PX
#Sure.
We have the strongest hydrogen network when you take the access of pipeline plus the hydrogen storage cavern.
And we have a very strong blend of both on-purpose hydrogen production and byproduct hydrogen production.
So we will now be extending that from Texas City down to Freeport, which will give us additional opportunities all along that pipeline to be able to branch off for future projects, both for sources and for sinks of hydrogen.
And on the atmospheric side, as you know we also have a very strong atmospheric network extending throughout the Gulf.
That will also be extended.
So we will be able to bring the full complementary process in atmospheric gases with a very strong backup network and ability to deliver very high-pressure, high-quality product at very short swings in intervals that are needed by our customer base.
That gives a very strong and unique advantage, and we will be able to continue to branch off this network for other opportunities between that whole Texas City and Freeport corridor.
Sure.
I would say there is a whole bunch of interrelated issues going on in Brazil.
And frankly, I don't know if it's hit the bottom.
We will see.
It definitely feels pretty low right now.
The negative 7% was pretty steep here for this quarter.
But when I look at some of the factors that are driving the headwinds I think some have improved and some are still at the same level.
For instance if you start with the energy, there were serious issues around the hydroelectric production.
There was a very, very minimal amount of rainfall and that was putting a lot of stress on the government balance sheets as they were subsidizing.
Now those subsidies are starting to roll off.
There is a bit of inflation in that market; but they have gotten some rains.
They have seen a lot less consumption of electricity in the industrial sector, frankly, given the low production environment.
So that situation seems to be working its way out, which was one of the headwinds.
It is still not out of the woods yet, but that aspect seems to be working its way through.
Another issue as you know that came right after the election was the entire Petrobras scandal.
That has put a renewed headwind on activity not just around Petrobras and I would say the overall confidence in the environment, but Petrobras is a very large consumer of goods across the whole country, so this has had a knockoff effect on their suppliers and the local economies they work in.
So that has been a bit of a drag.
Now that they seem to be getting some progress they are working to get out their financial statements; and the more that gets resolved I think that will help rebuild some of the confidence and we can get maybe back to some production.
But other than that, volumes are still weak on anything that is industrial, anything that is manufacturing.
Auto is very weak.
Non-cyclicals are still doing well ---+ food and beverage and healthcare.
So we are, as I mentioned before, below take-or-pay on a handful of the steel mills; so it won't get worse in those steel mills.
And if we can see any amount of growth here it will be quite accretive.
But we are not going to bank on the growth, hence why we are making sure we keep our costs in line.
And we are definitely raising price to stay ahead of this inflation; and remember, that price will keep.
The currencies will recover at some point.
In fact, they have been recovering from the low of 3.3; it's now in the low 2.9s.
But this price we will keep, and we just have to get ahead of it, and that is what we are looking at it.
So I am not going to bank on a recovery.
But if it does happen, it will be quite accretive for us.
<UNK>, as I can keep making more cash freed up from my free cash flow, I will use that for buybacks.
While I am ---+ we did lever up a bit this quarter, but first quarter is our weakest cash flow quarter in general, just based on timing of tax payments and other payments.
But I am looking for the full year to keep my debt roughly consistent on a net debt basis.
What that means is every dollar that I am able to get back from either working capital or CapEx or out of operating cash flow in general, I will use for buybacks.
Sure.
As <UNK> had mentioned, US low 80%s.
Argon we are still seeing fairly tight at mid 90%s.
Moving to South America we are about mid-80%s, which may seem somewhat surprising given the conditions down there.
But you need to remember that the merchant liquids tend to go into a lot of the non-cyclical piece of the business and they are doing well.
So while the on-site volumes are quite challenged in Brazil, the merchant business is still doing fairly well.
When you move to Europe, on average we are low 70%s.
We are seeing a little bit of improvement in the South.
North is fairly stable, but more weakness in areas especially Scandinavia that is having some economic impact from low oil.
When you go to Asia, we're around mid-70%s.
Korea is still doing quite well, I would say mid-80%s.
We did add some capacity to India, so that is getting absorbed, so they are a step down in probably the low 70%s.
And China is in that low 70%s area as well, as Chinese New Year tends to be during this quarter a slower point on merchant consumption.
So that's kind of around the world.
We've got plenty of capacity to sell more molecules when the demand comes.
We are clearly not looking to add any more merchant capacity, but this is how we are operating right now around the world.
I think, <UNK>, there's always opportunities; it's just the opportunity set sometimes will shift with what's going on in our end markets that we serve.
For example, the main elements of productivity, if you put them in buckets, you will have efficiency of use our input costs.
So that could be natural gas; that could be power.
You will have efficiency in our distribution through our logistics efforts.
So that's more efficient routing, saving things like diesel fuel, hours of drivers.
And then you will have just your general what I will call overhead costs, the people and their associated costs to maintain the businesses.
So when you see challenged environments like this in lower energy costs, you may not have as many opportunities to go after the low energy cost side simply because the return on those projects become less, right.
The capital you put in, the returns are not as great at low energy.
However, you see strong opportunities in both the overhead as well as the distribution cost.
Because as our merchant routings change with demand, we need to make sure we are constantly optimizing them to be able to save the most money.
So I would say they don't go down as much as you think; they just shift, and our focus shifts.
Another big area for opportunity, frankly, is going back to all of our suppliers and taking advantage of this low commodity world.
We buy commodities too, whether it is steel for our plants or whether it is other type things that we use in our production processes.
We go back across our whole supplier chain and we also go to try and get productivity initiatives around the procurement.
So they still exist.
You are seeing them in our results.
You are seeing our margins expand, and I am not concerned that the opportunity set is dwindling in this environment.
