Good morning, everyone, welcome to Avient's 2021 Investor Day. I can't tell you how excited I am to see so many of you in person here today. I think we all can agree that it's been way too long since we've been able to get together for events like this. Really appreciate everyone making it out here today. Of course, I always also want to welcome those joining us virtually this morning. Regardless of how you elected to participate, we worked really hard to ensure that each experience is going to capture our unique story and the tremendous opportunity that we have here ahead of us. It's hard to believe it's only been three years since our last Investor Day when you think about how much things have changed. We completed the most significant transformational steps in the company's history.
Divested the PP&S business, acquired the Clariant Colors business, we rebranded the company with a new name. When you think back to that 2018 Investor Day, if you recall our strategy to invest in commercial resources to drive organic revenue growth and our M&A strategy to invest in different areas of our portfolio, like our composites platform. Today you're going to hear about those investments and how they've contributed to our recent success. Today's Investor Day is not just about looking back, it's about looking forward, you're going to gain valuable insights into the mega trends that will support our future growth. We're going to go deep in areas like sustainable solutions, composites, and our presence in emerging regions like Asia and Latin America. You're also going to get an opportunity to hear the unique perspectives from many of our company's leaders.
Following each presenter, there'll be a Q&A session. For those of you in the room, we'll have microphones so that you can ask your question. For those of you online, you can type your question into the chat box, then we'll read them aloud here in the room so everyone can hear. Of course, before we can officially kick things off, I have to remind everyone that we'll be making forward-looking statements and using non-GAAP measures. Please refer to the disclaimer on forward-looking statements and the reconciliations of non-GAAP measures, both of which are included in our presentation, which was made available on the website this morning. With that, let's get this started.
Good morning. As Joe already said, I'd like to extend a warm welcome to all of you. We do appreciate your attendance at our Investor Day. If you're here in person or if you are participating virtually via webcast, either way, it's great to be here and be able to share our story with you today. A special shout-out to our front row attendee, Carol. I love you, ma'am. Thank you. I am Bob Patterson, Chairman and CEO for Avient Corporation, I joined the company in 2008, what was then called PolyOne. I was Chief Financial Officer for four years, Chief Operating Officer for two, and I've been CEO since 2014. When I joined PolyOne, at the time, it was going through the very early innings of a pretty massive cultural and portfolio transformation.
It's really hard to believe how much has changed since I was able to buy 100,000 shares at $1.66, right? These things are pretty hard to believe. The transformation is one that we're incredibly proud of. In the next few slides, I know to some of you are going to look like oldies. Okay. I like to think of them as goldies, and I think it does help to reflect on the past just a little bit to help better appreciate where we are and how that sets the foundation for where we want to go next. In the context of that transformation, let's first take a look at our end markets. If you went back to 2005, 2006, you would see that the preponderance of our revenue was in housing, auto, heavy industry, and almost entirely in the U.S.
What you can't necessarily see from this slide is our culture. We were way too commoditized. Candidly, we used to say we're volume-loving, pound-hugging pellet junkies back then, right? We didn't make any money doing what we were. Fast-forward to 2021, the end markets have changed dramatically, right? It's night and day when you look at how half of our revenues now come from consumer, packaging, and healthcare. Our mix has improved. Far from commodity than we were in 2006 and way much more towards specialty. The other aspect of our transformation is that we are now truly a global company. As we approach $5 billion in revenue, record levels of adjusted EBITDA and EPS, we serve every major brand owner and just about every major multinational OEM, literally thousands of other customers in just about every geography around the world.
We do so with, as I said, an improving mix of business. I know this is a slide you've probably seen just about every time we get up and present, it really does help to articulate how far we've come on this volume to value journey of ours. As our mix has improved, as our end markets have improved, so have our margins. Again, this falls into the hard-to-believe category, man, Color and EM used to make 2% return on sales, right? Now we're at 17 or better. Part of what we want to share with you today are the expectations that we have for margins for each of these segments, where they can go, and how we plan to get there.
Before we get to the forward-looking part of our presentation, let me just pause to reiterate a really important aspect, which is that we are a formulator, right? We're not a chemical company. We're not a base resin manufacturer. Many of them are suppliers to us. We have a sweet spot, which is really putting colorants, additives, modifiers, and reinforcements together to create custom niche applications for our customers. We have 100 polymer scientists, PhDs on staff, 1,000 associates in technology roles, all dedicated and obsessed with solving our customers' toughest challenges. The questions that we get all the time are. How do I make my product stronger? How do I make my product lighter? How about lighter and stronger? How do we advance shelf life with additives or improve shelf appeal with colorants? We get these questions all the time from our customers.
Today, we get all those questions and one more, and that last question is always, how do I do all those things and make my product more sustainable? For us, we're so proud of the fact that we've invested heavily in a sustainable solutions portfolio. It's been the fastest-growing part of the business over this time horizon, very much focused on lightweighting. When I say lightweighting, oftentimes you think transportation, and that's true, but lightweighting also has a very important role in packaging. It also includes using more eco-conscious materials or helping our customers use more recycled content or simply to make their materials more easily recyclable. This is one of the single biggest megatrends that we have to take advantage of in this company and will be one of the four growth areas that Joe mentioned that we'll spend more time talking about today.
When you add the growth from sustainable solutions to what we've done in healthcare, composites, growth outside the U.S., we're having a record year. At $3 per share, we're in uncharted territory. This is a great chart that we're very proud of when you look at our EPS trajectory over the last decade. I think if you went back to March of 2020, I doubt that there would be a lot of people who would believe that we would be standing here today, sharing these kind of numbers with you. Of course, if you think back to that time, the world was gripped by fear of COVID, really, right? With businesses shutting down, people were sheltering in place, and maybe the highest level of fear was around our own health and safety.
Investor sentiment was incredibly negative on stocks in general, for as negative as sentiment was about the economy and business in general, it was even more negative about us. It really was a result of the Clariant acquisition, which we had announced in December of 2019 but had not yet closed. I think there was a lot of investor fear that the business or perhaps that we overpaid for the business, perhaps it would be impaired, as a result of the pandemic, or that otherwise we wouldn't be able to complete financing and so on. I'm so glad that we had time on our side then, that we stayed calm, we moved ahead, and we got the deal done on July 1st and became Avient, which has been literally two of the best things that we have ever done in this company's history.
Financially, the numbers for Clariant speak for themselves. I'd ask you to just take a quick look at the chart here. We acquired just a little over $130 million of EBITDA from Clariant. In 2021, which is our first full year of ownership, we're adding $205 million. That's a 54% increase from what we acquired. Margins have expanded over 400 basis points. When you look at this purchase price multiple, and you compare that to what companies are paying for deals today, it looks like we got this at a bake sale, right? It's really been an unbelievable acquisition for us. It's been outstanding. I look back over this last year and say, this isn't a business that had to worry about surviving the pandemic. It's a business that thrived.
It's all about those end markets, again, if you go back to my very first slide, right? With a great presence in consumer, packaging, and healthcare. We wouldn't be able to share this kind of success with you if it wasn't for the culture of our organization. I firmly believe culture is everything, and it is the biggest reason behind why these two companies have come together and been successful. When I took over as CEO in 2014, I said, "It's not enough to be a high-performing company. We also have to be a Great Place to Work." I will admit, at the time, I didn't know exactly what that meant or how we were going to get there. We started engaging with our associates, conducting surveys, and learning what it was that we needed to do to bridge that gap.
In 2018, we did get our first Great Place to Work certification in the U.S. We're standing at the end of 2020, and now we're about to conduct our first global survey inclusive of all of the Clariant associates. The Great Place to Work Institute would tell you that when companies do major acquisitions, they almost always see their engagement survey scores go down in the first year, but not ours. Ours went up. I think that says everything about the quality of the acquisition, but how we also handled integration. Look, you don't have to take my word for it. Norbert Merklein is here today, and he'll be one of the first people that you hear from my management team. Norbert joined us from Clariant and now runs the European Color Solid business.
He's going to talk to you about his own perspective on how well integration is going, what it means and feels like as a Clariant associate to be part of Avient. I look back on the integration and think, in some ways, we just kept things very simple. We had three priorities. They were safety first, take care of our employees, and take care of and retain our customers. If we do those three things, and we capture the value, we always knew we'd look back on our first year as a wild success, and it has been that and more. Lastly, I would tell you that the name change had a way bigger impact than people probably appreciate.
When we first announced that we were changing the name to Avient, by the way, long A, Avient, that may have been met with a little bit of skepticism or maybe just thinking this was marketing or otherwise. Changing the name to Avient, for me, meant something really important to the integration because if you think about the fact that Clariant and legacy PolyOne had been competitors forever, right? We were number one and number two, respectively, in this space. What would it mean for a Clariant associate to now have to be at PolyOne? Fortunately, we were great competitors, competed in all the right ways around technology, service, and innovation. Nevertheless, right, becoming part of the person you've been competing with forever is a big change.
Changing our name to Avient was a great way to actually galvanize the organization around this idea that bringing two world leaders together, or by doing that, we could create something even better. The message that we sent to Clariant is, you are now home. You're part of this family, and it's got a new name. We move forward together with this new mission of ours. The numbers speak for themselves. We're off to a great start with the integration, as I said, you're going to hear from Norbert in a few minutes, which is actually one of, I think, the best parts about this Investor Day is that you get to hear from somebody other than me.
In addition to me, we've got a number of other folks from my team, and the areas of focus are going to be those that Joe lined out earlier. You've all seen this slide before with respect to where we believe growth is going to come from, the key mega trends that we have available to us to capitalize on, and you're going to hear about each one of these in depth with some external factors that are driving this, our own historic growth rates, and what we're doing to invest in innovation to capture this growth. You'll also hear about what we believe to be the bottom line implications for growing sales at 6.5% per year and how we put that cash to work.
Ultimately, if we deliver on these plans, we will be viewed as a formulator, and most importantly, we'll be valued as a formulator. Thank you very much for being here today. As Joe said, as each one of our presenters comes up, you're welcome to ask some questions. To the extent that we don't get to all of them, after each one of their reviews, I'll be back up on stage at the end to hopefully answer any remaining questions that we might have. Thank you.
Good morning. It's my great pleasure to continue today's program with the exciting storyline around merging the two leading global Color and Additives businesses into one and capturing all the benefits and the synergies which arise when bringing two such businesses together. The PolyOne and the Clariant Color and Additives business, now Avient Color and Additives Solutions. I am Norbert Merklein, Vice President and General Manager of our business in Europe, the Middle East, and Africa. I joined Avient on July 1, 2020, the first day of the new company, together with 3,500 colleagues around the world from Clariant. From Clariant, where I've been working over 35 years in the specialty chemicals industry in various positions in different regions.
In that, being involved in the integration work from day one, aiming to fulfill our vision for this joint global business better together. Better together, that's the theme we have chosen to describe our vision and the ambitions we have around bringing these two businesses into one. Actually creating a market leader who can generate value for our customers and for Avient and its investors. Let's have a brief look back over the last 18 months since we brought these two businesses together. Why is it such an excellent fit? Why does it generate all the synergies and the value we want to capture? First of all, because we created a true global leader. A true global leader with a complementary geographical footprint, often compensating gaps in market presence on the other side.
With that, being able to supply all our global, regional, and the numerous local customers, often from sales offices or decentral technical service points. We've put together the two leading industry technology platforms with the most focus on sustainability, on technology, on new technologies around the mega trends of today, bringing together the people from both organizations, often with decades of experience. This all sets the base and wants to set the base for our talent retention for the creation of a right platform in which people feel well and are prepared and want to drive this business forward into the future. This all is creating synergies, cost synergies and cost benefits, but also synergies on the revenue side. Bob has already alluded onto that a little bit, and I will go back to that somewhen later in the presentation.
As I said already before, it's about a global footprint of sites. Almost 50 sites around the world, often working in a network structure in the individual regions, trying to service our customers with a high level of supply reliability and, of course, the quality they expect. PolyOne on its own has been a nation much easier. Let's talk about the integration once more. Bob already has mentioned the key focus points which we will or which we do address every day in this integration process. I'd like to share with you the integration triangle, which we have defined being at the top of mind for all of our people, being the guiding principle in synergies.
We've calculated a number of $85 million, which is lifted up from earlier statements, simply because in the course of the integration process, we realized that there is so much we can do and so much able to service our customers, in a very strong and fast way as they expected from a market leader. There's two more points I'd like to mention. The first one is around the healthcare solutions. You will also hear later more about healthcare and the focus on healthcare in Avient. It's actually a tremendous opportunity when we combine the Clariant Color and additives healthcare focus with the opportunities and the focus PolyOne brought along in the healthcare sector around the distribution business, but also in SEM.
In both businesses, speaking and working with the healthcare industry in an intense way and adding a lot of these Clariant concepts does now actually generate new opportunities and strengthen customer relationship in an impressive way. It's also about cross-selling. It's amazing how fast we've opened some doors for some opportunities, often leading to some hundreds of thousands of business top-line opportunities by simply adding customer relationship and network between businesses like the SEM business and the color business. That has created a lot of nice examples of revenue synergies, and that's just the beginning, because we are only analyzing all these customer relationship and only speak to customers now about the new company and the benefits this new company can bring to the market.
Talking about customer experience, we would like to share with you a few more examples also how customers perceive Avient and the new Color and Additives Avient business in the market. What is the value proposition we can bring? How do customers see us, and what do we actually feel Avient is now being able to do different than the two legacy companies have been doing that in the past? To give you the first example, I'd like to introduce to you my colleague, Stephanie Dycha. Stephanie is actually heading the ColorWorks facility here in the U.S., in West Chicago. The ColorWorks facility is one of four regional centers we do in marketing color to the industry. It's not just a sales approach on color or doing some formulations. It is a real concept, a concept to bring color and aesthetics to the market.
That's what we want to explain to you a little bit more in detail. Stephanie is doing this by taking us into her workspace, into the ColorWorks center, into the facility in West Chicago. We'll have prepared a video for you, and I'm sure you will enjoy that. Of course, Stephanie will be prepared also to take your questions later on.
Welcome to ColorWorks. Come on in. My name is Stephanie Dycha. I'm the ColorWorks manager here at Avient ColorWorks U.S. Canada in West Chicago, Illinois. I've been with Avient for six years and celebrating my 19th year in the industry, where I've had a focus on branding and commercialization of circular design product. The Avient ColorWorks network is the perfect marriage between design and technology. We have four strategically located centers in Merate, Italy, São Paulo, Brazil, Singapore, and West Chicago, where I am today. This facility sits on the second floor of our 125,000 sq ft manufacturing facility. Once you arrive at ColorWorks, you are transported into the heart of creative design and innovation at its best. Clean lines and an open environment is meant to enhance our customer experience. Here at ColorWorks, we focus on three main principles: inspiration, innovation, and co-creation.
We blend those principles with our deep, vast knowledge of sustainable design, and we're able to give our customers a unique and unprecedented experience. They can arrive with a vision and leave with a viable product ready for commercialization, all in a single day. We start first with inspiration. Consumer, societal, and market trending isn't something that you would normally think of when you're thinking plastic colorant and additive manufacturing. It is the catalyst for the work that we do here at ColorWorks. Our research gives us direction, purpose, and focus for our innovation, and it allows us to anticipate what customers are going to be thinking three, five, or even 10 years in the future. We then use that knowledge to assist and counsel our customers and become a valuable, trusted resource, which elevates the conversation to no longer simply be about dollars and cents.
Our most popular form of trending is our ColorForward trend presentation. This is a marketing presentation that is meant to open doors and is a macro look at the world of color, materials, and finishes for the plastics industry. It isn't necessarily choose this color. It's meant to inspire and captivate the audience, open doors for our sales team, and be a dynamic and fresh take on the global world of color. We have one of these presentations in the breakout area, and I would encourage you to experience the manifestation of the future trends for yourself. Like this chip, called Local Pride from our ColorForward 2022 presentation. It is including our laser marking additive technology, and it is permanently marked with an active QR code leading you to our ColorWorks website. Moving forward, we take that market intelligence, and we partner with our vendors.
Building these relationships with our vendors enables us to get access to new materials first. Having this access and integrating that into our design enables us to drive trends rather than follow them and solidifies our position as experts in the future of our field. In addition to the research and innovation work we do, we specialize in circular design by embracing and understanding the end of life of our customer's product and how to design sustainability into the product during the conception phase. ColorWorks West Chicago completed 1,396 color designs in 2020. 37% of that work was done utilizing post-consumer regrind.
