All right, everyone. Thanks again. We're going to be moving on to our next presentation this afternoon, with us, very pleased to have Westlake. We have Albert Chao and Steve Bender. Albert, obviously, the President and Chief Executive Officer, and Steve, the CFO, who I'm sure many of you know. Steve's going to be giving the presentation today, and then we're going to have Albert around for Q&A. With that, let me turn the floor over to Westlake.
Thank you all very much. There we go. Let me start by a general orientation of Westlake. Westlake is a leading integrated plastics materials company concentrated in the olefins and the vinyls business, as you can see. The four points that you see in our mission statement are very important to us, and you'll hear more about them as I walk through them today. We pursue profitable growth and as a result, grow our businesses for the benefit of all of our shareholders. We're focused on the businesses that we understand, and we do businesses globally in areas where we can gain a competitive edge. We always act in a financially disciplined, opportunistic manner. We're focused, as you can see, in the olefins and vinyls businesses, and our olefins business represent about 47% of our overall EBITDA. Our main product is polyethylene.
Polyethylene is the largest plastic used around the world. It's an ideal choice for a countless number of non-durable products and largely used in flexible food packaging. Our vinyls business makes PVC, caustic soda, chlorine, and chlorinated products. PVC is a very economic plastic because half of the raw materials is made from relatively cheap non-hydrocarbon based chlorine. Its unique set of properties make it the plastic choice that's ideal for consumer durable products. Caustic, of course, is used in a wide variety of industries, from refining all the way through general industries used, even in the manufacturing of soap and other materials. In late August of last year, Westlake completed its transaction with Axiall and acquired Axiall. We're very excited about this transaction for a number of reasons. We strongly believe the industrial and strategic logic of this transaction is quite compelling.
The combined company is a leader in North American olefins and vinyls business now. We're the largest North American producer of low density polyethylene and the second largest North American producer of PVC. We're number three globally and the third largest chlor-alkali producer in North America, and of course, number three globally. Just as importantly, this transaction is consistent with our history of vertical integration, which captures the margin across the chain and throughout the business cycle. The acquisition greatly expands our manufacturing footprint and positions us for future growth. In addition to the $100 million of cost reduction synergies that we've talked about, we believe we'll achieve another $100 million of synergies related to the transaction. Certainly this year we've indicated we'd achieve $120 million of those synergies and have those in pocket this year with a remaining portion of $80 million in 2018.
On this chart, you can see that Axiall is just one of the many transactions and acquisitions that we've undertaken in over 30 years. We've undertaken a variety of ways to grow the business. It illustrates that we've grown our capacities over a large number of years. You can see starting with our inception in September 1986 through the 2017 acquisition of Axiall and the expansion that we also completed in Calvert City for ethylene last year. Note that we've achieved this growth both through organic growth as well as through acquisition, and we've mapped out some larger transactions, as you can see here on the graph, to illustrate some of those areas of growth. The green portions of the bars you can see are in the olefins section, and the yellow portions of the bars represent our vinyl segment.
At Westlake, we're looking not for just ways to grow the business, but really looking for ways to grow the business strategically, always with value in mind. Bottom line value, not top line growth is always very important to us. Cash flow value creation is where our focus remains. On this slide, I examine in much greater detail the diversity of our end products in the combined company that we make, and also the capacities of productions, and perhaps more importantly, how the two product lines combine into one larger chain that values and creates that value that I just spoke of. Westlake is currently fully integrated in our olefins chain. As you can see, the green boxes from ethylene all the way up to polyethylene and styrene.
Certainly, I've noted here in the dotted box the joint venture we have with Lotte as we undertake the construction of an ethylene plant in Lake Charles where we have a 10% interest today for 220 million pounds and an option to also grow that up to 40% more for 1.1 billion pounds. As I mentioned, we're currently fully integrated in our olefins chain in ethylene all the way out to polyethylene and styrene and not fully integrated in ethylene in the vinyls chain and that's where this opportunity to go in further into ethylene provides an opportunity. The Axiall assets primarily added production in chlorine, PVC, and in the gold bars you see here, building products, as well as in the chlorinated products areas. We already had a strong olefins position and a strong PVC position along with our building products presence.
