Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Kevin McCarthy of Banc of America/Merrill Lynch. Please proceed.
Kevin McCarthy - Banc of America/Merrill Lynch
Yes, good morning. Mark congratulations on inking your World-Scale Organometallics joint venture in the Middle East. I was wondering if you could comment on how the 6,000 tons of TEA equivalence there compares to your current capacity and what the capital expenditures are associated with this expansion?
Mark Rohr
Well, the capital in rough numbers would be about $80 million, we think Kevin. Total in that and of courses this is the joint venture and everyone have it's own financing. So, that's our best estimate right now. In that as a percent of the total I won't really give that kind of specific numbers, but if you look at the growth in that region and you look at the diverse phase of our business, its really not any material capacity to the mix here, as we see it anyway going forward. So I would look at this as a industry wide capacity addition, its more satisfying, a huge growing demand in that region and existing capacity is being converted to other products this time as we go forward.
Kevin McCarthy - Banc of America/Merrill Lynch
Okay. And then a follow up if I may for John on Catalysts. I heard you mentioned the 12% sequential sales increase in terms of profit, there was a sequential decline at the operating level. I was wondering if you could help us understand why there would have been a negative contribution margin there?
John Steitz
Yeah, thanks Kevin and that's an obvious and very good observation on the business, because we've worked hard to get a good understanding of that. So if you look at the business sequentially, first; we mentioned the mixed impact in Polyolefin and Catalysts and really as the quarter developed, we kept a very close eye on inventory levels of the basic business and we reduced volume, production volume sequentially which resulted in between 4 and $5 million negative variation in Polyolefin and Catalysts.
So that's the biggest impact. We also had some other smaller impacts one of the JVs had a major customer who had an unscheduled shutdown in the FCC area in South America, that was quite a million bucks. And then we actually... for the last couple years we generated Catalysts business as you can imagine has been quite strong and this is the reference to well the income and sequentially our JV partner did not get a couple of fairly large orders out at the end of the quarter and that reduced income in royalties which is not in minority interest that is accounted for base business and that was just ahead of $3 million impact there.
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