In our co-creation process, we are able to utilize the over 20 custom molds that we have in three different processes in order to help the conversation from conception to commercialization happen faster and more efficiently, improving our accuracy of the designs and helping our customers to reach the maximum level of sustainability while maintaining their brand identity. With this co-creation technique, we can complete a process that usually takes from six weeks to six months in as little as six hours, and sometimes even less. That is because the key decision-makers are able to discuss their visions directly with specially trained lab personnel who have extensive experience in color and additives formulation. That, combined with our ability to make iterations in 30 minutes or less, is a true game changer to the color design process. Thank you, Phil.
Building these close relationships with decision-makers helps us increase not only our success rate, but our margins as well. This is our light booth room, where designers and marketers from major key accounts make their on-site color decisions. Customized with three different light sources, cool white fluorescent, incandescent, and daylight, as well as shelving units to mimic store shelves, and an overall space design for the most accurate and efficient color evaluation and approval. In one of our greatest success stories, we were able to complete 52 color designs in two and a half days and received 47 approvals before they left. Prior to COVID, we hosted over 100 customer visits a year, and that's where this space is at its best. When customers are here, they take it over and make it their own. Some stay just a few hours, while others need to stay days or even weeks.
It's really up to them, their project, what they're looking to achieve, and the timeframe they need to achieve it in. While customers are here, it's not only about the efficient work being done. We have over 60,000 different parts for customers to gain inspiration, direction, and education for the work they will do in the future. Sometimes customers arrive with just one project and end up doing the design work for many projects to come in the future, leveraging our relationship to drive new business opportunities. Our ColorWorks design centers bring to life the symphony of design where pigment meets polymer. They allow for an immersive experience, bringing opacity, effect, and tactility into the conversation and the color design process. Thank you so much for joining us on this immersive experience here at ColorWorks U.S. and Canada.
We hope to see you at one of our global centers very soon.
Thank you very much, Stephanie. She's here with us today, please do not hesitate to get back to her in the break or at lunchtime to get some more exciting insight of how we run ColorWorks, not only here in North America, but actually around the globe. You'll find a number of nice exhibits outside, which are the product of this excellent cooperation work with customers. Now, let's just have a quick look to two more examples of how we drive customer experience and how we want to partner with the industry and our customers much more in detail in the future. The first one is also around color. It's about our InstaColor concept, the InstaColor customer-focused color formulation. InstaColor is a digital tool providing fast, easy, simple, and cost-efficient processes to bring color to the market and to bring color to our customers.
When you look into the legacies, PolyOne and Clariant, there are 10,000s of color formulations in our libraries, in our labs around the world. Rather than reformulating a color formulation every time again, InstaColor ties back to the libraries and the formulations we have in our systems to make it easy for any customer to get a color formulation right on the spot based on the huge experience and the libraries we have in our technical centers around the world. It actually serves three purposes. The first one is speed. Any color request from a customer can be formulated literally within seconds and typically provides an excellent and 100% match to what the customer really needs.
Of course, second point, it also is a much more cost-efficient way of bringing color to the market, as we don't have to go through lots of cycles of color formulation development in our labs. As a third point, it does, in selected markets, also give us the opportunity to match color on the spot in the customer premises with some portable color reading devices in which we actually, on any color request the customer has, are able to give a color formulation, to give a commercial offer, to give various options on quality levels, and to basically respond to a color request the customer has immediately. Typically, on the next day, the sample and some visual chips arrive, and we can already produce production. That's fast, that's easy, that's reliable, that's digital.
A great progress in our color marketing and an excellent tool which we will use around the world in the next few years. The second example I'd like to share is CycleWorks. I don't have to tell you the importance and the dynamics in the recycling and plastic waste discussion. We'll actually get to that point much more in detail later on, and what Avient and Color and Additives can do in this market. I'd just like to highlight one point in connection to our customers and the experience our customers can take when working with Avient, and that is CycleWorks, which is actually a mini recycling plant we have built in our own premises in Italy, in which we can replicate all the processes customers have and all the technical questions around individual solutions customers have in a mini recycling plant.
This means we take the recycling, collected material, we bring it through the different loops, and we actually formulate and suggest what customers need in order to master the challenges from the recycling processes and recycling requirements customers have to formulate their products. It's an excellent facility, just opened half a year ago. It does give us an insight into the recycling work, which is tremendous. It's unmatched. To our knowledge, no competitor actually has invested into such a facility to really give the right response, short-term and fast to the industry on this tremendous trend on recycled formulations. That's what I wanted to share around the customer experience. Let me just close with one more comment. The Clariant business has been a very traditional color and additives business in Clariant for decades.
It's been well linked into the specialty chemicals focus Clariant has in regard to the pigment production, additive production, dyes production. It became clear over years that there is no right strategic fit anymore for this Color, Additives & Inks business. As the more it's been amazing to see how also our people feed back to us talking about how they have arrived in Avient, that they now feel there is a strategic focus again on this business. This business is core again. We are growing. We want to grow. We want to invest into this business. Many people, meanwhile, clearly say this business found home again. That's one of the most refreshing statements I got from my colleagues going through this integration process and being here with you after almost 18 months since we came together. Thanks a lot for your attention today.
I'm happy to take further questions now or later in the break, and thank you for your attention.
Mike Sison, Wells Fargo. I've got 40 questions. No, I'm joking. I guess two questions. When your margins were a lot lower at Clariant, what did PolyOne or Bob and his team give you guys and enable to improve those margins so significantly in a short period of time? Then number 2, you talked about market share. What is the market share that you think combined you have, and is there a big runway to gain a lot more share down the road?
Yeah. I'll start with the second question because that's really a fantastic question to describe once again how we do see our future in the industry. Of course, we've brought together the two market leaders. We shouldn't forget there is a huge space out there which neither Clariant nor PolyOne have been covered in the past. Together, we probably do not see, and it depends on the industry and on the region and on this relevant space. Together, we would not probably see ourselves in a position with more than 20%-25% of market share. That means we leave at least 75% of market share out there, which offers tremendous growth. That's why we are not worried that we actually will not be able to find spaces for growth. Now, what have we done?
We've, of course, looked at the structures, and we've worked around synergies. Of course, when you bring these two businesses together, you have the chance to look into administration synergies, purchasing synergies, things like that, which add to our margin. That has helped and worked out very well from the beginning, from day one. I think we've also done a lot of things right during the pandemic. I think we've been able to respond to customers, even in times of supply chain turbulences, in the proper service and service level. Actually, the pandemic has probably, in a way, if you want to say, helped us because customers felt like being well treated and well looked after in difficult times with these two companies.
I think we have demonstrated that we have not just given a focus internally on our integration work, which, of course, is important for us, but we didn't have our customers feeling that we are just occupied with ourselves. Thank you very much.
One more question over here.
The light is so strong I can hardly see your hands rising.
Yes. Hi, Frank Mitsch, Fermium Research, Mr. Sisson, that topic was addressed last night at dinner, if you would have showed up. You would've learned that. Really impressive. Really impressive profit growth over this past year. What can investors expect in the future?
Well, I tried to outline that we are only at the beginning. We put these technology platforms together, which, of course, does not result in new products within a week. Our technology teams work hard every day, I think Bob made that comment, getting all the solutions around certain challenges from the industries, but being able to do that much faster now with the experience from both legacies. We actually put these pieces of puzzle together every day further and further, and I think that will set the base for growth, and I would almost say that's only beginning right now. Yeah. The other thing is that in our regional networks of sites, I think we've now started to put things and processes much more together, talking about raw material selection, learning from experience from the past.
There are so many topics our experts, our people, bring to the table every day and just start working on it, that we're very confident that this will open so many doors also in the future. We will have so many ideas people bring to the table, which we'll benefit off in the next few years. That's where we get the confidence from, that this is not just a stable business we can drive forward, but actually will offer growth opportunities.
If I could, I'll just add maybe one other item to this. As part of the integration, when you put one and two together, you're always going to be sensitive about pricing and the customer relationships. I think Norbert made a great point about how in some ways the pandemic probably helped us. I believe that we have gained share as a result of size, scale, as a result of being able to move things quickly from one plant to another. Historically, if you went to a customer and said, "Hey, I really want to start making your product out of a new plant," they'd go, "Oh, I don't know. We got to qualify and this kind of stuff." In a pandemic, it was like, "Yeah, wherever." You know what I mean?
We just got to get this stuff, not a problem." Secondly, on the pricing, all that happened way faster than I would've ever expected. At the very beginning of that, when you put these two companies like that together. Inflation, supply chain challenges, have just driven us to move quickly. I think that's one of the reasons that we've been able to move forward, on margins. In terms of where we get to, Frank, there is a slide later in the deck. You probably already flipped towards it, and you found what our margin goals are. We will get there, and we'll give you a bridge and a walk in terms of how we think we continue to improve the businesses going forward.
Thank you very much.
Good morning, everyone. I'm Walter Ripple. I'm Vice President of Sustainability. I've been in my role now for about three years. Prior to that, I was the Vice President and General Manager of our GLS thermoplastic elastomers business within SEM. I've been with Avient for 23 years, and in the specialty polymers business now for 29. I'm very happy to be here with you guys today to talk about sustainable solutions and how they're driving growth for our company. Innovation and sustainable solutions are, no question, the lifeblood of our company, and we've been focused on sustainability for a long time, and the results have shown. In fact, we doubled our sales from 2016 to 2020 with our sustainable solutions.
Michael and I are going to talk about some of the key growth factors for that, as well as some of the sustainable solutions that'll continue our growth into the future. I want to start with our sustainability promise, which we developed a number of years ago, and I'm going to read one sentence real quick. "Avient is committed to meeting the needs of the present without compromising future generations' ability to meet their needs." I can't think of a better definition for sustainability than that, and we truly have been living by that mantra for a long time. We took the additional commitment this year and signed on to the UN Global Compact, and that really is an even additional commitment to driving integrity, responsibility, and sustainable growth into the future.
We launched our latest sustainability report in July of this year, if you haven't had a chance to read it, I really encourage you to do so. We made a number of updates, including updating our 2030 sustainability targets. We further enhanced our disclosures on environmental, social, and governance impacts, we also made new commitments around climate change. We updated our sustainability targets because we had made some significant progress in some of the areas. I want to highlight a couple of goals. One, we introduced a sustainable solutions target of 8%-12%. We also increased our goals around greenhouse gas emissions as well as renewable energy to 60% by 2030 and 100% by 2050. ESG rankings and ratings firms have really taken notice.
In fact, with ISS, we're now ranked in the top 10% on social and in the top 20% on environmental impacts against our peer group. Likewise, Sustainalytics now has us in the top 17%. We also were ranked as one of America's most responsible companies by "Newsweek" last year. Just more recently, we found out that we've been ranked there again in the top 5% of this prestigious group. We are really proud of these numbers. It really means we have a clean house, and we've got a really good foundation to start on. What we're really excited about with sustainability is it drives growth for our company. Certainly, there is no better way for us to grow our company or help our customers to grow than through our sustainable solutions and helping them to meet their commitments through innovation.
We took our sustainability portfolio, we categorized it into eight ways that we help them to be more sustainable. From lightweighting, to decreased carbon emissions, to enabling sustainable infrastructure, helping our customers to be able to have more recycled solutions, Avient's customers really do rely on us to help them to meet their commitments. I want to share a couple of examples that talk about our categories with the highest revenue percentage. I'm going to start with recycled solutions. There's no more prevalent trend than recyclability and enabling a circular economy. We have a broad solution base from all of our businesses in this space. In one recent example, we helped a global OEM brand owner to launch a product that was more sustainable in the sense that it had more recycled content.
We did that by developing a solution that was 62% recycled content, they were able to make that launch of one-of-a-kind type of application, in this case, a women's razor, for the marketplace. Just imagine all the opportunities that exist with consumer product companies that have these same types of goals. Lightweighting is another very important trend in our industry. We recently helped a trucking manufacturer to make a box truck that was lighter weight. We did that by replacing wood with composite panels at a 60% weight reduction in an application where every pound matters. Not only that, these composite panels are more durable and actually extend the life of the truck. Another very good sustainable component. Lightweighting is going to continue to be a very important growth platform for us into the future.
In one other example, we enabled a more eco-conscious process by developing a solution that helped the customer to color a fiber during the spin dyeing process while the fiber was being made, as opposed to the normal process where it's put into a garment and then dipped in big vats of hot chemicals. They were able to eliminate that process altogether, thereby reducing the amount of water they had to use in manufacture by 75%, energy by 30%, and it'll enable them to reduce their carbon footprint by 25%. That's eco-conscious. These are just a few examples of why we're expecting our sustainable solutions to grow by 18% in 2021 over prior year. That's $930 million, or roughly 20% of overall company sales. We've been working with customers for some time to help them to meet their sustainability goals, and we're both growing as a result.
There's no question that plastics waste and climate change truly are some of the defining challenges of our time. These challenges represent opportunities for Avient. For one, we have solutions that can help to enable more recycled content in our customers' materials. On top of that, plastics remain to be one of the better sustainable solutions when you take the broader perspective into account. Take this example where we look at alternative packaging like glass and aluminum versus a plastic package. It takes six times the amount of water to manufacture these products. They weigh five times more. You have to use a minimum of two times more energy on average, and that emits two times the amount of greenhouse gases. That is a really big deal, and that's why brand owners are not so focused on plastic elimination, but instead on recycle incorporation.
They've made very aggressive commitments publicly about that. This chart represents a significant gap between the % of recycle being used now versus the brand owner's commitment by 2025. You can see there is a tremendous opportunity for Avient to help them to meet their commitments. I'm going to invite Michael up to talk about some of the more sustainable solutions that are going to help our customers to meet these very challenging circumstances.
Thanks, Walter, and good morning, everybody. I'm happy to be here. I'm Michael Garratt. I'm President for the Color, Additives & Inks business for Europe, the Middle East, and Africa, and I'm currently based in Luxembourg. I've joined Avient eight years ago as President for Performance Products and Solutions. I spent a few years as Chief Commercial Officer before finally arriving in this role 18 months ago. Prior to Avient, I grew up in Dow Plastics and Dow Automotive. I spent 10 years with the first attempt at a DuPont Dow joint venture, before moving into private equity. I'm thinking about the role I'm in today, I couldn't be more excited because it's probably the most fulfilling role that I've ever had. Why is that? At breakfast today, we were talking about skiing.
When I'm not at work, I love to be in the outdoors, skiing in the mountains, hiking, camping, canoeing, or scuba diving in the world's oceans. I've always had a natural affinity for nature and the environment. How great is it that the best impact I can have on the environment as an individual is to simply grow my business? I mean, it's a tremendous opportunity that provides a tremendous amount of excitement for me. Now the question is: how does Avient enable our customers to protect the environment? Simply put, in my business, we enable the incorporation of recycled content into the packaging stream. That's a critically important objective. We help customers to address issues with mechanical recycling. Mechanical recycling is the major form of recycling in place today, and it will be for the foreseeable future.
As you know, mechanical recycling has its share of challenges, there are a number of challenges that I've outlined here on this slide that we help customers to overcome. I'll go into each one of these in more detail, outlining the challenge that it represents, but also the opportunity for Avient to deliver value to our customers in helping them to overcome it. If you spend any time with Avient associates or visit our sites, you know that our internal mantra is "Challenge accepted," which has actually become part of our cultural element now. We really do accept the challenges that sustainability provides, and we intend to leverage the opportunity that follows to deliver value to our customers, our shareholders, and to the environment. As I get into these five areas, I'd like to start with color. I'll start with a question.
Why do brand owners care about color in the first place? Well, simply put, color matters. There have been numerous studies that show that color plays a very strong role in why you as a consumer select one product over another. In some studies, it's up to 85% of the weighting on your purchase decision. It shouldn't be surprising that consumer product companies take color very seriously, as do we. Now, if you think about recycling, plastics, by definition, are recyclable. You could convert them into wood decking. They could be used as modifiers for other materials like asphalt or concrete. They can be converted into carpets or even the fleece jackets that all of you own. This is known as open-loop recycling, where a plastic goes from one application but ends up in another. That's not what the brands are looking for.