The combined product area added significant capacity both in caustic, chlorine, PVC, and of course into the building products businesses as well. I think you'll note really how well integrated this business set now remains. In the last couple of years, we've engaged in a very disciplined focus in being able to invest in the business and grow the business. We've expanded through organic expansions, growing our businesses in Calvert City through an ethylene expansion, as well as building the facilities in Geismar, Louisiana, as well as expanding our Petro 1 asset just last year. Westlake has a very long history of growth, both organically as well as through acquisition. On this chart, what I'd wanted to do is highlight really that we've got a variety of ways for feedstock flexibility.
You can see the pie chart in the upper right shows that almost two-thirds of the world's ethylene production is from heavy or oil-based feedstocks. In contrast, all of our plants have an ability to use ethane as a feedstock. Certainly very driven today by that ethane feedstock. The pie chart in the middle shows that the flexibility we have with regard to feedstocks, as you can see. We can go from an all ethane feedstock where we are today to a mix of feedstocks. This flexibility allows us to adapt our feedstocks based on current needs and based on current margins in the marketplace. The pie chart shows in the lower right-hand corner the 2016 Western European ethylene industry by feedstock as well. Our Vinnolit subsidiary in Europe provides further diversification of our feedstock requirements.
The large supply of ethane and NGLs in the U.S. is available to us via the expanding pipeline network that you see here on the chart in the upper left-hand corner. The chart shows a growing infrastructure used to deliver both ethane and NGLs into the Gulf Coast. This is in addition to all the previous capacity that we've seen added over the last couple of years. The additional capacity from the Northeast and the Marcellus region will be a significant supplement to the current supply from the Gulf Coast and the Mid-Continent. Our Calvert City facility in Western Kentucky is benefiting from the access of ethane and NGLs from the Northeast Marcellus fields. Our Lake Charles facility is connected to the Gulf Coast network of feedstock pipelines and storage facilities, and we're also able to take ethane from the ATEX pipeline that Enterprise operates.
Can you turn the page for me? For some reason, it's not turning. There we go. Thank you. Let's take a look at our polyethylene business for just a moment. As you can see, Westlake is focused on the more profitable mix in our downstream polyethylene businesses. Global polyethylene capacity today is currently 204 billion pounds and is composed of 3 types of polyethylene, namely LDPE, low density polyethylene, linear low density polyethylene, LLDPE, and high density polyethylene, HDPE. Referring to the two pie charts that you see on the left, the LDPE represents approximately 22% of the global market, whereas 58% of our current capacity. The right chart shows that over the last 15 years, LDPE has had the highest margins of all the polyethylene products.
Low density polyethylene has averaged about $0.077 per pound more than the linear low polyethylene and $0.05 per pound more than HDPE during the years 2002 to 2016. According to the 2016 IHS estimates, low density polyethylene has about $0.085 per pound more advantage over linear and about $0.065 advantage over HDPE from 2012 to 2016. Thus, our current average margin per pound of PE would be in line with historic industry average. When you look at the mix of polyethylenes around the world and the advantage mix that we have, you can see that our low density polyethylene advantage is quite clear versus the industry. The chart on the left shows that Westlake has the highest percentage of LDPE to total polyethylene in North America.
Thus, we have among the highest PE margin per pound of polyethylene sold in North America. Product differentiation will be an important factor as new capacity additions are added in the coming years. Furthermore, LDPE capacity being added is all tubular capacity, which is the more commoditized form of LDPE. Tubular low-density polyethylene is engineered for high volume production, targeted at low volume applications with a narrow product mix. Autoclave low-density polyethylene is a more specialized form of polyethylene and provides a broader product mix and is better suited for specialty applications such as coating and a wide range of flexible food packaging applications. Thus, autoclave low-density polyethylene resins commands a higher price in the global market than tubular resins. Westlake focuses on the more desirable autoclave low-density polyethylene, which is 80% of our LDPE capacity compared to the global average of about 35%.
With very little new autoclave low-density polyethylene capacity being added around the world and growing global demand, this market for specialty polyethylene continues to tighten as we march forward into the future. Here we go. As we think about the future, let's take a look at the global polyethylene additions to be added. The global polyethylene additions around the world are charted here on this chart, as you can see, from 2017 out to 2021. The new production capacity will find its way into markets predominantly in Europe and in Asia, as these markets represent the best netback for products for this new production. Global polyethylene demand tends to grow between one and one and a half times world GDP growth, as illustrated by the orange and purple lines that you see.
