KOP
#Thank you.
I think they both play a critical piece of that.
Certainly the restructuring and the taking out of 7 of 11 operating facilities over a three-year period will play a substantial piece of that improvement over that time frame.
But a realignment of raw material prices that have just escalated and, quite frankly, have not resembled anywhere close to what's going on in the end markets will also play a significant piece.
I mean, the reality is we've been for several years in a declining price environment for the end products that come out of the distillation of that raw material.
And this is not a sustainable business, continuing to buy raw material at those sorts of prices and making products.
In fact, you can't continue to run a business like that.
And so it required a significant readjustment in raw material for us and people like us to be able to actually continue to take that product and distill it.
And so savings will be significant from the raw material side.
Savings will be significant from the cost alignment and restructuring side.
In terms of the proportion, gosh, I don't know.
I can tell you it's not ---+ or at least I'm not prepared to tell you on this call ---+ it's not 75%/25% either way, I'll tell you that.
It'd be much closer ---+ I think it might be much closer to something that would be a little more towards 50%/50%.
But probably ---+ I'm sure not exactly there.
But it's large on both ends of the spectrum.
Well, we've actually reflected some of the changing environment in our updated numbers, because we did bump up our expectations on pricing relative to the coal tar ---+ to the oil price increases.
But we do expect and have seen, right, the ---+ certainly reduced demand.
Some of that has been as a result of the decisions we've made to downsize, and some have been as a result of just the pullback in the aluminum industry.
The good news, <UNK>, is we are trying to disconnect our future operating results from what goes on in the aluminum markets.
Not that we don't want to serve those markets.
We're still going to be dependent upon them moving forward, because we are still going to making carbon pitch.
But we're going to be so much less dependent upon them as time goes on, just due to the fact that we are distilling less product.
So the market can contract; it can move.
We think we have other options to move some of that product around to defend against any other additional pullback there.
But we're ---+ one of the whole objectives of this strategy was to try and really reduce our reliance upon what we've seen going on in that market over an extended period of time.
And we believe that the decisions we're making are going to result in just that happening.
So it's always tough to say, you know, as you look out two, three years, I mean, there's so many things that are moving that could ultimately have a positive or negative impact.
But aluminum doesn't concern me the way it would have, certainly, two years ago or three years ago.
And it shouldn't concern others as much as it did in that time frame, either.
It's just a much, much smaller part of our portfolio.
And it's intentional.
No, we don't.
Oil is still going to have an impact on orthoxylene, which will have an impact on phthalic anhydride.
Oil will still have some at least indirect impact on naphthalene, which uses a feedstock in that process.
Oil will still have an impact on carbon black feedstock, which is priced to benchmark Platts oil prices.
So in those product lines, it's still going to have an effect.
And that's why we've talked in the past about ---+ again, at the low end of the range in 2018, when CM&C looks like it's fully restructured, moving forward on the low end of the crude oil price range, we think we can make $40 million-plus.
If oil would move back ---+ and I know nobody believes it will, but if oil would move back to where it was in the 2013/2014 time frame, high $90s, around $100 a barrel, we think it could be as high as $70.
That's still a significant movement between that spectrum.
But no, oil is going to continue to have an impact on that business.
Our objective is that at the low end of the range, we can still have a adequately profitable business that provides returns on capital in line with the risks associated in that business.
You're welcome.
I'd just like to thank everybody for dialing in for the call.
Again, we are ---+ feel pretty good about where things stand through the first six months.
Happy with all the progress that we've made.
We will continue to do everything we can to execute on our plan, and look forward to catching up again next quarter.
Thank you.