They want closed-loop recycling to drive a circular economy. That is, the plastic that starts in a package gets recycled back into the package, that is far more challenging. Where there is challenge, there is also opportunity. Some of the solutions that we can bring to bear really target what you see on this slide. If you look at the dark end of the spectrum, that would be recycled material that probably has dozens of colors embedded into it, so it becomes very dark. Even if you strip all the color out to create that dark colored recycled material, you would still have discoloration. I'll insert a little polymer chemistry here. Every time you put a polymer through a heat history where you melt it, convert it, freeze it into a part.
Every time it goes through a heat history, you run the risk of breaking the polymer chain, breaking the backbone of the polymer. This is true for all plastics, but particularly true for PET. As you break this polymer chain, that manifests itself in a couple of different ways. One, you create unwanted molecular species. You also reduce the mechanical properties that the polymer imparts to the final product. You also create discoloration. If you're a brand who cares about color, you now have a discoloration challenge to overcome. This is where Avient can provide solutions. We provide color every day to color plastics. We can also provide super concentrated colors that allow the brands to help mask some of the discoloration that the recycled content creates.
In PET or clear packaging, our Optica toners help smooth out any of the color variation in the package that the recycled material creates. Our SmartHeat technology is patented, and it's a really interesting technology because it allows packages, bottles to be blown at a lower temperature. That lower temperature means that the polymer sees less heat history and is subjected to less damage as a result. Lastly, we have a color simulation tool, which is proving tremendously popular with our customers. It's really a service offering that we can bring to the table to help them navigate the variability that comes with recycled resin. Let me give you an example. You're a brand, you want to produce a product at the bright end of the color spectrum that you see on your left.
If you're using the virgin resin that you see on the left, you can see that you have quite a number of options when it comes to creating a color. Your degrees of freedom are large, your degrees of freedom are fundamentally dictated by your starting point. That starting point is the color of your base resin. Let's say you start with the recycled resin that you see on your right. You can see that your degrees of freedom on what your color opportunity is are greatly diminished. If you want to have that bright yellow color for your package, you simply cannot get there. That leads to the next question that comes out of the brand's mouth is, how much of the recycled content can I put in before I negatively impact the color?
This is what our color simulation tool helps the brands to understand. Here's a case study that we did recently with a brand who had access to the recycled resin that you see on the right. They want to know what their degrees of freedom are. What can we do in terms of color with access to the resin that we have today? You can see if they were to just use 100% of this recycled resin, the colors don't match up. One is far less vibrant than the other. We worked with them to understand how much of the recycled resin they could incorporate, and once it was incorporated, what the formulation needed to look like to be able to achieve the colors that they desired.
They were really appreciative of this effort because we took what would've been weeks of iterative color design if they had attempted to do it themselves, we took those weeks down to hours. We were able to achieve it in an afternoon. The brands and the converters that we work with truly value this service that we bring to them. We help to make their life easier. They are in a very challenging environment, trying to deal with all the variability that the recycled resin imparts. Recycled resin, just for the record, recycled resin in a packaging construct is good for us. When brands or converters need to overcome the discoloration that the recycled resin creates, they end up adding more colorant. We refer to this as the plus factor.
When we first presented the plus factor, we were, of course, challenged to try to monetize what the plus factor would be, which is a bit of a challenge because it's hard to estimate based on the fact that it's driven by what is the desired color that you're trying to achieve? What level of discoloration in the recycled resin are you trying to overcome? Frankly, can the brands get access to the resin that they need in the first place to be able to incorporate it into the system? Because one of the challenges that they truly face is based on the projections that Walter showed of where they want to end up on recycled content, there is simply not enough high-quality recycled resin available in the world to satisfy the growth and demand that they've laid out.
That is also a limiting factor on how far the plus factor can go, but it's net-net positive for our business. We also help them overcome decontamination, which is a really big thing when you think about food and beverage packaging. It's not just about color. Packaging can be contaminated by inadequately washing out whatever the previous contents of the package were, dirt, even the labels and the inks and the glues that are associated with those labels create contamination in the recycle stream. As I said, it's not just color, because if you've ever been exposed to raw recycled resin, it has a terrible odor. It's been explained to me that it smells like rotting food waste.
When I visited our CycleWorks facility in Italy, they told me that whenever they process the resin internally, they have to open up all the doors and windows because the smell is simply unbearable. We do have technology that we can bring to bear to support customers here also. Our laser marking additives enable packages to be laser marked, which can help reduce the amount of labeling that goes onto the package in the first place. Stephanie illustrated some of that in her presentation, where we had the QR code laser etched into the package. Our patented Azure technology scavenges acetaldehyde in PET packaging. Acetaldehyde is a natural by-product when you produce PET. It exists even with virgin PET.
When you add recycled PET into the package formulation, the acetaldehyde content goes up, and therefore, the need to scavenge it becomes important because it creates an off taste in beverages. You can detect it in water, but other beverages like beer can also be soured by the acetaldehyde. We're in the midst of launching a ProSure service offering, and this is to help build trust and confidence with the brands when it comes to NIAS compliance. NIAS stands for Non-Intentionally Added Substances, and it's a huge deal in the food and beverage market. In fact, it's a showstopper. If you cannot meet the compliance standards for NIAS, you cannot launch your product.
Working with our technology labs that are NIAS qualified, our know-how and our expertise, we're able to provide assurance and guidance to customers in incorporating our materials to meet NIAS compliance standards with confidence and trust. The third challenge we help overcome is addressing mechanical weakness. As I mentioned, every time a polymer goes through a heat cycle, you damage the polymer backbone. It does impact color, as I've mentioned, but it also reduces the strength that that polymer imparts to the package. It also creates problems if you're a converter. Let's say you're a large-scale packaging converter running a very efficient operation on thin margins at high speed. Now you introduce variable material through recycled content into that process stream. What you end up is less efficiency, more scrap and higher rates of in-field product failure.
Ultimately, it results in higher cost for the converter. The solutions we can bring to bear here are our Cesa antioxidant additives, that if you put them into the formulation to begin with, you can reduce the amount of damage that the polymer sees as it goes through the heat cycle. Our patented rePrize technology, when added to a formulation, helps to repair the damage that the polymer experiences. We have one technology that helps protect the polymer and another technology that helps repair it. Our SmartHeat technology, which I mentioned earlier, has an impact on mechanical strength as well, because as I mentioned, you get to blow bottles at a lower temperature than you would without the additive contained within the formulation. That's fantastic. The polymer sees less heat history, less damage. It's also important because you use less energy to blow the bottle.
The converter has a cost savings opportunity, and it's a lower carbon footprint way to create a packaging product. It's a win for the converter, it's a win for Avient, and it's a win for the environment. Ultimately, it helps to reduce the cost of conversion for the converter. Cost in packaging has always been a critical deal. You may know that there's been this migration, this desired migration among brands to convert to single material, monolayer packaging constructions. That has always been driven by cost, because that's the least costly way to produce a package. Now you add in the fact that these type of packaging constructions are more recyclable, and you've added fuel to the fire for brand demand to drive packaging in this direction.
You may or may not know that packaging can be highly complicated, and we have packaging engineering schools in the U.S. Some of it is very complicated for good reason because of the properties that are required to protect the contents of the package. Let's take a look at the ubiquitous cardboard carton. Think about the fruit juices that you buy in the grocery store that come in that cardboard carton. Well, it's not actually cardboard at all. It's actually a multilayer construction that contains cardboard, wax, plastic film, and metal film. That makes it extremely challenging to recycle, even in an open-loop system, but completely impossible to recycle in the closed-loop system that their brands are looking for. It's more expensive. In supporting brands in their desire to migrate to a single layer construction, we do have technology that we can bring to bear.
Our Lactra UV additive protective additives help shield dairy products from UV. UV is a big deal because UV kills dairy. It sours the dairy product within the package. Now, we take for granted that when we go to the grocery store and we want dairy, we go to the refrigerated section of the grocery store. In most of the world, that's simply not the case. The dairy products sit on a store shelf at ambient temperature, exposed to UV, and needs protection. Lactra enables the converter and the brand to create a single layer PET package that contains our additive, that provides the light blocking that they desire, and the single layer construction that they're demanding. Our Amosorb technology also enables single layer packaging constructions, protecting the contents from oxygen.
Oxygen in the air will pass through the walls of the package into the contents and spoil the contents. The thinner the wall and the fewer layers, the easier it is for the oxygen to migrate. Amosorb in the walls of the bottle captures that oxygen and spares and preserves the integrity of the contents within the bottle. Our Capture technology is patented and performs the exact same service, but through the cap, leaving the bottle walls even more pristine and available for recycling. The last area that we help our customers overcome is really with product consistency. As I mentioned, PCR resins are inherently variable. We've talked about the variability that comes in the color. We've talked about variability in mechanical properties.
I'll go back to, again, your high-speed packaging converter, and now I've got this variable polymer that's coming into your stream and the inefficiencies that that can provide to that converter and the opportunity it means for them to generate more scrap or more field failures. While working with us in our simulation tool, we can help our customers map out a desired zone for the type of recycled material that they can incorporate. We can help them on this is the range of colors that you need to use if you want to hit your target color design. This is the type of melt flow that you're going to have to aim for in the recycled resin so it does not interrupt or interfere with the efficiency of your operations.
We work closely with them to map out a grid of what desirable recycled resin would look like, which allows them, in turn, to go to the recycling community and set standards. These are the recycled materials that we need, these are the recycled materials that we can tolerate, and therefore, we can help drive efficiency back through the supply chain. This service is proving very valuable. Recently, and by recently, I mean in the last few weeks, there was a large global consumer product company who had a supplier day, virtual supplier day. As a surprise to us, we got called out in the middle of this call to their global supply base, pointing us out as the type of company they should emulate if they want to help them down their journey towards sustainability. That was great.
We loved the call-out, it was specifically because of the type of service like this that we provide them with. This helps deepen the relationships with our customers, it also embeds us as their trusted partner when it comes to helping them to achieve their sustainability mission. As a result, I think we can all agree, sustainability is a big deal. It's the major market mega-trend of our time. I've only just touched on a sliver. I've touched on my business and only one market segment within my business. We serve many other market segments, Avient is filled with many other business units. Across them all, we have the opportunity to serve their sustainability needs, as Walter illustrated in our eight ways. That's why we're investing heavily in focused R&D on sustainability.
Adding the right resources to be able to support that, the CapEx to support our labs in helping to design new technologies to further support our customers. Sustainability is a big deal, it's here now. The customer demands are great. They're looking for help, Avient can deliver. As a result, we expect to see our sustainability portfolio continue to grow at an 8%-12% CAGR for the foreseeable future. If there were any parting words that I could leave you with as a summary for my discussion this morning, it's that Avient enables sustainability powers our growth. With that. That is a bright light.
Hi.
Hi.
Hi, Angel Castillo from Morgan Stanley. Thank you for that presentation. That was very helpful. Just wanted to dive into a little bit more on the CAGR, the 8%-12%. I was wondering if you could break that down. How much of that is volume versus price, or just the mix improvement as you're delivering on all these different solutions?
Yeah. This is not really driven by price increases. This is really organic growth that we expect to deliver through launching of new technologies and sales of our existing technologies. I would just view that as organic growth, price increase, inflation independent.
As a follow-up to that, you noted a lot of service aspects to what you're doing and how much of that is just a competitive advantage as you go with your customer, allows you to anticipate and develop new products versus is there opportunity, as you noted that pricing is not in that 8%-12%, is there maybe an opportunity to price a little bit more of that service aspect of what you're delivering for the customer?
Yeah. We really approach it through two ways. If you look at the ProSure offering that I mentioned earlier that we're getting ready to launch, that will entail a premium, because we're going to have to do a lot of background work and support for our customers when we deliver product to them to make them trust and feel confident that this will meet their NIAS concerns. We're going to price that as a premium on our existing products. There will be a service premium that comes with that. If I look at our simulation tool and the work we do to help customers bring recycled content into their packaging constructions, that is a competitive advantage. Where we see that monetized is through growing our sales, working on new development projects with the customer, and growing share. That, we don't charge for that.
That just helps us keep us a step ahead of the competition. There's a question here. Oh, down there.
Hi, Mike Harrison with Seaport Research Partners. You give this chart here that shows that you're up to $930 million in revenue for your suite of sustainable solutions. Do you have any way of estimating the total addressable market? I assume the total addressable market has grown substantially over the past five years, any thoughts on what the total opportunity could look like?
No, actually, Mike, I don't know what the total opportunity could look like. I challenge anyone to actually know that, because a large part of what the opportunity could be is dictated on the ability for people to actually get their hands on enough recycled resin content. There's this governor that's built on to the pace with which they can adopt recycled resin. 8%-12% we see as continued strong growth, often already stronger base. Of course, the bigger the base becomes, the math doesn't work out so well once you get to the CAGR. We still expect that these sustainable solutions will grow much faster than individual market segments. There's just so much demand here, really it's just the governors on our ability to adopt recycled content.
All right. A second question I had As you look at the overall sustainable solutions portfolio, obviously Legacy PolyOne had a lot of good solutions and products in there. Clariant, I think, enhanced that. Can you maybe talk about what has happened since you brought those together in terms of addressing any potential gaps in your offering? Do you still see that there are some gaps that might need to be addressed with future M&A?
Yeah. I'll talk to the color and additives piece particular, since we mentioned Clariant. There's great opportunities in M&A for the other business units, particularly in composites, which is inherently also a sustainable solution. If I think about Clariant and PolyOne really had a strong franchise in PET, in clear bottles, blown bottles. Interestingly enough, Clariant had a stronger franchise in olefins, polyethylene and polypropylene. Now when we bring the two together, we have a more complete portfolio to bring to our customers. Yes, both of us were actively involved in this. We were calling on the same customers in the same markets. We understood what the customer needs were. We were all attacking sustainability because the need was evident. We just attacked it in different ways.
The CycleWorks facility that Norbert mentioned in his presentation is a fantastic tool for us. Legacy Clariant brought that in. It's an internal mini recycling plant that allows us to mimic the impact on polymer and additives as they go through multiple iterations in a recycle loop. You can imagine, you start with a virgin bottle, then it gets recycled. Let's say 25% goes back into a bottle. That 25% goes through the recycling loop again, and again, and again. How do you actually model what the impact of those multiple heat histories are going to be on the future resin stream?
Clariant launched this about a year and a half ago. I can tell you, the major brands are super excited to work with us to understand what the impact of those multiple loops are going to be on their future resin supply. That's an example of a service offering that Clariant's brought to the table that PolyOne did not have access to. If I were to summarize, we have a broader portfolio of solutions to bring to customers that were complementary, interestingly enough, not that competitive.
All right.
Hi, Kristen Owen from Oppenheimer. Follow-up question, related to the last topic. Many of the products that you've talked about today are for post-process materials. As you're thinking about the challenge that these brand owners have in getting sort of virgin resins, are you seeing that drive any sort of uptake in establishing or better seeding a better post-recycled material from virgin, things like the Cesa antioxidants that you pointed out?
I mentioned we have some additives that we apply that repair damaged polymer, but we do have additives that we can apply up front that helps preserve the integrity of the polymer as it goes through the recycle stream. Those antioxidant polymer additives are a great case in point. They're there to help the integrity of the polymer as it sees multiple heat histories. We have technologies that repair. We have technologies that help prevent damage.
My second question is really about the additional resources that you're putting in this area. Can you just talk a little bit about what those resources are? Is this a digital resource effort? Is this a go-to-market effort? Just talk a little bit about how you see resourcing this business.
We're just recently out of our strategic plan review. I'll tell you that for the color and additives strategic plan, it was a core element. Part of it was driving focus and making sure that our R&D teams understand that there's no stronger market megatrend for them to align to than sustainability, and making sure that we are aligning the projects in our portfolio to meet those market needs. The resources we're adding are mostly in technology to help support building out the platforms. Each of these platforms I've mentioned have a number of products within them, but each represents a great platform for further product development. We're adding mostly technical resources to the fray to develop new technologies to support our customers. There is a digital play as well, and Norbert talked about the ability to do color matching, referencing our digital library.
That's an important enabling technology, because if I can get a color match to a customer quickly without tying up my lab resources, it means not only do I get a response to the customer quickly and therefore have a higher chance of winning the business, but all those technology resources that were tied up in trying to do the color match can now be redeployed to focus on sustainability. That's I've been given the cue. There are no more questions.
We got one right here.
Tom Edge from Tanna Capital. Just a real quick question on the collection of the materials. Are you dependent on the consumer to collect this material? That's the governor on growth? Is that what you're talking about?
