Peter Vanacker: Yes. And we see the future also in Europe. You see also that regulation is progressing in terms of renewable and circular solutions which is actually also what we are focusing upon, I mean, with quite a lot of activities in terms of building [indiscernible], the final investment decision for our MoReTec-1 facility, but lots of joint ventures and feedstock cooperations that we have built up in the meantime. So that in Europe, I continue to believe that these circular and renewable solutions, they demand, local supply chains. So therefore, it will be very important to have such a leading position in a local market with the access to brand owners or EPS business, access to OEMs as well.
Operator: Our next question comes from the line of John McNulty with BMO Capital Markets. Please proceed with your question.
John McNulty: Just a follow-up on the NATPET joint venture. I guess, can you help us to understand in terms of the ability to upscale that with the additional allocation, is it similar in scale or size, would it be kind of the 400 KTA? And also, when you think about the timing of financial investment decision and also how the capital gets allocated? Is it going to be proportional is the same kind of 35%, 65% or is there some different variation to that? Can you help us to think about those?
Peter Vanacker: Yes, the current capacity, as you rightfully said, is around, 400KT so with the other that Ken referred to. We would be able to scale up to in total capacity of 1 million tons. Again, we have 35% of the joint venture. So that 35% is valid for the current capacity, but we can also be valid for future capacity if we take a final investment decision. Ken some more information that you want to share?
Ken Lane: Yes, I’ll just add that part of the synergy that you had talked about before is that region is short of propylene. And so we’re going to have additional propylene capacity with this expansion, which is one of the synergies around potentially executing that. But it will be financed by the joint venture. And yes, it will be proportionate for the shareholders, but we don’t expect to be putting cash in. That’s going to be something financed by the joint venture.
Operator: Our final question this morning comes from the line of Matthew Blair with Tudor, Pickering, Holt. Please proceed with your question.
Matthew Blair: Looking at the 70% payout target versus free cash flow just in the context of increasing CapEx when you’re considering these payout targets, why is the denominator free cash and not more of like a cash from operations. Don’t you need to balance these returns on the growth investments against returning cash to investors.
Michael McMurray: Not sure I fully understand your question, but it’s pretty typical when you’re giving payout targets to give it on the free cash flow line versus operating cash flow.
Peter Vanacker: And then we also, at the Capital Markets Day guided to words, that what is the CapEx level that we are investing so sustainable CapEx around. I mean that $1.2 billion, $1.3 billion a year. And then the growth CapEx, we also said we’re going to be pretty much in the range of our historic spending somewhere between $2 billion and $3 billion on a yearly basis depending on how these projects come. So I think that helps you, to do the back of the unloved calculation, whatever cash flow number you take.
Operator: Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I’ll turn the floor back to Mr. Vanacker for final comments.
Peter Vanacker: Okay. Thank you, again, for all the excellent questions. And of course, I also want to thank our global team for delivering outstanding value and maximizing cash conversion during these challenging times. We look forward to sharing more updates over the coming months with further progress on our long-term strategy. We wish you all a great weekend and stay well, stay safe. Thank you.
Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.
