FMC
#Obviously, I'm not going to talk about what the competition is doing on price.
I'll tell you where we are.
As <UNK> said earlier, we are doing everything we can to make sure we manage price in terms across North America and certainly in Brazil, where we have reduced our exposure to the Brazilian market by taking out through product rationalization a significant amount of volume and revenue.
But we are very focused on making sure that we maximize price not only in terms of pricing but across the portfolio of what we are selling.
I think you're going to see all sorts of different activities as we go through the next year, but for us, it's very much around protecting the margins, protecting the value of the business and certainly looking after working capital.
I think in terms of pricing, just to get back to one of the comments <UNK> made around the balance of FX and pricing.
As you know, we tend to have a rule in Brazil where we index price on currency.
Last year, we were, with our pricing, running after the currency and trying to move up our price.
This year, the same process of adjusting pricing to currency is going the other way, which means it is not any longer us asking the customers to pay higher price, but the customer asking us to lower the price to alter currency.
So needless to say that for all of us, regardless of what behavior individual companies would take, it is immediate conversation from the predictability of the pricing.
In these FX situations, give us a much better position to talk about pricing, more control in terms of understanding pricing in the next two quarters.
I think it's got to apply to every Company.
It is just an FX price situation.
Yes, the direct market situation is a one-time impact.
It is just a capital of situation, which happens all the time when you do these kind of a transfer.
First of all, you work with your distribution network, which you're moving away from.
Those guys have inventory.
They have stock.
They are filling it, while you are repositioning your own now warehouses to sell.
So there is still time where you have two networks, which have to overlap for a little while.
You have to give the time to your distributors to sell the product, they were supposed to sell in the past by contract.
Second of all, you are the [stage one] so where you're distributors and not repositioning their inventory in advance.
So by the time we get into ---+ this is happening as a transition now, I believe if by the time we get into European season Q1, Q2 next year, we should be in a very normalized situation and it will be stable for the future.
Thank you.
So I think in the first half, the way I would look at it, <UNK>, is when we give a range, we said mid single-digit to start high single-digit, maybe we were thinking about more toward, when we started this process, the lower end of the range maybe 5%, 6%, 7%.
We are more today on a 7%, 8% more towards the higher end of the range.
That is due, maybe less due, to challenged inventory than it was to specific reasons in Asia and Europe, mostly driven by weather.
So for us when we look at the market, if you remember, we were thinking about North America and Latin America in the higher end of the range.
These being helped by flattish to slightly down markets in Europe and Asia.
We don't see that any longer.
I mean we still see North America and Latin America on the high end of the range.
But we see Asia and Europe being down in the 5%, 6% for this year.
That is why, today, we are looking at maybe more the higher end of our range.
For us, what we've been doing is, we've been able, no matter what, to protect our earnings by being even more drastic on price being more drastic on product rationalization.
So we will be slightly lower on sales, but we believe we are going to be ---+ we're going to have very solid performance in the second half and productivity on the earnings side.
I would say always the same answer, when we give the middle of the range, it is under normal circumstances from a demand and weather standpoint.
There is always a range, you just need infestation, you just need very strong insect pressure or other pressure.
You will drive that either to the lower or either to the higher end.
Today, we believe we are very controllable with the middle of the range to see anything going up or down would be due to exceptional events not lead to channel inventory or anything of that kind, but much more to specific agricultural seasonal situations.
Mostly weather.
Thank you, <UNK>.
Yes, so Lithium ---+ I have to say, we do have increased confidence in the future.
Today, we believe this market is getting more and more solid.
I have to say that we are prudent, but the big breakthrough for us is the technology we're able to develop from a manufacturing standpoint, allowing us to, at a very low capital span and efficient cost of operations, ability to create 4,000 to 8,000 tons modules for Lithium hydroxide instead of having to build, in one shot, a 20,000 or 30,000 tons.
So today, we do have an improved view and more certain view of where Lithium hydroxide is doing.
But all the work we've done over the last two years was to develop a manufacturing process allowing us to follow the demand growth, which means that if the growth is not as we're expecting, we can stop one or two of these modules manufacturing and slow down the capacity increase we have planned.
If the demand becomes more aggressive, very easy for us to speed up the building of those modules.
So first to your question, yes, we have increased confidence.
Our strategy is very highly focused on the downstream product, where we have the highest profitability.
Third, we have a safety net around demand by this manufacturing process we have in place, allowing to match the demand.
Where are we on our forecast.
We are taking pretty much the middle of the range.
We are far in the process of predictability for the numbers I gave to you, to take the highest prediction from easy companies.
So there could be upside, you know we are prepared also for the downside.
Maybe I'll ask <UNK> to comment on the technology.
Yes.
Thanks for the question.
On the technology, we've got a technology roadmap.
I'd say that with this strategy that we've undertaken on the high-value products, the biggest shift is increased collaboration or formalized collaboration with our customers.
So we do have a number of exciting opportunities that are being discussed with customers and being trialed customers.
We're looking forward to that.
It will continue to add to high-quality sales of new Lithium derivatives and new applications of existing Lithium derivatives.
As it was the last question, let me close with a couple of words before I hand the closing comments to <UNK>.
I think we went through those two quarters very highly focused on delivering what we promised to do.
Everything we've done in the two quarters had done a few things for us.
First of all, I believe from an Ag standpoint, even if the markets are not yet returning to the level of growth these kinds of markets could expect to see one day, we have improved highly our control, visibility and productivity of our own business.
I think from the Lithium standpoint, it is a bright spot for us.
We have refined our strategy.
I have to say the breakthrough we had in technology around Lithium hydroxide manufacturing are an enormous win for us looking at our future.
Health and Nutrition, the business is solid.
The business is highly profitable, but we also understand the challenges we have on Omega-3.
It is something we will be focusing on in the quarters to come.
So with this, I'm going to turn the call back to <UNK>.
Thank you, <UNK>.
As always, appreciate the time and the questions.
I'll be available [beyond] the call to address any further questions that you may have.
So with that, thank you.
Have a good day.