Well, there's two aspects. That is clearly a big challenge. How do you get polymer back into the recycle loop? The consumer has a big role to play in that. It's a large global problem, and that's really where the Alliance to End Plastic Waste and our participation with them plays a critical role. How do you make sure that the plastic gets into the recycling loop and doesn't end up in the ocean? Right. That's one big governor on how much recycled material you can get. I saw a recent estimate in a recycling journal that in the U.S., the recycling rate actually dropped during the pandemic from around 30% to 27%. To meet the demands that the brands have outlined, they suggest that the recycling rate would need to be between 55% and 60% to meet the demands that the brands have outlined.
You can see the big gap that that creates. Also, with the material that you have, getting clean, consistent polymer is in high demand. I showed you the variation from very pure and white to almost black. All the packaging customers want that pure white recycled resin. There's huge demand for that end of the spectrum. There's also a limit on how much of the polymer that gets recycled can actually fit into a space that benefits consumer packaging companies.
Closing the gap, how do you close the gap?
Well, that's not something that our company is in a position to do. We have to join with other companies around the world, like the Dow and the DuPont of the worlds, with the Alliance to End Plastic Waste. Because getting consumers to recycle more and to stop the disposal of a completely viable resource, to get it back into the recycle stream, is beyond the scope of Avient. It's going to take a global plastics effort to make that happen, and we try to play our part in doing that through our contributions and partnership with the Alliance to End Plastic Waste. Before I go off stage, I did want to note that Cathy Dodd, who is our President for the distribution business, could not be with us today. Cathy will be joining us, but she'll be joining us by video, which will start shortly.
Once Cathy's video is completed, Joe will join us back up on stage to provide some further meeting logistics before we head into break. Thank you for your time, and I look forward to further questions during the break.
Hello, and thanks for joining us today. I am Cathy Dodd, the President of Avient Distribution. I have the pleasure to present to you on healthcare, an industry that's exciting and ever-changing, one that is well-aligned with key mega trends and aligned with Avient's growth strategy. Today, there are three things I'm going to talk about. First is that we have a long and proven history of success across a full range of healthcare industry segments. Second, we understand the macro trends and the opportunities that arise out of them and how we will capitalize on these opportunities. Lastly, we are well-positioned for future growth by virtue of our portfolio, differentiated services, and long-standing relationships with leading healthcare OEMs.
Avient has been involved in healthcare for over 15 years, and in that time, we have built a successful track record in this industry, a track record that consists of successes across many healthcare segments, a track record supported by both M&A initiatives and solid organic growth. This growth began well before COVID and will continue into the future. Success is also supported by our key foundational strengths and capabilities, our expansive material portfolio meeting the enhanced performance demands of healthcare innovations, our differentiated services that bridge across the entire product development cycle, and deep, long-standing relationships with leading global healthcare OEMs. We have built credibility over the years, proving ourselves to be a strong, knowledgeable, and innovative partner, a partner who enables wins by expanding on current applications as well as entirely new innovative medical platforms.
For example, 5 years ago, we worked with an OEM where we mainly only distributed materials for them, and today we have a seat at their table, helping develop platforms for the coming 10 years. Healthcare companies see Avient as a partner to help them solve difficult challenges and bring their innovative medical technologies to meet the market demands. The world is changing, and trends are evolving. Trends are changing the healthcare landscape to help by meeting the needs of people around the globe. These trends are shaping innovation, an innovation that has certainly accelerated over the last 18 months. What does this change mean for Avient? Well, we are well positioned to respond to these changing trends. With our strong partnership with key OEMs and our foundational capabilities, we are in a unique position like no one else.
Let me share some details on these important trends. With the recent pandemic, it certainly raised awareness and a need to focus on protection and prevention. As COVID hit, it accelerated many innovation platforms underway, not only driving increased needs for labware and masks, but sped up the development for new and growing innovations such as test kits and diagnostics. Avient was set and ready and able to support our global partners where needed. We supported the design and materials for COVID test kits, both the reuse component system as well as disposable cartridges. Demand for these devices will continue to grow due to the expanded testing requirements and the desire to protect and prevent. Another trend we follow is increased life expectancy, and as this trend continues to increase, the surge of chronic illness often follows.
About 20% of the U.S. population is 65 or older, and these past years has required older patients to adopt and learn how to use self-managed devices for their chronic conditions. Healthcare OEMs are continuing to look to improve the design and functionality of these devices to ensure the proper utilization and dispensing of medication. These devices can help support those with high risk of heart disease or others who might be part of the anticipated 250 million individuals with diabetes by 2026. Now, these are certainly sad statistics. However, the increase in chronic illness is driving continued evolution in health and wellness innovations, such as connected health devices, remote monitoring for heart conditions, and self-administering devices such as injector pens. Take connected health. It is not a new trend, but one that is certainly evolving.
Wearable devices are allowing people the freedom and dignity to continue with their daily lives while tracking and monitoring their health. These devices require performance materials and design expertise to help meet the need of the users. The fit, form, and durability is important for people on the go, and they want to be able to depend on the quality of these devices. As highlighted before, Avient has a solid foundation of capabilities that support such innovations. Remote monitoring devices allow the patient to not only track their health and wellbeing, but they can connect with their doctor remotely to help gain professional advice when needed. These devices also need the same level of performance materials for durability, long-lasting aesthetics, and overall comfort. Even more important, the users need to trust that they will work and work consistently, providing accurate output.
This level of user confidence will help drive further use and adoption of these already growing innovations, such as the self-administering trend, one we are also seeing expand. This growing trend is very important. It not only played a big role during the pandemic, but it is also allowing those who can't get to a doctor or prefer less in-person doctor visits a more flexible option to maintain their health. It also provides options for those with limited or no access to doctors, really meaning it can open doors for improved medical care globally. These devices ultimately support the increased desire and need to take care of ourselves, control and manage our own health and wellbeing. Again, all of these devices that support the growing trends need to be designed to perform with a high level of accuracy while being easy to use.
This is really where Avient comes in. Let me share a video to highlight more.
Staying healthy is something we all deserve. We don't have to do it alone. There are tens of thousands of healthcare providers across the globe whose sole aim is to help us live our lives to the fullest. Healthcare is evolving. We are living longer. Self-administration and home monitoring are the new normal. The global pandemic has made us more aware than ever before of the need for prevention and protection. Advances in diagnostic and imaging technologies continue at a breakthrough pace, even reaching the world's most underserved regions. At Avient, we combine design, engineering, materials, and manufacturing expertise with standout sustainable materials so that healthcare providers can deliver the care their patients deserve. Our design team has a deep understanding of human factors.
We know that healthcare providers need safe, simple, easy-to-use devices. We know that brand owners need to create products that are attractive and appealing, dependable, and functional, using the latest advances in material science. We also realize that brand owners need help both navigating the complex regulatory landscape and ensuring their operations are streamlined, dependable, and cost-effective. From idea to reality, we help our customers create the products that move healthcare forward. We are Avient.
I really love that video. It does represent who we are and what we do in this industry. As the world shifts toward at-home healthcare, it demonstrates how the interaction with these devices is changing, for the patient is now also the user of the device, often alone in their own environment, and usability must be simple. Avient is the right partner. We not only bring a full portfolio of materials, but the expert service we offer are key. One of these services is Avient Design, a service provided by a global team of industrial design experts who not only know design, but they know materials, processes, and manufacturing. They understand how to connect the material performance to innovation and ultimately enabling a positive user experience. They're a team of experts who support our customers through the development process from concept to consumer.
A process that can often be very complex and multidimensional. There are many steps along the way from the initial idea all the way to launch, and we can support all the stages. This is best demonstrated with an example. A leading OEM asked us to help them with one of their innovations for self-management. Although they have designers, their designers rarely have the material, colorant, or extensive manufacturing expertise. Avient designers do. They speak at the same level with our customers' designers and product development teams, enabling them with the design and the speed of the development cycle. This successful example started in the early stages. The concept is what you see on the screen, an auto-injector device used by patients to self-administer IV medication.
While on the surface this might seem like a rather simple device, some of the parts have very high mechanical requirements to allow for proper and accurate dosing of the drug being applied, while other parts support safe handling and ease of use. This simple-looking device is actually quite complex. Let me share how the Avient design team looks at and enables such innovative projects. They start with extensive research, discussion, and breaking down the device to understand the mechanics and more. The team connects the performance and design characteristics to meet the needs of the user and identifies the various components Avient can support with specialty materials and colorants. Through this research, they identified the many factors the device must serve. It needs to be easy for the patient to use, easy to hold, grip, and use with confidence.
This was accomplished by using Avient medical-grade thermoplastic elastomers. It needs to have the look and feel of high quality to build the confidence in the device and preserve the active ingredients. The team used Avient's high-density polymers to provide weight for a feel of quality. It has to meet strict regulatory requirements, which means all the materials used must comply. Avient has an extensive portfolio of medical-grade options. There was also a need to help the patients with the proper use of these devices, and the team realized that the use of our Therma-Tech™ polymer can help speed up the process, bringing the ingredients to room temperature, allowing for a more comfortable administration of the medicine. Basically, when it goes into the body, it's no longer cold. Other additives and lubricants were used throughout the device as well.
Lastly, the OEM values their brand image and look, and our designers delivered using our medical-grade colorants to bring their brand to life. All this led to healthcare OEM adjusting their product development plans using this expert insight, material selections, and overall design elements. I started off by saying I would share three key things to understand how we win today and tomorrow. We have long proven and successful history in the healthcare industry. We understand the macro trends and how to leverage for growth. Probably most important, we are well positioned to win, and the relationships with leading healthcare OEMs are key. We are a leading partner, and they look to Avient to help them with their innovations. Innovations targeting the right segments and delivering solid growth in years to come. Thank you.
All right, we're at the halfway point here. I want to thank all of you for the great questions so far. There'll be more time for questions in the second half. I also want to thank our presenters. Great job thus far. You got to hear some of the early successes of the Clariant integration. You heard about the mega trends that will support sustainable solutions in healthcare. In the second half, we're going to get into composites, our presence in Asia and Latin America. Then, of course, Jamie and Bob will bring it home with a summary and wrap up. Let's take a short break. We'll reconvene at 11 o'clock. It's about 10 minutes, and we'll start promptly then. Refreshments are right outside the door. Please help yourself.
This man, this beautiful man has got this sense of devotion. One look, one touch of a hand could set the spiral in motion. Oh, what's a man to do? Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now. Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now. This girl, this beautiful girl has eyes the size of the ocean. This man, this dutiful man has got these mixed up emotions. I want it, can't have it. Oh, I can hardly stand it. Oh, what's a man to do? Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now. Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now.
Head, shoulders, knees, toes. Look alive, it's time to go. Head, shoulders, knees, toes. Look alive, it's time to go. Head, shoulders, knees, toes. Look alive, it's time to go. Head, shoulders, knees, toes. Look alive, it's time to go. Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now. Gotta get up, gotta get up. Gotta get up, gotta get up. Gotta get up, gotta get up. Na-na-na-na-na-na-na-na-now. Na-na-na-na-na-na-na-na-now. Na-na-na-na-na-na-na-na-now. Told me like an echo, doo wee ho it's a rabbit on a chain. Throw me a signal, timbals the static on the brain. She's a little burner, gonna throw you to the flames. Leave a ticking time bomb, gonna blow us all away. Take the time and waste a moment. Never ask to be forgiven.
Says he wants a boyfriend with no kin always running from the law. Every other weekend with his back in her claws. He's a live wire, shooting sparks in the night. He's a gun for hire, with the bead in his sights. Take the time and waste a moment. Waste away the lines we're given. Make the price draw the feelings. Never ask to be forgiven. Woo. Take the time and waste a moment. Waste away the lines we're given. Make the price draw the feelings. Never ask to be forgiven. When you break the rhythm and words all make you whole. When they break it down this world is on a roll. Heads up, you're working it hon', now get yourself together. When you cause the dominoes fall it's time to go.
I'm feeling so far away I hear the birds singing the sun is also singing. Just wanna stay up all night with you. Just wanna stay up all night with you. There's nothing that I wouldn't give up for you. Just wanna stay up all night with you. I keep cruising. Don't wait for nothing now. Just keep pushing. Don't wait for nothing now. I keep cruising. Don't wait for nothing now. Just keep moving. Don't wait for nothing now. Nothing now. One, two, what you doing? I've been jumping through some hoops. Wanna get my body loose. Wanna tell you what to do. I've been running. Up and down like an animal struggling. Looking for a diamond. I'm trying, I'm fighting, write another rhythm now. I just wanna stay up all night. Wanna stay all night with you. You. You.
Just wanna stay up all night with you. Stay up all night. Just wanna stay up all night with you. There's nothing that I wouldn't give up for you. Stay up all night. Just wanna stay up all night with you. Turn up the radio. If you don't really care. Let them know that you're there. If you got the time to take it, I say. Turn up the radio. Let down your hair. Let them know that you're there. If you got the time to take it, I say. Up all night. If you don't really care. Let them know that you're there. If you got the time to take it, I say. Up all night with you. With you. With you. Ah, oh no. Ah, oh, no. Ah, oh, no. No, she don't mess around. No, she don't mess around. Oakland, Louis, California.
Little Wild, yeah, she coming for you. London, Mary, Charm City. Oh, Lord, wish you were my baby. You know she'll drive you crazy. Yeah, she coming for you. No, she don't mess around. No, she don't mess around. Oh, no. Oh, no. Oh, no. No, she don't mess around. No, she don't mess around. The heat is rising and only getting hotter. Ready to blow. I think I'll pour myself a glass of water. Let it flow. She'll show you what she's made of. Yeah, she coming for you. She's gonna try to break you. Yeah, she coming for you. No, she don't mess around. No, she don't mess around. Oh, no. Oh, no. Oh, no. No, she don't mess around. No, she don't mess around. Oh, no. Oh, no. Oh, no. Oh, no. Oh, no. Oh, no. Oh, no.
No, she don't mess around. No, she don't mess around. Oh, no. Oh, no. Oh, no. No, she don't mess around. No, she don't mess around. No, she don't mess around My love. My love. My lover, lover. I'm in paradise whenever I'm with you. My mind. My mind. My mind. Well, it's a paradise whenever I'm with you. Ride on. Ride on. I will ride on down the road, I will find you. I will hold you, I'll be there. It's long. How long? Well, it's a mighty long road, but I'll find you. I will hold you and I'll be there. I know you heard it from those other boys. This time it's real, it's all in that I feel it. I know you heard it from those-
If it feels like paradise running through your bloody veins, you know it's love heading your way. If it feels like paradise running through your bloody veins, you know it's love heading your way. It's my time. My time. My time. Well, it's a never-ending helter skelter. We'll be out whatever the weather. My heart. My heart. My boom boom heart is a-beating. It's a-thumping and I'm alive. I know you're hurting for those other boys. This time it's real. It's something that I feel. I know you're hurting for those other boys. This time it's real. It's something that I feel. If it feels like paradise running through your bloody veins, you know it's love heading your way. If it feels like paradise running through your bloody veins, you know it's love heading your way. Paradise. Hold on, hold on. Meet me there. Hold on, hold on.
Paradise. Hold on, hold on. Meet me there. Hold on, hold on. Paradise. Hold on, hold on. Meet me there. Hold on, hold on. Paradise. Hold on, hold on. Meet me there. Hold on, hold on. Paradise. Hold on, hold on. Meet me there. Hold on, hold on. Paradise. Hold on, hold on. Meet me there. Hold on, hold on. If it feels like paradise running through your bloody veins, you know it's love heading your way. If it feels like paradise running through your bloody veins, you know it's love heading your way. I know you're hurting for those other boys. This time it's real. It's something that I feel. I know you're hurting for those other boys. This time it's real. It's something that I feel. If it feels like paradise running through your bloody veins, you know it's love heading your way.
If it feels like paradise running through your bloody veins, you know it's love heading your way. If it feels like paradise running through your bloody veins, you know it's love heading your way. If it feels like paradise running through your bloody veins, you know it's love heading your way.
All right, everybody, if we can try to get back to our seats so we can get started here. Frank, time to go.
Well, if you gather truth unto your progenitors.
Thank you.
Are your excuses any better than your senators? He held a conference.