Forecasted global low-density polyethylene capacities will not be on pace to keep track with the global demands that we see. As you can see that we have a continued capacity of additions that really aren't going to keep up with that global demand. As you think about the global footprint that Westlake today has, you can see that we have continued to grow our business through acquisitions. On this slide, we look at where we're growing. Pre-acquisition, Westlake had a global PVC presence with facilities in North America, Europe, and Asia. Post the acquisition of Axiall, we've expanded our presence in North America and Asia to complement our expansions in Europe and the 2014 acquisition of Vinnolit. Our global presence offers many advantages. Our North American operations are currently benefiting from integrated low-cost production.
We have a global presence, and our European facility, Vinnolit, is a global leading player in the form of specialty PVC resins. We also have a vinyls facility in China that we refer to as Suzhou. This facility makes up one of the highest quality PVC films and resins in China, serving major domestic and export customers. The Axiall acquisition added more capacity in North America, greater diversification in Asia, and a greater expanse of our products around the world. On this chart, you can see in the upper left hand corner the integration of our vinyl segment after the acquisition. While most vinyl producers are integrated into chlor-alkali, they're not integrated into ethylene. Importantly, the majority of the margin in the vinyls chain is in ethylene and chlor-alkali.
In order to illustrate the value of being integrated, I've divided the historical margins and vinyls into chlor-alkali, ethylene, and PVC, as you can see in the upper right-hand pie. As you can see over the last cycle, this is from 2005-2015, most of the value in the vinyls chain is in the chlor-alkali and ethylene slice of the pie, claiming about 91% of that margin, with only about 9% of the margin in the PVC resin manufacturing process. The pie chart that you see in the lower right-hand corner shows the typical industry margins look like from 2010-2016. As you can see, the majority of the margin over this period in ethylene represents a large portion in, again, in chlor-alkali as well as in ethylene, and certainly up from 47% up from 39%.
Still, the importance here is that the PVC slice of the pie represents only a small portion of the overall EBITDA margin chain. Through upstream integration in chlor-alkali using shale gas-based power and the ethylene using shale-based ethane and NGLs makes Westlake one of the lowest cost producers of vinyls globally. On this chart, you can see that as the combined entity now, Westlake is a leader in North American chlor-alkali and PVC markets. The combination creates the number 3 North American chlor-alkali producer and the number 2 PVC producer in North America.
In the long term, the acquisition will continue to provide greater scale and synergies to Westlake's existing businesses, better position the company for additional competition around the world throughout the chain, offer better ability to serve customers and capitalize on future investment opportunities, and creates a combined business with broader geographical footprint, which includes Westlake's Vinnolit business in Europe, which is, as mentioned, is a global leading player in the specialty PVC resins business. This chart at the top of the page illustrates the relative specialty PVC production capacities of Westlake in relation to other PVC producers around the world. Westlake is the largest global producer in the specialty PVC market, which brings better margins than the commodity PVC. The specialty PVC takes lots of forms and has lots of uses.
It takes an opportunity for us to really expand into a segment of business that we don't typically participate here in the North American business. It goes into flooring, wall coverings, artificial leathers, and a wide range of other applications, automotive and hospital applications. This is just a sampling of some of the specialty applications that our Vinnolit business provides. Global PVC demand has continued to increase from over 30 million tons to over 40 million tons over the last 10 years and is projected by industry consultants to reach almost 50 million tons by 2021, driven by construction and infrastructure requirements in the emerging markets around the world.
The low cost of natural gas to produce power for the production of chlorine and low cost of ethane to produce ethylene provides North American PVC producers the advantage to continue to export to emerging markets and to satisfy this growing demand. As you can see today with the orange line, we continue to, as an industry, see exports between 30%-40% of North American production. Let me spend a minute and turn to a discussion of our focus and our disciplined culture about how we manage the balance sheet and some of the returns in the business. A key element of our philosophy is the prudent reinvestment of capital and the realization of an efficient return on this investment. In just a few minutes, I'll review some of the metrics that we use.
The chart above shows that we've prudently invested in the business through expansions, new facilities, and acquisitions. I've listed a few of the examples of our recent history and near-term projects to illustrate the commitment to grow both organically as well as through strategic acquisitions. The chart that you see at the top of this page shows the debt to total cap ratio over the last 10 years. You can see that Westlake has consistently been less leveraged than our peer group, yet during the same time period, we've continued to deploy $billions of capital into the business and profitably grow the business. We didn't overextend ourselves as some did during the same time period. Even now, after the acquisition, we still have certainly an average debt to cap ratio better than our peer set.
