Epoxy Comments from Huntsman’s Investors Call

Angel Castillo — Morgan Stanley — Analyst

Hi, good morning. Thanks for taking my question. Peter I was just hoping you could unpack a little bit more on the Advanced Materials segment in your outlook and what you’re seeing. From an end market perspective you talked about aerospace, but if you could touch on some of the other end markets that you have and what you’re seeing? And on top of that, I guess, I was also wondering, you talked about that segment as a core platform for growth in M&A and there is a lot going on right now with some of the acquisitions that you’ve recently done. So curious from a capacity perspective operationally, is there any constraints as to limitation of how much more M&A you can do kind of in the near term for that segment? Do you kind of take a pause until you’ve done Gabriel, fully integrated or is there an opportunity to do something kind of near-term still?

Peter R. Huntsman — Chairman of the Board, President and Chief Executive Officer

Well, yes, I think Angel that’s an excellent question. I think that as we look at Advanced Materials, in the script, we talked about it being a platform for internal investment and organic expansion. And so I think that we see a lot of opportunities, particularly around power and around electronics. So when you think of the power grid system that has to be built, if you’re going to be connecting all of these windmills and solar plants and all these new sources of electricity, the build out of a smart grid or just the addition of a dumb grid I guess, either one of those a smart grid or a dumb grid, we’re going to be involved in the build out of the electronic infrastructure, the power lines, the transformers and so forth. That’s a very profitable end of our business. And we also look at the electronic side of what we’re doing.

This is an area as well when you think about the shortages that are taking place around the automotive industry. It is an excellent question that was earlier asked and you look at the average electric vehicle is going to take 4 times the amount of semiconductor capacity as an ice vehicle. So as you look at those end-use applications, I think that those are all areas of growth and a lot of what we are going to be doing in Advanced Materials. These are new fields. I mean as we look at our Performance Products and we look at expanding some of our products that will be going into the battery technology. These are areas where you got and you buy competition, because nobody is doing it right now. And we think that we’ve got an expertise, a lot of the amines that potentially will be used for carbon capture and sequestration.

We’ve talked in the past about our ability to produce nano technologies around carbon and this part of carbon capture and so forth. A lot of these areas are areas that we have technology, we have know-how and we want to develop these end use markets and we think that with this transition going into this greener economy, not only will there be some sort of a subsidy and help in doing some of those sort of things. Food taxes and so forth, but we think that the market will be there as well. So when we talk about internal opportunities for Advanced Materials and Performance Products and the other divisions as well, we see real opportunities there.

But again I’d also just say that with the recent acquisitions we’ve done, areas around curing agents in coatings, again we have an opportunity to take those acquisitions and to give our existing customer base and our expanding customer base a wider portfolio of services, products, formulations, components and I think that, as I look at the Advanced Materials, yes, I see there is a potential platform for more M&A, but I’m especially excited to see about what it could do by improving the bottom line, by integrating what we purchased, by becoming more streamlined in the costs and by capitalizing on small but manageable expansions that will be going into new and bolder opportunities going forward.

https://www.fool.com/earnings/call-transcripts/2021/02/12/huntsman-corp-hun-q4-2020-earnings-call-transcript/