Good morning. I'm Chris Pederson, the President of Specialty Engineered Materials. I really couldn't be more excited than to talk to you today about our engineered materials business, and more specifically, our composite materials platform. I joined Avient three years ago, November of 2018. Prior to that, spent nearly 30 years in the composite materials business. Initially starting out as an engineer at the Boeing Company, helping to design, build, and implement composite parts onto military programs. Eventually moved on to the supply side and spent quite a bit of time with Cytec, one of the largest composite material suppliers in aerospace, and had a number of roles, including technology leadership and business leadership. Most recently with Hexcel, where I had responsibility for strategy and M&A.
One of the primary reasons I joined Avient was because of the investments that we had made in composites and the platform that we had built. To really be a chance or have a chance to be part of building, growing, and creating something that I think is pretty unique in the marketplace, and I think we're well on our way to do that. Before I get into the composite portfolio, I just want to touch briefly on our overall engineered materials business. Over the last few years, we've had tremendous growth in engineered materials. Growing EBITDA at over 25% per year since 2019. Over that same period, expanding EBITDA margins by 250 basis points. Really, that's been a result of a strategy that's been focused and alignment with key mega trends. The adoption or growth in applications of healthcare applications, as Cathy talked about.
The tremendous pull from our customer base for sustainable solutions, as Walter and Michael talked about. The build-out of infrastructure to support telecommunications and 5G, which has resulted in tremendous pull for our products. The trend I want to talk about today is the lightweighting of materials and structures. Now whether that's for driving performance in our customers' products or reducing weight to drive fuel efficiency, it's all resulting in a tremendous pull and broad adoption for composite materials in the market. If you look at just the contribution to our financial performance from our composite portfolio, it's expected to deliver $50 million in EBITDA to the engineered materials business this year. About 30% of the EBITDA for that business. It really hasn't happened by accident, right? We've been focused on a deliberate strategy to get into and grow composites. Five acquisitions since 2012.
As we look forward, it's an area that we expect to continue to do so. Before I get into our composite materials platform, I wanna focus just a bit on a couple fundamentals in composites, because it really sets the stage for why our composite portfolio is valuable to our customers. Composites. Fundamentally, it's really a combination of a reinforcing fiber, carbon, glass, aramid, and a polymer matrix, thermoset or thermoplastic. The combination of these two materials actually delivers products that have very unique performance characteristics. They take on strength and stiffness of the reinforcing fiber, yet they have processing characteristics and other attributes of the polymer matrix. Avient is actually in a pretty unique position in that we're not really tied to any particular fiber or polymer.
If a customer has an application or a need, we actually can select the right components for the application and really bring a customized, optimized solution to bear to their solution. The other thing to really consider in composites is the product form, in that not all product forms are really ideal for every application that a customer might have. Each one of those product forms has a different trade or a different balance of these properties you see on the triangle. Materials performance, what manufacturing processes you can use, or what type of designs that you can implement. For example, materials can be discontinuous or a fraction of an inch in length, such as what you see in the light blue bubble. These materials are really highly compatible with complex designs. They can be used in injection molding processes to make pretty intricate structure.
Where we have customers who want to develop or produce things that have some complex designs to it, yet still have to have some level of performance, these types of materials are ideal. On the other hand, the dark blue bubbles are materials that have a continuous fiber reinforcement, so the fiber actually is continuous through the entire material. These offer the highest level of performance. Where we have customers with applications that really are driven by performance and really wanna reduce weight, these are likely the most optimum types of material forms. There's a lot of area in between, and there's lots of versions of these different materials, but this is what you need to understand. You need to understand these trade-offs, and at Avient we do.
If the customer comes to us with an application, say they're focused on a particular manufacturing process, we can pick the right material form and then optimize for the other properties to deliver an optimized solution for them. The beauty of the Avient portfolio is that we actually have a broad set of materials that span this entire spectrum of manufacturing capability, performance, and design flexibility. On the left, we have discontinuous materials from our PlastiComp business. Again, highly compatible with complex shapes. These are being used in such applications as an all-composite seat for an off-road vehicle. It's got some pretty intricate requirements and shapes to it. Also a series of continuous fiber-reinforced materials from our Glasforms business, Polystrand, and Gordon Composites that really provide very high performance materials that can go into applications that require a high degree of performance.
Most recently with the addition of the Fiber-Line business, we have engineered fibers capability, where we can take high-performance fibers, and through additional processing such as twisting, combining, or utilizing our formulation expertise to coat them with value-added capabilities, we now have the ability to actually impart special properties to those fibers for certain applications. Our strategy of investing, growing, developing our composite portfolio is really delivering results. If I were to go back and show you the financial contribution slide again from our composite portfolio just four years ago, it was barely break even. It's now the primary driver, the primary growth driver for our Specialty Engineered Materials business. In addition, we've had a few areas that we really got hyper-focused on. One is in the outdoor high-performance space, encompassing power sports and outdoor gear.
Applications such as off-road vehicles, watercraft, shooting sports, snow sports, a number of applications that all really have pretty demanding set of requirements. In many times, operating in environments that have some pretty demanding conditions as well. Our portfolio was able to bring solutions to bear on all of these markets. It's not just in outdoor high performance. We have applications in other markets as well, such as industrial and energy, where our products, our composite pultrusion products out of Glasforms, are really the primary load-bearing and stiffening element in new GPS trackable, durable industrial shipping pallets. These products allow our customers to deliver something in the market that doesn't exist. Pallets that can carry much more load at a much lighter weight than what's existing in the market. Our products also go into energy infrastructure.
Again, our pultrusion products are key enablers in energy or power grid as composite insulators, cross arms, and highly durable corrosion-resistant utility poles that we believe will translate to other infrastructure build areas such as that being done for telecom and 5G. I'm real excited about what the future holds for our composite platform. I think it's got a very, very bright future, and it's also, as I mentioned, one of the key areas that we're focused on with our M&A strategy. Most recent example is the acquisition of our Fiber-Line business in 2019. With the acquisition of Fiber-Line, one, they've been a great addition to our portfolio. Two, it's got us into a leadership position in engineered fibers and composite pultrusions in the fiber optic cable space. They brought a great deal of technical expertise in this space, as well as a global presence.
I'd like to introduce now Matt Reinhardt. Matt is our GM of our Fiber-Line business, and Matt's going to talk a little bit about telecom, 5G, and how our products enable solutions in that space.
Thank you, Chris. As Chris mentioned, I'm Matt Reinhardt, and I have the honor of leading our global Fiber-Line team around the world. Thank you. I started my career, much like Chris, as an engineer, and I worked 19 years for DuPont in roles ranging from manufacturing and R&D to global marketing. About four and a half years ago, I received a phone call from one of my old customers, Fiber-Line, asking if I wanted to come work for them. What really excited me about Fiber-Line was the opportunity to rapidly grow the business. As you saw from the results from Chris, we've been able to do that very effectively. In addition, it was the people. There's just great people at Fiber-Line, and I've really embraced the culture and loved it, and we've seen that at Avient as well.
My colleagues and I joined Avient in January of 2019, and I can honestly say, after the three years of integration, that Avient truly is a great place to work. For over 25 years, Fiber-Line has been supplying the telecommunications industry. Over this period, we've been able to establish a leadership position in supplying engineered fiber to fiber optic cable producers. Telecommunications is a core market for Fiber-Line, and I'm really excited to share what the innovation of 5G will mean to the world and to Avient as a whole. I'll start off with a short video. Mobile telecommunications is perhaps the most impactful innovation in my lifetime. Over the last 40 years, we've just seen a breakthrough in technology that has launched some of the largest industries and companies around the world.
As I look through my own journey through the last 40 years of telecommunication, three moments kind of highlighted some of the innovations that have happened. It starts back in the early '80s, and I can remember being picked up to go to soccer practice from one of my friends, and his father had a car phone. This is something you might see on "Miami Vice," but he actually had a car phone. This was a real breakthrough at the time. The ability to actually talk on a phone while driving around was revolutionary at the time, and only available to a limited number of folks. Fast-forward to the late 2000s, and I had an opportunity to do a volunteer trip to a small village called Mzima, Kenya.
This village had no running water or electricity, yet each evening, I was able to pick up my red BlackBerry and talk to my wife and my children half a world away. At that point, mobile broadband had actually reached even some of the most remote parts of the world. In the mid-2015 and 2016, I had an opportunity to be an expat in Shanghai, China. During that time, one of the hardest things for me leaving the U.S. was leaving sports. I'm a huge sports fan, and it was hard to keep up. While traveling in a taxi, I was able to actually watch college football games on my iPhone. HD streaming was possible. From the early days of not very reliable telephone signals to streaming HD video, telecommunications has grown by leaps and bounds.
We've now entered the fifth generation of telecommunications, and like its predecessors, 5G offers another major leap in performance that allows new opportunities. There's three key attributes of 5G I'd like to highlight, speed, low latency, and ubiquity. I'll start with speed. Each generation of telecommunications offers a breakthrough in speed. 4G offered 100 times faster downloading speeds than 3G, reducing the amount of time to download a two-hour movie from 26 hours down to six minutes. 5G is offering another 100 time improvement versus 4G, reducing this time down to 3.6 seconds. Not only does this save time, but it actually also uses less energy, reducing the power consumption of electronics batteries. The second area is low latency.
Latency is defined as the amount of time it takes data to get from point A to point B. 5G offers ultra-low latency with times of less than five milliseconds. This is essentially real-time data transmission, and it's going to enable major breakthroughs in virtual reality and remote control and monitoring of systems such as power grids and even remote surgeries with robots. The third, and perhaps most impactful part of 5G is ubiquity. Ubiquity basically means that you will be connected to the network anywhere and at all times. This is possible through a massive investment in antenna and fiber optic cable. The heart of 3G and 4G were large macro stations. These are the towers you see when you drive up and down the highway, large antennas, and times they're camouflaged to look like trees.
5G will leverage these same antenna, but in addition, there's going to be a need for millions of small cell antennas. These small cell antennas will be mounted on light posts, on the sides of buildings, and even in stadiums. This creates a great opportunity for us at Avient as a leading supplier into these materials. It's estimated that 5G will use 16 times more fiber optic cable than 4G. I've introduced two key terms of the telecom lexicon, latency and ubiquity. The third is densification. Densification is a term used to describe the need to have more antenna to provide coverage of a certain area. This is required for two main reasons. First of all, 5G uses millimeter wave or very high frequency signals that transmit data.
While these are extremely fast and help drive the speed I talked about earlier, they don't travel very far. The signal can only go about 500 meters as opposed to two kilometers for 4G. In addition to this need, there's also a need for much greater capacity. We, as consumers, are using much more data than we did last year or even three years before. It's estimated in the next three or four years, we'll use triple what we do today. That, combined with the rapid introduction of the Internet of Things devices, is going to drive a lot more need for capacity of the network, and that's going to be driving a huge amount of investment in antenna. Behind these antenna is a fiber optic cable infrastructure. Fiber optic cable is essentially the nervous system for telecommunications.
Much of the investment going into fiber optic cable is driven by government stimulus. This is necessary because as you can imagine, when you go out to rural areas, there just aren't enough consumers to pay for the massive investment required to get the telecommunications to that area. In the U.S., the infrastructure bill passed this last month earmarked $65 billion to drive broadband infrastructure growth. That was on top of $20 billion that was earmarked as part of the U.S. Rural Digital Opportunity Fund, investing in cable going out to rural areas. These investments are huge, but they pale in comparison to what the telecoms are spending on their networks, ranging from antenna to fiber optic cable to data centers. While these lightning-fast download speeds are available today in select locations, full implementation of 5G is going to take another decade and require about $1.5 trillion of spending.
You've probably seen a lot of coverage maps. I saw a T-Mobile banner coming in on my trip a couple of days ago, and it showed 5G coverage over almost all the U.S. You're probably thinking to yourself, "Where's all this investment going? Is it already there?" The answer is not yet. We're still in the very early stages, and most of what's going in today and what you see in the coverage maps is basically leveraging the 4G infrastructure with incrementally faster signals. Rolling out the true 100 times faster speeds is going to take this large network of small cell antennas, and that's going to take another seven to 10 years. What does all this mean for Avient? Simply, great opportunity. I mentioned earlier that we're a leading supplier of materials that go into fiber optic cable.
I'd like to really quick kind of describe how a fiber optic cable is constructed. At the heart of every fiber optic cable is the optical fiber itself. This is a very thin glass fiber that sends signals through to transmit data. Obviously, these thin glass fibers are very sensitive and cannot handle a load, and that's where we come in as Avient. We have a number of different products that we can offer to protect the optical fiber from stress and strain, but also from moisture. We have a pultruded rod that's used as a strength member to help push cables through duct work. We also have high-performance fibers, such as Kevlar, that can take the load of the cables as they're extended from tower to tower. We have water-blocking yarns that prevent water from getting into the optical fiber bundle or transmitting through the cable into electronics.
We also have great opportunities outside of the fiber optic cables in antennas and IoT devices. Our Edgetek and PREPERM resins allow engineers to design unique capability while having almost no attenuation of the high-frequency signals going in and out of the devices. Avient is extremely well-positioned to leverage our unique capabilities and global presence to grow in the 5G industry. It was a great opportunity to share this with you, and I can't thank you enough for your time, and I think you can see why we are so excited about 5G. I'll now turn it back over to Chris to share how 5G and composites help drive growth in SEM. Thank you.
Thanks, Matt. I covered, in general, our composite portfolio and touched on a few applications, including outdoor high performance. Matt, as you can see, covered our opportunities in 5G. For Avient, it's really much bigger than that. We have a broad portfolio that can apply to many different markets, and we do. Our products are used in building and construction, for example, where our glass-reinforced composite tapes are used to manufacture durable, corrosion-resistant outdoor decking materials. They're used to manufacture very lightweight, durable doors that go into warehouse structure. In transportation, as Walter talked about in his presentation, they're used to manufacture lightweight, durable walls and floors for the trucking industry. In the area of sporting goods, our engineered fibers, which Matt talked about, are also used to manufacture high-performance athletic footwear.
We have a broad portfolio and just really excited about what the future holds for us. If you look at our outlook, it has been, and we expect our composite portfolio to really grow double digits for the foreseeable future, be a primary growth driver for Specialty Engineered Materials, but also be an enabler for Avient to deliver significant growth and sustainable growth going forward. With that, I really appreciate your time, and Matt and I are happy to take any questions that you might have.
Thank you. Just a quick question, I guess, on the 10%, I was wondering if you could give us a little bit more color by the end markets that you see within composites, whether it's Fiber-Line or how do you break that down, that opportunity as we look forward?
Yeah, if you split out our fibers business, which Matt has responsibility for, and the balance of the composites business, they're both in roughly this 10% growth range.
I guess one other area I wanted to ask about was just the competitive environment within that fiber optics market. How do you see that, and what is the Avient, I guess, opportunity or advantage there?
We really have a very unique blend of multiple products. We don't have a lot of competitors that have the full portfolio that we do. We tend to compete with different people in the different product lines. It really gives us a great competitive advantage, though, because as we go and talk to the fiber optic cable producers, we have a number of different offerings to help them meet their challenges. We really are in a very differentiated position versus all our competition. Like I said, they tend to be broken up by different suppliers in different parts of the cable.
Question here.
Thank you. Hey, Chris. Mike Sison, Wells Fargo.
Mike.
You spent a lot of your career using carbon fiber in terms of composites. A lot of your offerings are not carbon fiber. Is that an opportunity to build longer term? How would you do that? The one public player is mostly aerospace.
Yeah.
Yeah, when you look at these end markets, how do you get that part in your portfolio, and does it matter? Maybe you don't want to get into that part.
Yeah, you're right. The vast majority of our applications are glass or aramid, and as you know, there's plenty of carbon fiber out there, most of it being very high performance and focused on aerospace, and for good reason. That's where it should go. I think we do have opportunity. I think if you look at our markets, I think it's always going to be a mix of fibers. I think as industrial carbon fiber really gets more mature and more available, I think that will open up some opportunities for us. Okay, well, looks like we have no more questions, and I really appreciate your time. We're going to transition to another and Woon Keat Moh will be up here to talk about emerging regions. Thank you.