As you may know, we've recently issued $750 million of debt as a means to continue to de-lever and extend the maturities of our debt. There are implications here for investors that you should really note. We have the ample ability to fund future growth, we have the patience and the discipline to invest, and the risk-reward trade-off is very favorable. In the chart at the bottom, you can see that we continue to remain strong investment grade ratings, we intend to stay investment grade on an ongoing basis. Our disciplined approach to spending and the competitive factors we spoke to earlier rank Westlake among the top of our peer group in returns. The left part of the bar chart shows we're putting those assets to work more effectively than our peer group and generating returns above our peer set.
The middle bar on the chart shows we're achieving these margins with less capital employed, the bars on the right show our average EBITDA margin is better than our peers. I attribute that really to our superior bottom-line results and our operating philosophy and execution, specifically. Our focused growth in expanding our chain integration, the advantaged feedstock, and of course, our product mix. Let me spend just a few minutes and talk about the master limited partnership that we formed in 2014. This year in January, the IRS issued their final regulations, which reaffirmed our private letter ruling we received in 2014 that income derived from processing NGLs into ethylene is considered qualifying income. This has provided much greater clarity, really into the long-term growth of the master limited partnership. This slide reflects the rather interesting structure that we have here.
I know it may be a little bit of an eye chart, at the time of the IPO when we created the OpCo and the master limited partnership, the 10% of the OpCo was dropped down into the partnership. In September of this year, we dropped an additional 5%. Between the September 17 drop-down, the one completed in 2015, and the IPO today, we have 18% of the operating company contributed into the partnership. The cash used from that transaction as we issued new units was channeled up to Westlake Chemical and allows us to continue to further deploy that capital into the business.
As you can see, this drop-down is just one of the four levers that you see in the upper left-hand corner, which is periodic drop-downs of OpCo, the ability to have organic growth as we've undertaken over the last several years, expansions in Calvert City and our Petro 1 asset most recently. Acquisition opportunities, and of course, the Vinnolit joint venture investment might be considered one of the optimum acquisition opportunities for OpCo as well, as well as expanding the margin that we today currently have. A $0.10 margin, certainly could expand it over time. The structure of the MLP insulates the partnership from fluctuations in feedstock prices, whereas 95% of the partnership's income is derived from an ethylene contract that is sold to Westlake Chemical. It insulates the partnership from all commodity risk, leaving only 5% exposed to commodity variabilities.
The takeaway here is the partnership is extremely stable, backed by an offtake arrangement with an investment grade parent, Westlake, and is well positioned to continue to grow, as you can see, with 82% of the operating company still yet to be dropped down. Very well positioned for the partnership to continue to grow and very well positioned to use this partnership to fund Westlake's continued growth. The significant investments we've made and will continue to make have continued to expand our business and enhance our margins. You can see these items that we've built upon from the previous investments over the last several years have continued to grow our earnings.
The recent acquisition of Axiall, the Petro 1 expansion in 2016, the acquisition of Vinnolit in Europe in 2014, a variety of other expansions have continued to propel our earnings as we march forward and continue to look for ways to grow real value at the bottom line. These are just a few of the important integration steps that we've taken to propel our EBITDA. With that, I'll pause and take questions. I'll invite Albert up here, who I know is struggling a little bit with his voice today to take questions from the audience.
I guess according to Is there any restrictions the rating agencies have given you in terms of how much of the assets you can drop into OpCo and still maintain the ratings?
As we think about that, we recognize that the consolidation of the partnership into the parent is there, and so certainly we'll continue, as I mentioned earlier, make sure that as we go forward with the partnership, that we maintain investment grade metrics. We recognize it's a balancing act always with a partnership as a subsidiary, but our focus is always at the parent to maintain strong investment grade financial metrics.
Is there a cap that you can't drop down?
