NGVT
#Thank you very much.
Yes, I think that's a great question.
Because we do have significant outages that are scheduled for the second half of year ,and I would say they're more to the fourth quarter than the third, though we do have outages in both.
Of course in every chemical business you're going to have planned outages on an annual basis.
Often times, we would plan for one to two weeks for an outage for routine maintenance.
In this case, and it's particular I think to the performance materials or activated carbon side of the business.
We have a couple of significant outages because we're replacing some major pieces of equipment that you might not typically replace but every 15 to 20 years.
And it just so happens that those are occurring this year, in this year's second half.
So as we think about the impact of outages for Ingevity overall in the second half of the year, it's probably from an earning standpoint a $10 million to $15 million impact, with the majority of that impact being in Q4.
And of course that's reflected in our guidance.
I would say that the pressure has begun to subside, but the pressure is still downward.
I think we're going to see that continue for at least another couple of quarters.
Certainly not calling a bottom for that, but certainly I guess the slope of the decline has shallowed significantly.
And you can really see that if you look at the year-over-year comparisons for Q1 to Q1 of last year, and then Q2 of this year versus Q2.
Yes.
I think we're seeing some benefits already in 2016.
I think we'll see some modest benefits in 2017.
As you know, we have a portfolio of supply agreements, and those range from annual to multi-year, and really I think for the most significant of those is going to be at least mid 2017 to mid 2018, before we're really in a position to reset those contracts.
And of course what happens at that point is going to depend on market conditions, supply/demand dynamics at the time that we're renegotiating those.
In the meantime we're trying to position ourselves strategically, both from an inventory standpoint and a contractual standpoint, to put ourselves in the best position possible to capture savings.
I think the third quarter will be very similar to the second quarter in pavement technologies applications.
Okay.
With that, I just wanted to thank all of you for participating in this morning's call.
We certainly appreciate your interest in Ingevity.
We do hope you share our enthusiasm for the business, and we look forward to talking with you next quarter.
Have a great day.