Well, good morning, everyone. Great to see all of you here today. I'm Woon Keat Moh. I'm the president of Color, Additives and Inks for the Americas and Asia region. I've been with Avient for 11 years now, and before Avient, I was actually with Clariant Color for 11 years. I'm actually in a unique position to say that I've been with the company for 22 years. I've always been based in Asia. Now I've just recently moved to Cleveland. Recently means just a few months ago. I won't say I'm looking forward to it, but I will be experiencing my first winter in Cleveland. Not really excited about it, but hey, I'm really excited to be here today to share with you the growth that we are seeing in Asia and Latin America.
All of you are well aware, as a global company, we have presence across all the regions. It is important not only to allow us to better serve our global customers in all those regions, but also our local customers in those regions. Even though we have heavy presence in mature economies in the U.S. and Europe, we are seeing a lot of growing opportunities and growth in the developing economies of Asia and Latin America. It is going to be important for us to be able to capitalize on those growth. Even though the uniqueness of the region actually brings a lot of complexity, we are embracing the diversity and capturing the growth opportunities. On the left side of this chart, you can see the revenue breakdown that we have in the different regions.
You can see, as I mentioned, our largest region is actually in the U.S. and Canada, followed by EMEA, which is Europe, Middle East, and Africa. On the right side, you will see the projected GDP growth of the regions. It's interesting to point out, you can see Asia and Latin America actually is projected to grow at a rapid phase than the U.S. Let's take a walk through the regions. Let's start with Asia. Asia is huge, if you think about it. You have China and India, two most populous country in the world in one continent. We really view Asia as three subregions: China, Southeast Asia, and India. Let's start with China. China, number one in terms of population in the world, 1.4 billion population, and the second largest economy in the world.
I think really the main question that everyone might have is really, how has the recent U.S.-China trade tensions impacted the Chinese economy? I'll use the foreign direct investment as an indicator. This year, the foreign investment that's going into China is forecasted to grow 9% over prior year. You could also say prior year 2020, the pandemic year, might not be ordinary. Using 2020 comparing to 2019, there was actually an increase of 6%. As you can see, there is a healthy, consistent foreign investment that's going to China. Again, confidence in terms of the Chinese economy. It is also a known fact that China follows a blueprint when it comes to rollout of initiatives and policies in terms of how they grow the economy. It's called the Five-Year Plan.
It is actually on the 14th Five-Year Plan right now, this plan runs from 2021, which is this year, to 2025. In this plan, there's a few call-outs that I want to point out here. On a high level, there's going to be a focus on infrastructure, sustainability, manufacturing competitiveness, and digital economy. There's two key highlights in terms of infrastructure, the focus on investment in infrastructure. This time around, it's not just going to be building more roads, more high-speed railway tracks. There's a specific call-out that there is investment going into science and technology infrastructure. What does this mean? It means accelerating the adoption of Internet of Things. That translate to enable Internet of Things to happen, would be embracing the 5G technology. 5G technology, for it to happen, you will need 5G networks, you will need 5G-enabled devices.
As you heard from Chris and Matt earlier, we do have existing solutions in for 5G, and we are continuing to develop solutions for the 5G ecosystem, which really translate into more opportunities for us. On the sustainability end, there's going to be investment in infrastructure for renewable energy. It's going to be more solar farms coming up. Again, need for materials that's going to support the infrastructure for solar farms. The other one is on adoption and production of electric vehicles. There's going to be push for further adoption of electric vehicles in China. Just to give context, this year, North America, we are forecasted to sell 600,000 units of electric vehicles. Remember, there's still computer chip challenges that's impacting the automotive industry, so it's also impacting the electrical vehicle car production.
In China, this year is forecasted to be 2.4 million units Vehicles. On a bad year, four times. Electric vehicles also creates opportunities for us where you have heard from Walter earlier as well, lightweighting solutions and the need for new materials as well. In this 14th Five-Year Plan, there is also a call in terms of a new strategy called the dual circulation strategy. In a nutshell, what it really means is that China will welcome foreign investment, continue to welcome foreign investment, but at the same time, there's going to be a focus on driving domestic consumption. What this is going to do is that it's going to increase the prominence of the local and regional brands.
Imagine a market with 1.4 billion consumer, we have been establishing relationship with the local brand owners, which allows us to grow with them as they continue to grow. Let's move to the next region, which is Southeast Asia. Southeast Asia is really a combination of 10 countries. The 10 countries have also formed an economic bloc, which are also well known, which is ASEAN. The total population in Southeast Asia is close to 670 million people. This region has really gained a lot of prominence recently because companies have started to adopt the China Plus One strategy. What it really means is that a lot of the companies are having a manufacturing site out of China, and that's really to mitigate the risk of the tariffs.
Because of the proximity of the Southeast Asian countries with China, it allows the companies to continue to tap onto the mature supply chain from China in terms of raw materials and parts. There's a lot of investment going into Vietnam, Indonesia, and manufacturing will be a key driver of growth for this region. This region also has a good balance of economies. There's a mature economy like Singapore, and developing economies like Thailand, Vietnam and Indonesia. Indonesia is interesting. Indonesia, growing economy, but what is interesting is that it is forecasted that Indonesia will have the fourth largest middle class population in the world. That's after U.S., China and India. As the middle class population in this region continues to grow, there's going to be increase in demand for better quality products, better quality service and better healthcare.
That all means opportunities for us because those are our focus areas. As you heard from Cathy as well earlier this today in terms of how we are focused in growing healthcare. What have we done over the last 10 years in China and Southeast Asia? We have doubled our footprint, and we increase our commercial resources by 2.5 times. That is important because having close proximity to our customers and also having the commercial resources, that allows us to quickly react and respond to the need of our customers or speak to market. It allows us to quickly have a short turnaround time on color designs, which is critical for our customers in this region. We have also invested in a regional headquarters and innovation center in Shanghai back in 2015.
That allows us to tap into the local talents to develop and innovate solutions that actually fit the region. That has also helped us to grow. All these activities has actually helped us to grow by 3 times in this region. We are not resting on our laurels, we have continued to invest. One recent example is our new manufacturing site that we have invested in Suzhou, China. It's strategically located. It's actually west of the eastern seaboard. This site actually allows us to serve customers in West China and East China. This site is one of the largest site within Avient. It's actually 714,000 sq ft. What we are proud about this site is that we actually finished construction of the site in 18 months, and that's during a pandemic year.
The site is expected to support revenue of over $60 million by 2025. The other piece that I mentioned about the growing middle class population and the demand for better quality healthcare. We are well-positioned because we have healthcare accredited site in the region in Singapore. Our Singapore facility is actually healthcare accredited. What we would continue to do is increase the capacity and enhance the capability there. In addition to that, we will also increase sites in the region to be healthcare accredited to support this growing demand. Moving on to the next region, India. India, 2nd populous country in the world right now. Even though indication says it's going to exceed China by 2030, based on the current slowing birth rates that we are seeing in China, I think India is going to pass China probably by 2025.
What is really important about in terms of the population size of that size, right, is that it actually has 1 of the youngest population in the world. The average of the population is 29. What that allows is that huge talent pool. Continues to feed a talent pool, which allows us to tap into. India has a lot of initiatives as well. Make in India, Digital India, that's driving a lot of manufacturing investment and services investment as well, which also means that there is a growing middle class population in India. As I mentioned Young population allows us to continue to grow that population, which really translates into potential opportunity for us as this middle class population grows up, where there's going to be a need for better quality products. From basic to better quality products. What have we done in India?
We have grown our presence in India. We have four plants right now in India. We have increased our commercial resources. In India, right now, a lot of the activities are centered around West India, but we are seeing a lot of opportunities and activities going into North and South India. We will continue to invest in our commercial resources to make sure that we are able to capture those opportunities in North and South India. That's going to be a focus. As I mentioned, in terms of the growing talent pool, we are going to leverage on it, and which is also one of the factors why we are putting an innovation center in India to leverage on that. Our chief technology officer, Vinod Parekh, is going to share more on this exciting new investment later on.
Let's move to a region that is closer to us, which is in Latin America. Latin America has a population of about 662 million. If you remember earlier, it's almost close to the size of Southeast Asia, but it has more complexity because Latin America has 33 countries and 15 dependent territories. Even though with the complexity, top six economies in this region actually generates 75% of the GDP for the whole region. What is another interesting fact is that we have presence in these six countries, not only from commercial resources, but we actually have manufacturing sites located in these six countries.
The entire region is expected to continue to grow, Mexico being the hub of manufacturing for North America, we are seeing a lot of activities that's going into it will continue to have a lot of activities where we will see a growth in the middle class population, which will drive opportunities for us as well. What have we done in Latin America so far? We have actually double our footprint, we have invested four or five times in terms of commercial resources. It's a great return of investment for us because we have actually grew revenue by over 20 times. We have continued to focus on investing into our facilities in terms of capacity-wise and also enhancing our capability as well to make sure that we are able to capitalize on the growth of the middle class population in the region.
In summary, we have been laying the foundation and building on it. We have been growing successfully. Clariant Color has actually also helped us to increase and expanded the presence in all these regions. We're going to continue to focus on the strategy of delighting our customers, having short turnaround time for our customers to enable them speed to market, because that's critical in all these regions. Also focus on local and regional brand owners. As they grow, we grow with them. Not forgetting, we also have local leaders that are in the region who understands the need of the regions and which allows us to actually respond and react quickly to the needs of the region.
In all, we have shown that we have proven that we are able to grow. In combination with the strong macroeconomic driver that you're seeing, we are well-positioned to capitalize on the growth of these regions. With that, thank you for your time and attention. I'll be happy to answer any questions that you might have right now or later.
Hi. Thank you for the comments. Kristen Owen from Oppenheimer. Just wanted to ask you about the competitive positioning in these regions and how you intend to protect your price and continue to protect your IP.
Great question. In terms of competitive landscape, yes. There's a lot of local and regional competitors. What's really differentiate us is that we are focused not so much on the general purpose market, right? We are focused on specialty, which is why I emphasize in terms of what we are doing from color designs and additive solutions that we have focused on. That really differentiate us from the competition. Now, going back to your question in terms of how we are protecting our IP. As you can see, we are developing innovation centers across the regions. We are developing formulations within that region. We do have a strong system that actually protects our formulation from our competition. I do believe that our current system is able to protect our IP.
My follow-up question is just related to this last slide here. You've noted that 5% CAGR excluding sustainable solutions. Can you just clarify what is included in those sustainable solutions? Is that from the packaging side? Is that 5G? Just help us understand the mix of that 8%-10%.
There's a mix of both from packaging, of course, and mainly packaging because as the developing regions are mainly focused on packaging. I would say there is more packaging in that sustainable number versus 5G.
Hi. Thank you, Angel Castillo with Morgan Stanley. Just a quick question around just the growth overall. You noted the manufacturing that was just commissioned to kind of get you at least 460, I think was the number, $460 million or support $460 million in revenue by 2025. It seems like that alone could be meaningful growth, just filling up that plant. As you think about, you talked about investing in capacity. What else is there left that you need to do to invest in? Is it commercial? Is it brand relationships? Because it seems like the capacity has kind of gotten there to some degree, just with that plant alone to kind of help you get that 10% growth.
Yes, great question. The different regions have different dynamics, right? In Latin America, for example, definitely with the growth that we are expecting, we would definitely need to invest in capacity, not only in commercial resources. What we have over in China or Southeast Asia, for example, we do have the capacity to handle the expected growth. What we need to do is really investing into technology resources, right? As Michael alluded to earlier as well, in terms of shifting resources, how we can do better from a color design standpoint, we can shift resources to focus on innovation. That's going to be a focus for China and Southeast Asia, investment into resources, especially from a technology standpoint. India definitely will also need to invest into capacity because we have momentum right now. We are growing that region.
We do need to focus on that. Yeah, Frank.
Frank Mitsch, Fermium Research. Love the geographic breakdown. 50% North America, 25% of sales in EMEA, and 25, the business that you recover. What's CapEx at Avient breakdown geographically 2022, 2023, 2024? How are you thinking about your investment regionally?
I would say the breakdown could be similar. In overall, there are also CapEx investment that's going from a corporate standpoint, that's going to help across all the regions. I would say specifically in the regions, it would be similar in terms of what we are seeing from a revenue standpoint. There is definitely more CapEx going into our growing regions because we are seeing more growth in Asia. Asia does actually has more of the CapEx allocation.
I would make just one clarification to that, which is that in that pie chart they showed on revenue breakdown, obviously we have a distribution business which is predominantly in the U.S. If you took $1.5 billion out of that and then did your new pie chart, all the CapEx really goes into Color and Engineered Materials. It does break down, I think, reasonably close by region. There's more obviously going into India with the innovation center that Vinod's going to talk about, and so on. Largely, it does break down by region.
Mike.
Michael Harrison with Seaport Research Partners. I'm curious, very impressive looking slide here showing that we've gone from, in some cases, very close to zero revenue, to pretty substantial growth over the past 10 years. Can you talk a little bit about how margins have performed over time? Have we reached a peak yet, or are we still in a phase where there's a lot of investments and spending? You mentioned the commercial resource expansion. Are we at a point yet where we have leveraged those resources and seen that show up in the margins, or is there still substantial margin improvement to come? Maybe on the China plant that's starting up, is that something that could negatively impact your margin until utilization picks up, until that plant is filled up?
Thanks, Mike. First off, in terms of a margin expansion, the margin expansion is really good because our average margins for the regions is similar or high to our business. From a margin standpoint, we are at a level where we are very comfortable with, and definitely there's room to continue to expand on it. In terms of the Suzhou site that I mentioned just now, is just one of the facility of our 11 sites that we have in China. It will not have a negative impact on our margins because it's accretive to it. Remember, in terms of how we are filling it up, we are filling up at a pretty good pace, and we do believe that it will not be negatively impacting our margins. I got a wave.
I'm sure if there's any additional questions later on, I'll be more than happy to answer it later on. We'll have a short video, and our Chief Technology Officer, Vinod Parekh, is going to share with us in terms of where our innovation is next.
I think it's perfect timing. It's almost noon. Good afternoon, everyone. I'm Vinod Parekh, Senior Vice President and Chief Technology Officer. I'm actually the latest addition to the team. I've been here for 191 days and 12 hours, to be on time. I'm excited and honored to be here, to let you look into my crystal ball to see what the future holds for Avient. Before we get to that, let me talk about myself. I come from a background of semiconductors. I've been in semiconductor industries for 25 plus years. I have a PhD in quantum engineering. It's a unique topic. Then I started my career with SanDisk Corporation, which was a startup that wanted to get into flash memories. Probably you all have some SanDisk cards in your drives.
From there, I moved on to Applied Materials, which is a major semiconductor equipment company. I was in a startup before I joined Avient. You'll all be thinking in your minds, "What does a semiconductor guy have to do with a formulating company?" Hold on your thoughts. I think the slides will talk to it. We'll come back at the end. So far you've heard from the presidents. They talked about sustainable solutions. Cathy talked in extents about healthcare. Chris talked about composites and mostly 5G, where are we going to go with 5G. We talked about growth in Asia and Latin America. I want to show what we have in the pipeline from these platforms, right? We have about 236 projects in these platforms. Out of that, 191 are in sustainable solutions. Just tells a lot about Avient.
We really think sustainability is the biggest lever for innovation. I believe without sustainability, there is no innovation. That's your real holy grail. Most of our projects, almost 80% of them, are trying to address sustainable solutions, and we are only going to increase this as we go forward. With that, let me tell what's coming next. Before we go there, I want to talk about a topic called paradigm shift, which you might be all familiar with. I'm talking about paradigm shift that's happening with material science. If you look at any great advancement in technology, it always has to connect to a breakthrough in material science. Right? We'll talk about some examples. I want to talk something that's closer to my heart, which I have done in the past. Electronics, right?
This is a classic image of the first supercomputer that was built in 1960. Remember, the transistor was only invented in 1947, and just within 13 years they built a supercomputer that could do massive calculations. It was ginormous. It's big. It's bigger than the people sitting there. Guess everyone in our room has something that's much faster, and much powerful than those things. What happened? The laws of physics or chemistry never changed. They've been the same. It's really about material science and advancement. People come up with new materials, how to tackle it, and then you advance forward. Today's cell phones that you carry or your MacBook Pros, they have 16 billion transistors. It's only a few decades since the transistor was invented. How are people able to do this? How you are not violating boundaries? Is by really driving material science.
