemerton Project to reduce our capital spend in 2020. This year, by about $150 million. Effectively, that's being pushed into next year. I would say, the combination of the EBITDA as well as that CapEx push likely means that free cash flow positive stake gets pushed out a year. We're still going through that analysis with our operating plan right now to make the decisions. I think, it's hard to overcome that extra spend as of this point.
Got it. Maybe along those lines, Scott, would you talk about the operational efficiency programs and remind us kind of the numbers that you put out there and where you stand on that and if there's more to do?
We have a program we're calling Pivot 2020, where we put a $100 million sustainable cost-saving target out there by the end of next year. We think we're on track for that. Once we complete that and make sure that's secure, we're working on a new program that's kind of focused around operational discipline that is the next level of cost savings. I would say that program around Pivot 2020 was kind of the low-hanging fruit. The next round will be a little more difficult to get, but be more focused on traditional manufacturing excellence, being leaner, getting additional capacity out of our facilities, driving cost out of the business on a productivity basis, a leaner back office. All those things that are probably a little harder to get at, but are kind of the cornerstones of an efficient business.
Great. The last one, just from a portfolio perspective. In the past, I think that maybe the thought was that eventually, the cash flow from bromine and catalysts wouldn't be needed to support lithium as much and the growth that it could stand alone. Is that still something that you think about down the road of having the best lithium business out there as kind of a standalone and having optionality with those two businesses? If not, then what are the kind of impediments that keep that from a sale of bromine or catalysts?
I think the near-term strategy is that we're funding the lithium growth with cash flows from the entire business, so all three businesses. Once we get to where we're generating more cash than we know what to do with from lithium, we'll have other options, and we'll look at that at that time. I'm looking forward to that day. We'll wait and see where we are once we get there.
All right. Well, thank you all for joining us, and thanks for your time today, and thanks everyone. If you need anything, just follow up with me and happy to send over a model or answer any questions you have. Thanks, Kent. Thanks, Scott. Thanks, Meredith.
Thanks, Ben. Appreciate it. Thank you.
Bye, y'all.
Bye-bye.