Financial Data and Key Metrics - Adjusted net income for Q3 2023 was 14.7million,asignificantdeclinefrom46.3 million in the prior year [23][29] - Adjusted EBITDA for Q3 2023 was 48million,downfrom85 million in the prior year, primarily due to a 9% decline in sales volume [23][26] - Surfactant operating income was 15.4million,downfrom39 million in the prior year, driven by a 7% decline in global sales volume and lower unit margins in Latin America [26] - Polymer operating income was 21.8million,downfrom31.9 million in the prior year, with a 12% decline in global sales volume, particularly in Rigid Polyols [27] - Specialty Product operating income was 2.4million,downfrom9.7 million in the prior year, due to lower sales volume and unit margins within the MCT product line [30] Business Line Data and Key Metrics - Surfactant volumes grew by 2% sequentially, driven by double-digit growth in personal care and mid-single-digit growth in laundry and cleaning [41] - Polymer volumes increased 6% sequentially, with high single-digit growth in global Rigid Polyols, partially offset by a 25% decline in commodity PA business [37] - Specialty Product volumes were impacted by order timing differences, leading to a sequential decline in operating income [37] Market Data and Key Metrics - Latin America saw high-single-digit volume growth in Surfactants, but margins were pressured by competitive imports [24][26] - China's Polymer business showed strong double-digit growth in Q3, driven by market diversification efforts [61] - Agricultural end-market demand remained low due to continued destocking, impacting Surfactant earnings [33][64] Company Strategy and Industry Competition - The company is focusing on cost reduction, targeting 50millioninpre−taxsavingsin2024throughworkforceproductivityandoperationalimprovements[52]−Investmentsinlow1,4dioxaneproductioncapacityandthePasadenaalkoxylationfacilityareexpectedtodrivefuturegrowth,withthelattersettobeoperationalbymid−2024[25][55]−ThecompanyisdiversifyingitsPolymerbusinessinChina,movingbeyondtraditionalconstructionmarkets[7]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−ManagementexpectscontinueddestockingintheagriculturalmarketthroughQ42023,withrecoveryanticipatedin2024[43][76]−Rawmaterialcostsarestabilizing,andthecompanyexpectsimprovedmarginsinQ42023,exceptfortheMCTbusiness,whichisstillimpactedbyhigh−costinventory[99]−ThecompanyanticipatesarecoveryinRigidPolyolsdemandandgrowthinSurfactantvolumesdrivenbynewcontractedbusinessin2024[44]OtherImportantInformation−Thecompanypaid8.2 million in dividends in Q3 2023 and has 125millionremainingunderitssharerepurchaseprogram[28]−Inventorylevelswerereducedby55 million in Q3 2023, with plans to further reduce inventories by 25millioninQ4[25][48]−Thecompanydeclaredaquarterlycashdividendof0.375 per share, marking a 3% increase and the 56th consecutive year of dividend payments [31] Q&A Session Summary Question: Customer acquisition trends across Tier 1, Tier 2, and Tier 3 customers - The company continues to see robust growth in Tier 2 and Tier 3 customer acquisition, though market demand and destocking in 2023 have offset some of this momentum [2] Question: Polyols segment margins and China's construction market - Polymer unit margins have stabilized, with sequential volume growth observed from Q1 to Q3 2023 [6] - The company has diversified its Polymer business in China, leading to strong growth in non-traditional markets [7] Question: Opportunities in spray foam and PA production - The company is actively pursuing new customer approvals in the spray foam market, despite overall market conditions [9] - There are no plans to produce PA at the INVISTA assets, as Millsdale remains the sole PA production site [9][10] Question: 50millioncostsavingsplanfor2024−Thesavingswillcomefromoperationalefficiencies,includinglogistics,procurement,andinventorymanagement,withadditionalworkforceproductivityactivitiesplannedforQ42023[13]Question:ImpactofPasadenaplantstartupcosts−ThePasadenaplantisexpectedtoincur7 million to 10millioninadditionalcostsin2024,withbenefitsfromsavingsandproductivityimprovementsexpectedinthesecondhalfoftheyear[62][63]Question:AgriculturaldestockinganditsimpactonSurfactants−Agriculturaldestockinghaslaggedothermarkets,withadouble−digitdeclineinvolumesimpactingSurfactantearningsinQ32023[64][79]Question:Long−termoutlookfortheSurfactantsindustry−TheSurfactantsindustryhasexperiencedunprecedentedvolatilityduetosupplychainconstraintsandinventoryreconciliation,butthecompanyremainsconfidentinitslong−termgrowthprospects[68][93]Question:Grossmargintrendsandrawmaterialcosts−ThecompanyexpectsgrossmarginstostabilizeinQ42023,withrawmaterialcostsnowalignedwithmarketprices,exceptfortheMCTbusiness[99]Question:CashflowandCapExoutlookfor2024−ThecompanyexpectsCapExtoreturntohistoricallevelsin2024,withdepreciationestimatedbetween130 million to $132 million [82]