In our discussions with the agencies, and I think I see one of them actually in the audience today, I would say that certainly the kind of metrics that we work with and communicate with, whether it be Moody's or S&P or Fitch, is really to make sure that there's always a balancing act. We recognize as we march forward, there is no limitation in terms of how much of OpCo can be contributed into the partnership, none whatsoever. It would be my expectation that all of OpCo will be contributed. The issue is really how we deploy the capital back up to Westlake and grow the business. Our focus really is to make sure that we continue to have this set of earnings and balance sheet metrics that allow us to maintain that rating criteria.
And also-
And also-
Those Westlake assets that are not in OpCo, those cannot be contributed to the OpCo assets. Is that correct?
Yes. In fact,
The ethylene assets.
We have all the ethylene assets contributed in, and certainly as we continue to look for ways to grow the master-limited partnership, we'll look for any asset that is qualifying under the IRS code to think about growing the business over time.
That we control the GP of MLP.
Yeah. What Albert is saying is that we control the general partner, even if we contribute all of the operating assets into the partnership, we still control the general partner, which controls the entire structure. It doesn't create a limitation for us to be able to control the crackers, even if we contributed 100% of the operating company into the partnership, because we'll always control the general partner.
Can you guys provide us an update on post hurricanes? Has the polyethylene situation normalized? Where are inventory levels now? Where do you think pricing is going, at least in the 4Q?
You want to take it? PJ, what we've seen really is if you look at some of the consultants that are out there, you see that we've seen about $0.10 come into the market really as a result of a variety of drivers. I wouldn't attribute all of that necessarily to the Hurricane Harvey. I contribute some of that really as a result of seeing strength in demand in our markets. If you look at what some of the consultants, such as IHS, are suggesting between now and sometime in the early spring, we may give up some of that additional value that we've picked up. I would say that because of the outages that we saw from some of our peer set as a result of the hurricane, inventories have been relatively tight.
Some of our customers were expecting lower prices as we entered the season, expecting new production to start later this year, which in fact has not all occurred. They lower their inventory levels just as the hurricane disrupted production from some of our peer set. As a consequence, inventories haven't fully built up across the industry per se, and this is really why we saw an opportunity to really service some of our competitors' customers because we were not impacted by the storm and able to also meet our own customer demands as well.
Also, you are net short ethylene by about 2 billion pounds. What are the plans to close that? I know you have Lotte joint venture coming in 2019, and that could close some of the gap. Any thoughts on acquisitions, particularly next year if industry were to enter, even if a mild downturn, maybe valuations come down and you could scoop up some assets?
As we think about the Lotte joint ventures today, it's as you noted, under construction, is expected to be completed by 2019. We have 10% working interest in the facility, but we have an option that would allow us to step up as high as 50% ownership of that cracker. That would allow us to bring on between today 220 million pounds and an incremental 880 million pounds for a total of 1.1. We'd still certainly be short ethylene, nevertheless, 700 million-800 million pounds. There are plenty of opportunities to find ways to fill that as long as the investment thesis is appropriate. That's the kind of analysis that we'll look at for this election of this option that we have with Lotte.
We're very focused at bottom line value, and so to the extent the returns are appropriate, we can think about electing that option or pursuing other opportunities to go into ethylene. It's function of what the returns require.
Are you actively looking for other opportunities?
Ethylene is core to everything that we make, and so of course, everything that is in ethylene space, we look at.
I've got two questions. First question is, the PVC market's pretty tight because of China. Could you share us your views on the outlook for PVC and how you think, is this the new normal or will we see a normalization over time of the PVC pricing? Then I'll come back to you.
Well, certainly, as we enter the season currently, typically the fall season is a slowing period seasonally for PVC. Certainly, as you noted, there really hasn't been any PVC capacity additions here in the U.S. for a number of years. Certainly, with the regulatory changes we've seen in Europe as well as in China, whether it be the reduction of mercury-based chlorine production, shutting chlor-alkali and chlorine sites down, and a knock-on effect of reducing production of PVC in Europe. We've also seen some regulatory effects in China that have had an effect of reducing capacity adds. In fact, there have been some policies set out by central government in China that limit or restrict new capacity adds in many of the major metropolitan centers in China that could be a constraint on additional capacity.
We continue to see, I think, a good runway for the industry with limited capacity adds here in the Americas. In fact, the entire northern hemisphere.
A second question is, obviously, AkzoNobel is spinning out its specialty chemicals business. Where do you see consolidation in caustic soda, in particular, kind of going, and what role do you want to play within that industry?