That's what got us to here. Now the question is, what is next, right? What is the next leap step that's going to happen? It still is going to be in material science, but it's going to be to a class of materials that's called metamaterials. I want to use a quote from "Nature," one of the most prestigious journals in science, that quotes metamaterials. At the core, it's a composite material, but it's rationally designed so that the effective material properties or parameters go beyond that of ingredient materials. It sounds big. It's not really big. It's composite materials. Chris talked about how well we are doing in the composite materials. That's why I believe Avient has a very strong position here because of the enormous properties and parameters and engineered materials and additives that we have that can fall into these categories.
The real winner is who's able to identify these and bring these to the market. Right? It kind of ties to our innovation concept. It's not like you go out, try to innovate something new, but you actually constantly look into your toolbox. You empathize with your customers, see what is their pain point, and try to address with it. Customization is the mother of innovation, not try to create new products all the time. Sometimes you have to do it. With that, I want to talk about the market opportunity that this metamaterials has. This is a quote from Lux Research that does this research on different materials. They believe that the U.S. market is about $13 trillion opportunities for this metamaterials. We are focused most on the $3 trillion market that is highlighted out. That's 5G infrastructure, vehicle electrification, IoT wearables, and healthcare.
5G, Matt talked about 5G. We are in the 4G plus regime. We are going into 5G and 6G that only needs more better materials. Low dissipation factor, right? Low latency. How do you get those materials? We have those properties in some of our engineered materials. The key is how do you connect them and put them into wire and cable and applications. Vehicle electrification. The biggest thing that drives electrification is battery technology. When the first electric car came, most of us did not even believe in it. We thought, "Oh, I have a V12 engine. That's probably the biggest powerful engine." Now you can tell Tesla kicks up. It's much faster than any V12 out there. What people want more is, how can I go 600 miles, and how can I charge in 15 minutes, right? What does that mean?
Means you have to drive a lot of current in a very short time to charge a battery that'll take you to that distance. Again, it's management of thermal properties, right? How can you charge a battery that fast and not fry other electronics? How do you make sure you do not have interference between these properties or these materials? It's really at the bottom of material science and how you develop those. IoT wearables, I believe all of us have some kind of Fitbit or an Oura Ring, something that's monitoring us, helping us to look at what's my heart rate, what's my blood pressure in the morning, and so on. The healthcare has completely changed, as Cathy mentioned. It went from hospital-centric to patient-centric. We are our own doctors.
Today, you can talk to a doctor on a Zoom video to get fully diagnosed and whatever you need, go get your test done, have your medication sent to your CVS Pharmacy or whatever your local pharmacy is, right? Technology is advancing it, but along with that, it's always material science that's driving it. There's a lot of these opportunities where we believe that Avient can play a major role. With that, I think your question would be, how does Avient create or capture value, right? It's really about adaptation. I believe that we have the engineering material solutions in our toolbox. I'm not going to go create a new material that's going to solve some problem there. We're going to look at what we have, customize it so that we can apply to it. That's your fastest low-hanging fruit.
Sometimes, of course, you have to go and create something new. I'll talk about some of these potential disruptive markets that we're going to focus on. This is for future within corporate technology, where that we want to focus, where we want to be five years from now, 10 years from now. We'll focus on semiconductors, robotics. With robotics, I'm referring to robotics in healthcare, and healthcare and AI. The reason why we focus on semiconductors, you already know, right? Big companies like Samsung, TSMC, have already announced major investment in the U.S. We are talking about tens of billions of dollars, either in the state of Arizona or in the state of Texas, right? The chip shortage is a big problem. Human beings are the biggest consumers of data, right? We'll never have enough of our cell phone. We'll never have enough of bandwidth.
We always want more. We want to be faster. We want to do more. I have a 1 gig internet, and sometimes my bandwidth is so bad because my kid is doing multitasking with his iPad and his Xbox game and whatever, I have to go and turn off the router so that I have some bandwidth to do my work. That's how it is. It was not that 10 years ago. It's like it'll never be enough, right? Because all devices are trying to connect to each other, it's all Internet of Things is all connected to each other, so bandwidth requirement is there. Processing comes to that perspective. Robotics in healthcare, I believe that there will be a phase where we will have robotics solving some of our processes or medical issues.
For example, if you have a cancer that's locally be treatable, there could be places or in the future where you might have devices that would just treat just the local areas using robotics so that you don't have to go through chemo or a full body exposure. Healthcare, again, is completely changing from what we are today, right? AI. AI is really semiconductors on steroids. It's really trying to do high computing with very low power. It's all about parallelism, right? Just like us, because we can multitask. Most of us multitask. We're talking, we're typing, we're listening. Some people can listen to music and still write papers and so on, right? It's all about parallelism, and that's what AI is trying to be. It's trying to be like you and me, or even smarter than you and me.
I hope we don't get to that case, that we still be the smarter one than AI. You can imagine all these disruptive markets are interconnected, and they all have a massive innovation needs. It makes absolute sense that we play in those areas if we have the toolbox, if we have materials to play. It's really two things, right? I'm a big fan of Dr. Seuss, and I've read a lot of Dr. Seuss books. It's all probably because of my kid as well. But one quote I always stick in my mind is, "Imagine what you can do." I think it's very simple, but it's very unique. In these fields, what can I do to get there? I think that's the first thing. The second thing is really believe that you can do that, right?
Once you have these two, I think the sky is the limit and you can go into these markets. With that, I'll talk about, okay, we talked about what we are innovating and which fields. I'll give you a glimpse. This is the crystal ball. I'll give you a glimpse of what are our platform technologies that we have today that we can take and apply right away today. I don't have to wait. I just have to make sure my platforms are customized to go there. For example, the top two, they are connected because it's robotics and healthcare. If you look at those, for example, let's talk about ambient control, either in robotics or biopharming packaging. Michael Garratt talked about various scavenging technologies that we have today in the packaging industry, O2 scavenging, UV blocker, right?
We can totally apply those to biopharming packaging because people want to get away from glass bottle vials. How do you make that happen? Glass is a very good blocker of all the things. Is there a polymer that can do that? Yes, absolutely, we have the solutions. We just have to make sure that we meet all the requirements with additional to the FDA approvals and so on. Once we have that's a lateral tangent that can go on. Other things like functionalized biocompatible resins, right? We have a huge portfolio in advanced elastomers and composites, which has these functional characteristics that we can apply to get into these fields. Let's look down into the two buckets of semiconductors and AI. I talked about semiconductors is really driving computation power.
Power is I squared R, and I squared is the current that flows through any chip that generates heat. It's really all about controlling how much heat the chip generates and how you dissipate it. You all remember in the past, when your computers were slow or sluggish, they get so hot. Can you feel it? You put it on your lap and you're doing something, it gets hotter and hotter. It's because it's just the thermal management of the chips are limited. Today, they have come with technologies to control it, but I believe the requirement is going to be even much higher. That's where we have unique technologies that can actually completely shield the heat from transferring from one chip to the other. This is where polymeric materials or these new engineered materials would play a major role. Load dissipation.
We talked about 5G, the next generation 5G or 6G, which are, we are talking in the order of few hundred gigahertz transmission speed. Anytime you transmit something through a wire, what do you want? Is you want to have minimum loss of signal. That means you don't have to boost up the signal to send it through long areas. If you can reduce the dissipation, then you can send the signals with very low power to long areas, that's what is the driving factor for 5G plus and 6G. We have some of those capabilities within us which can do those dissipation, low dissipation factor. EMI shielding, electromagnetic interference shielding. You have seen that when you put your phone next to your radio, your radio picks the noise. Remember?
Like in the older days or when you're in a conference call, you have your phone very close to that Polycom, the old receiver, you'll hear the static noise. That's the EMI shielding. We didn't care about it those times because you just move the phone, you're fine. When you have chips sitting next to each other, you can't just move a chip. You need to shield it. Today, they shield it by using metal. They're basically using aluminum metal and shield it off. It's great. That doesn't work when they get the density of the chips much tighter. Intel, TSMC, these guys are talking about three nanometer, four nanometer transistor technology. This is very small, trying to get them very close. We have materials that can actually go in there. Those are areas where we could go in. Again, the opportunities are limited.
It's really looking at how you have adapt what you have, customize it to go into this market. Of course, we will also look at some new technologies, like for example, these advanced barrier technologies that have certain requirements, which I will not share here because it's our IP still at this point. We are working on those. Functional additives. There is a whole industry that's revolving around additive manufacturing, and that all really relies on functional additives. Again, that's a whole strength of Avient. That's why Avient is really fit. We are really a formulator. We are not a base resin maker. We don't go after base resins. We really come, say, "This is what the customer wants. This is the base resin. I have few additives. I'm going to put in boom, boom.
I'm going to give you 3 of those metrics." You want EMI? Okay, there you go. You want low dissipation? There you go. You want thermal management? There you go. If you want electrical conductivity, I can give it. The battery technologies, all these needs multiple requirements, and that's where by blending this properly, picking the right formulation, we can get there. I can tell you, I'm only here for 6 months. I have seen the talent that this team has. We've only have 1,000 scientists with 100 PhDs. They can come with ideas really fast, and we really innovate at a pace that I'm very happy to see where we are. We always have brainstorming sessions. We have 4 hours, we can hash out 250 ideas. I'm not kidding. 250 ideas in 4 hours. We work follow on to see where we can go in there.
We have to take it to a much bigger level because some of these markets move really, really fast. You already know. Semiconductors, as they say, a chip is almost like having a baby. You only have nine months, you need to have the next chip. They won't wait for 18 months. Other industries can work for two years, three years, and get there. How do you go from our pace today to go there? That's why we need to have a lot more global innovation presence, and that's where I'm leading to the next slide. More talk a little bit about our innovation center that we're going to have in India. It's called Innovative Sustainable Holistic Accelerator. We really want to look at holistic approaches to really drive innovation.
The reason this is in India has nothing to do with the fact that I came from India. It's because of other reasons. First thing is the young population that we have in India that are talented, willing to work on these areas to really drive innovation for us. Most importantly, we already have a manufacturing site, and there is a land right next to it. We could build an R&D center that is working within India to drive some of these innovations. Again, all the disruptive markets that I talked about, semiconductors, AI, robotics, healthcare, guess what? All of the disruptions are happening in Asia. I wish some of them were happening in the U.S., and the U.S. government is taking steps to bring it back in. Today, mostly it's happening in Asia. Either it's in Singapore or it's in Taiwan, Korea, and China.
India is a very good epicenter to drive these innovations. Lastly, these are all highly capital-intensive markets. It's very hard for Avient to go and jump into semiconductors tomorrow because we just have to buy all those tools. We cannot do that. Being in India gives us access to universities like IITs, where we are able to access the state-of-the-art tools by putting our own people in there, having our PhD students in there, driving innovation, doing this for us. That way, we don't have to do a huge lot of capital investment into those semiconductor equipment tools or healthcare-related tools. We could focus our investment on our processing requirements, like our extrusion lines or our materials. That's where we can spend. Still, there is a reasonable amount of CapEx that we're going to spend within corporate technology in India and globally.
This is all one group. There is no India and U.S. and Europe doing separately. We are all knitted together in this together. In India, apart from doing the R&D resource, we are also going to focus on supporting our existing businesses. Colors and SEM, and India itself have their own business that we are running in India, and sometimes it helps to do some of our rapid customer requests or raw material formulations in India so that the teams in the U.S. and Europe can actually deploy those resources into pure R&D. It's a very good package. Finally, the cost of doing R&D in India is definitely much cheaper than doing it elsewhere. All these factors makes us believe that this is a very good investment for us, and that's something that the board has also approved for us to go forward with.
We talked about innovation, we talked about where we're going to do and how we're going to do, and I want to talk about, you all want to know, where is this going to lead us. I believe that we would see 11% CAGR growth from our innovations over the next five years. There is no doubt this we will get. How do I say that? Is because of the world-class vitality index numbers that we have, 35%. That tells us that all the projects that we have in the pipeline for the next five years are all going to be solid gold. I can tell that today. This is all going to be solid gold. They'll make it. That's why that vitality index gives us that confidence to get there.
With that, I want to come back to the first question that probably pondered your mind. Why is a guy from semiconductors here in Avient? Now you see the dots and why I'm here. It's because material science development is key for any technology. I am deeply tied into innovation. It's me to say. When I look at Avient, the culture, the talent that we have and the mindset, and again, the various possibilities that we have within different BUs, all of these can be tied into these markets. It's really taking them, customizing them, and applying them, and that's why I'm very happy to be here, and I believe this is the right place for me. With that, I'll stop, and I'll take any questions that you may have.
Hi, thank you for the presentation. You really highlighted a lot of the talent that's being placed in driving innovation. I'm wondering from your position as CTO, what you're thinking about in terms of the digital infrastructure that needs to exist within the organization to apply that same sort of blueprint that we saw in examples like InstaColor to the vast library of innovation that already exists within the organization today.
Thank you. That's a very good question. I did not touch that today. I'm also a big part on data. We actually have a huge data science within corporate technology. What we use it, we are using data to predict some of our experiments and DOEs. For example, we are able to predict our formulations without not having to do DOE. We are able to predict opportunities that we get. Predictive analysis is a key, and we actually monitor all of our innovations through a digital software that we use. We also have a software that looks at ideation phases, looks at our stage gate processes. We have different stage gate processes for different products. Ideation cannot be a typical 5-stage gate, a shorter one that really sees how fast and feasible you are. We have periodic brainstorming sessions, like I talked about.
All these are available on a shared data folder. We have this globally, not just in one place. We have folks from every place to work together. Our IP portfolio is really strong, and we try to even beef it up by doing this. We ask people to collaborate outside the group on purpose, and we have them all on a data center so that you're able to see. I think by doing this, we are able to keep the digital up. It's not as good as a high-tech company from where I come from, but this is a very good starting point, I believe. I think as we grow and as we get into these markets, all these things will be digitalized.
Anybody that fits into our shoes later in the career are able to see what the company has done and where we are going forward. Okay, I think that's my cue. With that, I would like to pass on to my colleague and our superstar, our Chief Financial Officer, Jamie Beggs.
Nice job, Vinod. Thank you so much for the very kind introduction. Like you said, my name's Jamie Beggs. I'm Senior Vice President and Chief Financial Officer. As we were preparing for today, I have to say that I was sorely disappointed that I didn't get an intro video. I didn't get cool walk-up music. I just had to follow Vinod, which he's a very hard act to follow. I joined Avient a little over a year ago, and what you heard about today is exactly one of the reasons why I decided to join the company and relocate to Cleveland. It's about growth and transformation. Take a look at what we're set to deliver in 2021. Record EPS of $3 per share. If we rewind back to 2020 at the height of the pandemic, while most companies went backwards, we grew.
In fact, virtually every quarter since the Clariant acquisition, we have posted record results. The decade-long strategy of transforming our portfolio towards specialty products and high-end growth markets has reached an inflection point. We've been deliberate about where we've invested resources, what technologies we developed, and of course, been strategic on the M&A front with acquisitions like Clariant and divestitures like PP&S. This has enabled us to align ourselves to the four key growth drivers that you've heard about today, all of which have fueled the performance during the current year, as well as, most importantly, has set a foundation for future steady growth. This has transcended across all of our segments, all of which have outperformed during the year. We've been able to execute this strategy against a backdrop of very challenging conditions.
Unprecedented inflation, lack of raw material availability, and significant labor shortages has created headwinds of more than $300 million. We are one of the few companies that went early with a series of price increases that have more than offset this inflation. It's also covered the other myriad of costs that we've incurred in order to provide world-class service and products to our customers around the globe. Delivering short-term performance is not the only part of our strategy. It is also delivering long-term value. Beyond EPS growth, EBITDA margin expansion, and generating a high level of free cash flow, we have also been prioritizing our capital towards higher returning investments that have, and will continue, to outperform. The fact is, our portfolio transformation has created tremendous value for our shareholders.
From underlying share performance to 11 consecutive years of dividend increases, as well as over $1 billion of share repurchases. Our balance sheet is in a fabulous position to continue these investments to create value for our shareholders, as we look for acquisitions to expand our sustainable solutions portfolio, as well as increase the breadth of our composite technologies. I can tell you this, our company has never been in a better position to excel, to thrive, and to grow. That takes me back to why are we here today. The growth you've heard about isn't about share shift or cost-cutting. Although, if you've followed Avient for a while, it has been the hallmark of some of our historical success. The growth you've heard about today is the demand we see for our solutions to solve the world's most challenging material science problems.