When you think about the consolidation that's already occurred in this space, whether it be in Europe or in the Americas, certainly we participated in some of that. Again, I go back to my commentary that we're a value-based investor in our businesses, and to the extent there are opportunities that make sense, always we're interested, but to the extent that there are opportunities that don't make sense, we don't. Specific to AkzoNobel, certainly we're aware of what's in the press. We'll watch with interest, but certainly our focus is really in creating value at the bottom line. Bigger is not always better. Our view is bottom line value is where we're focused.
Thank you very much.
You're welcome.
Maybe going back to the mercury-based capacity conversions in West Europe. To your understanding, how far into that whole conversion process in that region are we? I know there was some going on this year and maybe some will continue to shut down and then take some time to convert to clean technology and then restart. How far into that are we and also, typically when a plant shuts down, can you talk to us about how long that shutdown typically lasts and how long they may be offline for?
Go ahead. You want to? Come over here and holler. I know you're struggling with your voice.
Excuse me. I think people are estimating 800,000 tons.
Okay, I'll do it. There's about 800,000 tons of capacity that was expected to come out as a result of this European mandate to shut mercury-based production capacity. We think we're well through a lot of that. There is still some additional capacity yet to shut, probably in the month of December. We see another 300,000 tons to come out still. They'll run right up, I would expect, right to the end of the year and shut. There are some that are finishing their conversion to membrane, but I've already built that into my analysis when I think of the numbers. Certainly we think that with that shutdown and we've seen some knock-on effect impacting the PVC and other derivatives businesses as well.
Maybe a follow-up on China. We're hearing about a lot of pressure on coal-based capacity and including some of the PVC producers. Based on what you're seeing on the ground, do you see that impact happening? Is it actually showing up in the market or how low have these plants dropped utilization to if they're just dropping utilization or if they're coming offline completely?
Many of the integrated coal-based producers using that approach are really more inland. This is really more around the 2+26 areas that are really being impacted. My point is that certainly it has had some impact but certainly the bigger impact to the coal-based has really been in those that are integrated or back to the mine mouth. Certainly we've also seen some that are more coastal based certainly have more direct adverse impact to their businesses and certainly we have seen that effect. Certainly that's also had an impact. We've also seen those using more of an MTO approach also which also have had some impact as well. Another question over here.
I have two questions for you, Steve. LDPE, I'm sorry I don't know this, LDPE is the most profitable, it's the one with the least focus of additional capacity. Why is that? Because it's higher cost?
Well, it is a higher investment cost, it also has, when you think of the opportunities that producers were looking at to capture, they were really capturing the ethane to ethylene margin and then monetizing that by creating the most commoditized form of polyethylene and exporting that into the marketplace. The very high pressures of low-density polyethylene are higher investment cost.
Okay.
When you look at the number of grades that are necessary to produce into that market, especially in the autoclave high clarity form, there are over 100 grades of autoclave low-density polyethylene. To the extent they chose to go into low-density polyethylene, they chose to take a tubular route, which only has a handful of grades associated with it, again, allowing them to then export just those handful of grades into the export market. Whereas if they'd gone into the more specialized higher margins business of autoclave, there would've been over 100 grades, and as a consequence, much more challenging to identify which particular grade you're going to make on which particular day to export to a particular market. Their strategy was really to commoditize the polyethylene they produced. They produced high density, linear low density, and the tubular or commodity grade of low density.
That's why you didn't see anybody in this market or almost globally really add autoclave capacity. There will be some coming, but certainly that market is much more specialized given the wide number of grades and the customization that's really necessary for its applications.
Okay. The other question I had, I don't know if you disclosed this or care to, but is the family's ownership of Westlake Chemical Partners similar to its ownership of Westlake Chemical?
No, the family does not have the same concentration of ownership. The family certainly does invest in the partnership.
Okay.
As well as the CFO does. There was a question in the back here.
I can talk about it. There has been a lot of focus on PVC crackdowns. Then I guess very recently there was some announced HDPE closures in China, which was a little bit more new to the conversation set. I was wondering if you could comment a little bit on the, I am going to butcher the pronunciation, but Shaanxi Province or something, HDPE curtailments and whether you have noticed that it seemed to trigger some inflection in Chinese pricing and.
Speak please.
Whether that is playing out a little bit.
I have to admit, I am not that familiar with that topic that you are mentioning.
Okay, got it. Thanks.