For each of the growth drivers that you've heard about today, we've provided three sets of information. First, we provided market data as an external data point of the demand that we're seeing. Second, we provided historical performance to provide confidence in our ability to execute. Lastly, we've also provided our growth projections for the 6.5% annual growth that we expect over the long run. Let's do a quick recap of each of the four growth drivers. First, sustainable solutions. This is the single largest opportunity that we have as a company. We've never seen so much customer pull as brand owners race to meet their commitments to use more recycled content. It is the number 1 inbound that we get from our packaging customers.
As we talked about today, if there was enough recycled content to meet these commitments they've laid out, the growth rates that you see on this slide would be grossly understated. However, this provides us an elongated opportunity to grow double digits for years to come. This is only 1 end market. There are several other end markets and applications that want to use more recycled content, and they're going to run into the same challenges as the brand owners, and we have the solutions to be able to help them. Increasing the use of recycled content is only 1 of the 8 ways that we help our customers reach their sustainability goals. We have the technical know-how and product portfolio to drive 8%-12% growth into the future. On the healthcare front, this industry really has accelerated during the pandemic.
Many of us are a lot more comfortable with virtual care, and a lot of us are taking a significant amount of ownership in our own health. This has driven a significant increase in the number of wearable devices being produced, the types and breadth of disposable applications, as well as increased performance requirements. Cathy mentioned that we have over 15 years of developing long-standing relationships with key OEMs, and as they adapt to the changing evolution of this space, we're in a great position to grow 8%-10% into the future, which is consistent with what we've grown in the past, and obviously well-positioned to do so continuously going forward. On the composites front, we've assembled a series of bolt-on acquisitions over the past few years to develop a portfolio of technologies that represent the next generation of wood, glass, and metal replacement.
We've also been deliberate about investing in resources to service industries like outdoor high performance, certain industrial applications, and of course, the telecommunications market. The rapid evolution of data transmission and the required infrastructure needed does represent 1 of the fastest-growing areas for our composites team. They are well on their path to deliver 10% sustained growth into the future. Lastly, our global footprint has benefited greatly from emerging regions. 10 years ago, we had little to no presence in China. I'm sorry, we had some presence in China and little to no presence in India and Latin America. We see ample opportunity to continue to grow, especially when you add on the growth drivers. Bernard talked about the other opportunity that we have with expanding our capabilities and also expanding the breadth of our resources in these regions.
We're well on our path, as you can see from our historic growth, to continue this 8%-10% growth. Even more importantly, if you strip those growth drivers out, there's still a very healthy level of demand that's going to really boost up how we expect to grow into the future. I want to pause for a minute on this slide. I think most of you guys have already started your models, and I want to be able to help you out a little bit, finance professional to finance professional. As we presented the growth drivers, we presented them in their entirety. That is the best way to describe what we're trying to go accomplish with our customers. As you can imagine, there is some overlap between some of the growth drivers. Let me give you an example.
Composites, as Chris mentioned, a lot of those applications go into lightweighting. Well, lightweighting is also a sustainable solution. For simplicity, we kept sustainable solutions whole, and where there's overlap between the other growth drivers, we took it out, and we applied it to our 2021 sales. This should provide a good basis for all your models. We've also conveniently put on the right-hand side the annual growth rates that have been talked about today to how we get to the 6.5%. It's also important for us to talk about margins. As you can imagine, we're producing a lot of value for our customers. As these solutions come into our portfolio, they do carry a higher contribution margin than our base business. As they become a larger part of our portfolio, they will be accretive to the segments.
In addition, Norbert talked about our synergies that we still have left to go get with the Clariant acquisition. That will also drive margin expansion for Color. As we take a look at both segments, both of them have margin targets of north of 20%, and they're well on their way to be able to achieve them. Where does this leave us? 6.5% growth with accretive margins will result in double-digit EBITDA growth and even higher double-digit EPS growth. As we continue to deliver these results consistently, you're going to see a multiple that is more akin to a formulator, like Bob mentioned earlier, which will result in a higher stock price, which goes back into why we're really here, which is to create value for our shareholders.
I hope you can see from today's presentation that I have a lot of confidence in my decision to bear the winters of the Midwest. This will be my second one coming up, Bernard and Moh. I can definitely say that I'm very proud of being part of this team. Ultimately, why I really came to Avient is because of culture. I will tell you this, from my experience, you do not get these types of results unless you have a high-performing team that is 100% aligned. I'm really glad that today gave us an opportunity for you to see some of the business leaders that I work with on an everyday basis. We have diverse perspectives. We collaborate, we challenge each other, we drive results, and hopefully, we inspire our teams to do the same. How are we actually going to accomplish all this?
I will tell you, we're going to do it together as a team. We are a great place to work, and I know how you guys write up your reports. That won't be the headline that comes out of today's discussion, but I can tell you that is the reason why Avient has been successful historically and why we're going to be successful in the future. Before I turn it over to Bob to wrap up the day for us, I'd love to take any questions that you may have. Hi, Mike.
Hi. Mike Harrison, Seaport Research Partners . Hey, Jamie, I noticed when you put up the EBITDA margin expansion goals, the 20%, didn't really see a time frame around that. If you could, can you speak to what the expectations are in terms of getting to that 20%?
Yeah, that's a great question. Thanks for asking it. We purposely haven't defined some of the time frames here because we do expect these things to take a little bit of time, because if you take a look at sustainable solutions, the timing of actually how some of those things come to fruition is not completely dependent on our ability to execute. Right? Both businesses, as you can see from looking at our historical performance, has increased those margins over time. But I would expect that within a two to four-year period, that's likely when we'll start to see those delivered more consistently.
Okay, just as a follow-up, as the supply chains normalize and product prices start to come down, what does that mean for your distribution business?
I would love to know when that would happen, first of all, because supply chain conditions have not gotten any better. Obviously, we're still struggling with a lot of raw material availability. From a core business, from the SEM and Color businesses, when we see deflation and hopefully some reprieve from all the work we have to do to get products to our customers, that's going to be a great opportunity for those businesses to hang on to margins, right? That's something that I think is going to be a tailwind for those two businesses. For distribution, it really comes into managing inventory, right? We do look to have margins in that 5%-6.5%. That's historically what they've been able to deliver, even in inflationary or deflationary environments.
As long as we're able to manage that inventory turn, to us, it's just good execution in distribution than it is about anything else on the inflation side. Hi, Mike.
Hey, Jamie. Just a question on the other GDP growth area that's about $2 billion in sales. A lot of times when I see that, there is potential for some of that to be slower. Maybe some of those technologies get older, customers change products and such. When you think about that $2 billion, is it all 2%-3%? Do you have higher growth rates in there? Is there some slower growth rates? Maybe talk how to keep that where you want it to be.
Maybe some perspective on that. The majority of distribution's in that number. If you take a look at distribution, it's mainly a U.S.-based business. We do have some business over in Asia. That will give you a good indication. Some of distribution's also in healthcare. As Cathy mentioned, a lot of our success in healthcare actually started in distribution. As we started to develop more customer relationships, those relationships transitioned over to our, I would say, more profitable businesses. That's how I would think about that, if you're taking a look at those areas. It's not because we see a certain industry or a certain technology not growing as fast. It's really the dynamics with distribution. Great. I'm really surprised I didn't get the 2022 budget numbers, so Oh, great.
Frank Mitsch
Frank
from Fermium Research. Just curious what your 2022 budget numbers. Seriously, I was going to ask about capital allocation and how should we think about uses of cash. You did put up a slide talking about buybacks and dividend hikes, et cetera.
Yes.
Can you enlighten us?
Well, I don't want to steal Bob's thunder, since he is definitely going to hit that. If he doesn't answer your question, I'm happy to come back on stage to be able to answer that for you. Yes. All right. Sounds good. Thank you.
Thank you.
Well, thank you again for your time and attention today at our Investor Day. I think one of the most important responsibilities that I have as CEO is to get the right people on the bus. I couldn't ask for a better team. It's the best team that we have ever had in this company. I think it does show in the results, but it's absolutely present at all times in our culture, and I can't echo enough what Jamie said at the end, with respect to this being a great place to work, how much that means to us, and how important I think that is to driving growth in the future. There really are only two other areas that I want to touch on before we conclude and take any final questions, one is capital allocation.
One area that I'm going to talk about briefly is acquisitions. When I think about how we put cash to work in the business, of course, we're going to fund our organic growth strategies in these four growth areas. We also really want to bring new technologies into the company and grow the business through acquisition. There's a dozen or so here on these slides. Obviously, we talked a lot about Clariant today being the largest in our history. These bolt-on acquisitions have really provided the background and the backdrop for us getting into new markets, helping us to build platforms like composites. Our expectation is that we'll continue to prioritize that. Of course, we want to continue to increase the dividend every year as we have before. Then ultimately, we can opportunistically buy back shares as well.
There's a slide in here that I already referenced with respect to Clariant. I don't intend to cover that again, but I do want to show you one on the bolt-on acquisitions. The investment thesis here is a bit different than with Clariant in the sense that oftentimes these bolt-ons are family-owned, smaller companies that have great technologies, need investment to grow. That's been a big focus for us, is adding commercial resources to help expand markets, improve the technology, ultimately increase sales and operating income from these businesses. You can see we've substantially increased the commercial resources of the composite bolt-on acquisitions we've done. By composite, I mean altogether. Substantially improved operating income and margins. Our expectation is that's going to continue to be an important part of our growth strategy.
While all the comments today have been around these growth areas and very much an organic story, we certainly will put capital to work for acquisitions in the future. Next, I just want to talk a little bit about valuation, and many of you have seen the peer slides that we've used in the past, I'll be referencing those again today. We are a specialty formulator, and as you heard today, very much focused on sustainable solutions. We're asset light. As a specialty formulator, we don't require a significant amount of capital investment. Even with respect to the things that we're doing from an innovation perspective, that's largely people. That's largely talent. One of the things that has come up through the course of this day a couple of times has been some questions around resources.
Just recall that in 2015, 2016, 2017, and so on, we were hiring commercial resources at 8%, 9% per year, and that's what's allowed us to be in the position that we are today to capitalize on these growth strategies. We have more to come with respect to people, but as you can see from an asset standpoint, we are asset light and compare quite favorably to the peer sets. We're also high touch, and you've heard this a few times today with respect to the number of associates that we have in technology roles. We outnumber sales. That really just tells you the importance that technology plays in engaging with our customers in literally thousands, if not millions of custom formulations.
When you combine Asset-light with high touch, expanding margins, all that results in very high free cash flow conversion, which again has us very favorable from a peer set perspective. Lastly, on margins. We've talked about our margin expansion opportunity. When I look at formulators versus the other specialty companies that are in here, what's interesting to note is that formulators don't necessarily always have the highest margins, but they do deliver consistently, right? They deliver consistently through cycles and as a result of that, command a higher multiple. We've talked a lot about the transformation of this company over the last 15 years. As a result of those transformational efforts, we have seen an expansion in our multiple, as you can see on the left-hand side of the slide. There's room to grow, and there's room to grow as a formulator.
Ultimately, what we intend to do is to consistently deliver on our results, be viewed as a formulator, and ultimately valued as a formulator. Key takeaways from today. Culture is everything. It all starts and ends with people. As I said, I've got the best team that I've ever had. We've got the best team worldwide that we've ever had. We are a specialty formulator. We do intend to consistently deliver on the goals that we've set today, generate a high level of free cash flow, put capital to work for select acquisitions, continue to invest in innovation, as I said, I think when we do all those things, we will be viewed as a formulator and valued as a formulator. With that, I'd love to take any remaining questions that you have today.
Thank you, Bob. Angel Castillo from Morgan Stanley. I just wanted to touch on growth. It seems like a lot of it, as we talked through a lot of the opportunities, seems like it's still kind of conservative and I think that that's typically the approach that you've taken in the past. As you think about, for example, like the Plus Factor, the $100 million opportunity there, and just kind of innovation as well, opportunity for premium pricing, how do you view that from a perspective of conservatism and incremental opportunity beyond that?
I think when Jamie was doing her recap, she commented on, for example, the growth assumptions around sustainable solutions, and Plus Factor is a big part of that. I think that there are some gating factors in there with respect to availability of recycled content. If we had all the recycled content that brand owners needed and wanted and could achieve their goals, I think we would blow ours away as well. The $100 million really is, I think, a very narrow focus at really just looking at brand owners. As you saw today, they won't always be able to go to 100% recycled content. It might be 25 or 50 and so on. I think that moderates that number.
At this point, we're focused on the brand owners and their stated commitments, but then there's all the other businesses out there and smaller customers who I just think don't have this as a priority yet. They will eventually, and I think that presents even more growth opportunity for us.
Just to follow up on that, one thing that struck me, again, there's a lot of growth here. In the past, I think part of the reason for maintaining the Distribution Segment has been the overlap and the kind of the exposure it gives you to some of your customers and also some of the kind of insight it might give you. As we look at the previous slides, one thing that strikes me is having that kind of Avient X Distribution and how much that kind of impacts how you screen from a margin perspective or just looking at other metrics. As you have such an opportunity from a growth perspective across the businesses, does it still make sense to have that Distribution Business? Or is there more opportunity to unlock value by separating that?
Look, I think the distribution business has been a great one for us over the years. Just look at the last year in particular, it did $70 million of EBITDA, and this year it's going to do $94 million. It has been growing well. I've always really appreciated and loved the interconnectivity between distribution and our other segments. Sometimes I think that investors may be under the impression that I would never consider doing something different, and that's just not true. I think at the present time, with the portfolio that we have, it's still a good fit for us. As I say, in the future, if there's a catalyst or things change and we feel differently about it, we could always change direction.
Hey, just wanted to ask first on the guidance for the long-range growth drivers and whatnot. That excludes any M&A in what you've outlined?
Correct. Yep.
Is there any sort of way of thinking about conceptually how you feel you'll be able to allocate capital over a three to five-year period and what kind of impact M&A may have on the business?
To me, acquisitions have been the hardest thing in the world to predict, right? You go through periods of time and you think, "Oh, my gosh, there's just absolutely nothing going on right now." Then all of a sudden you've got two or three that you could work on simultaneously. We've always found deals where we've put the right ones in place. We look at a lot. I'm very proud of the fact that we don't buy something just for the sake of doing so. We're very, I think, prudent with our capital. I would say that's gonna be the preponderance use of cash outside of, again, funding our organic growth initiatives. It's just really hard to say how you can model that in one year after the other.
Just to follow up on the M&A side. You made the choice, and it certainly played out well, to invest in the composite side, and you took the hit early on the margins and whatnot. Is that still something that you would consider doing in the future through M&A? Would you be willing to take that longer view and put in an investment that could be diluted for a while?
I think for the right opportunity, that would certainly make sense. I think we had a unique one five or six years ago with respect to two particular elements of composite technology, which you're correct, at the operating income level was not generating income. We were also adding cost, right, with respect to commercial resources to help bring that to fruition. I would never say never that that wouldn't happen again. When I think about where we want to grow and where we want to focus in M&A, I think for the most part, you're going to see us be bringing things in that are already at a positive operating income level. When you look at the bolt-ons, right, and those margins going from 9-21, I think that's the right framework to think about future bolt-ons.
I kind of want to come back to the 2022 question more from an earnings growth perspective. You've shared this view that long term, you expect to be able to deliver 15%+ EPS growth. I'm kind of curious, as we think about the $3 number for 2021 and then start to think about 2022, that puts us at like a $3.45 baseline. I also think about price versus cost having weighed on your margins and supply chain issues, et cetera, plus some additional synergies. Is 2022 kind of tracking toward higher than that 15% number as your baseline assumption, as you're starting to think about next year's budget?
I think the 15% is a good number to think about over a longer period of time. That's going to start next year, right? Next year is the first year of 15% plus. We don't have formal guidance at this point. I believe we'd be doing that sometime after we issue our fourth quarter results. It's a great starting point. Through all this, no one's even really asked about demand. At this point, demand conditions continue to remain strong, and I believe as long as that continues, we would be able to do that or better next year. Seeing no other questions and none in the chat function, Cal? Great. Okay. Listen, once again, we just want to say thank you to everyone who was able to attend our Investor Day today.
I just couldn't be more grateful for the team that I have, the support that I get from all of you. We obviously have a very compelling story, one that we're very proud of and one we're very excited about. It's our job to ultimately deliver on these goals. As I said, I think we will ultimately be viewed as a formulator, valued as a formulator. Thank you very much again for today.