Document 3NLDkRJadGKaMXkR99wMwv2D0

MITSUBISHI MONSANTu CHEMICAL COMPANY FROM LOCATION = Tokyo DATE = January 7, 1970 SUBJECT REFERENCE : Mr. Howard S. Bergen * St. Louis, Mo. Messrs. * D. A. Olson * D. Danna Dear Howard: Attached is a xerox copy of a recent study of the hydraulic fluid and potential Pydraul market in Japan. You will note the heavy dependence on phosphate ester-based fluid. The assumption has been made that the Aroclor content of Pydraul would be about 50%. However, this can be drastically changed if these products are re- formulated. The total demand for hydraulic fluids is growing at an attractive rate. The participation of Pydraul is most uncertain, however, because of the re-formulation, testing and qualifying which will be required, the net effect for MMK seems to be that we can only stand by until the situation is defined in St. Louis. I have told my people here that at least six months will be required for research work on re-formulation. Nevertheless, I shall be most interested in receiving progress reports or any summaries of your modified business strategy. Best regards JRD:fu Enel. * Du r land DSW 150364 STLCOPCB4039805 M__IT_S_U__B_I_S_H_I__M/ ONSANTO CHEMICAL COMPANY FROM LOCATION Tokyo January 6, 1970 SUBJECT REFERENCE PYDRAUL-JAPAN TO : Dr.-J. R. Durland Tokyo cc: Messrs. TNalca ta- Toky o Y. Fukuei- " I am sending you a briefed package of information on the PYDRAUL market in Japan to supplement our discussion on this subject between you, Mr. Nakata and myself a few weeks ago as attached. Your examination and comments will be highly appreciated. And, in view of the increasing public concern on water pollution by PCB in the States, (cf: Quarterly ReportJuly, August, September-of M.D.) we would like to know the Organic Division's comments on whether or not the business strategy of PYDRAUL' products will be revised. : uh DSW 150365 STLCOPCB4039806 Market of Uninflammable Functional Fluid (Unit: l,000kl) Size of Market Type of Fluid Water glycol Synthetic (*) Present (1969) 2.0 0.5 After 5-year (1974) 3.3 - 4.7 1.7 - 2.3 Total 2.5 5.0 - 7.0 note(*) Ratio of Phosphates/Pydraul at present is approximately 4/1, however, it would be changed to 1/1 in five years if our promotional efforts in the market development for Pydraul products can be made successfully. (2) Briefing on the hydraulic equipment industry in Japan. The Hydraulic Industry Institute of Japan made an intensive study on the market for hydraulic equipment in Japan. . a) The growth rate of the hydraulic industry in 1972 in comparison with 1967 is, as shown below, 190%. Civil engineering, construction, mining machineries. Industrial wagon Agricultural equipment Special wagon General machines Metal, primary product mfg,machines Metal, secondary processingmachines Plastics processing machines Ships 217% 207 237 203 167 124 149 181 161 Total 190% b) Hydraulic apparatus and equipment production index compared with other industries' production index DSW 150366 STLCOPCB4039807 . Iucitrx of ;>p!-iction figure c.<j:r.;orci DSW 150367 STLCOPCB4039808 (3) The following Mr. T. Ishijima's information, cited from S.M./JRD: 4/14/'69, will also be useful for your understanding of PYDRAUL market in Japan. a) Sales estimation of fire-resistant hydraulic fluids (Unit: K litre) 1967 1968 1969 1970 1971 1972 1973 Pydraul 38 86 200 360 560 800 1,040 Other synthe tics 160 270 360 440 560 680 840 Water-glycol 1,200 1,500 1,800 2,100 2,300 2,500 2,700 Emulsion 600 680 800 920 1,040 1,200 1,360 Total . 1,998 2,536 3,160 3,820 4,460 5,180 5,940 Sales estimation of Pydraul (Unit: t) 1967 1968 1969 1970 Pydraul 43 96 220 400 Aroclor content 22 . 46 110 200 Sales amount (M, net m;.;k) 60 100 1971 630 315 150 1972 1973 900 1,170 450 210 55 260 c) Status of synthetic hydraulic fluids competitors Manufacturer (Imports) Stauffer (Ando Jimusho) Mobil Shell (Domestics) Idemitsu Trade name Cellulube . Pyroguard SFR Market price Note 520 - 530/litre ' . Occupy 90;.: share of synthetics, tc be produced domestically in 1 year 470 - 480/litre 470 - 480/litre Fireproof -3 - 380 - 450/litre began practice ` activities in 1969 DSW 150368 STLCOPCB4039809 Kyodo Petroleum Hydria 470/litre note: Pydraul Water-glycol Emulsion 400/litre 260 " 165 " Synthetic hydraulic fluids mentioned above are said to consist of Phosphate esters, mainly TCP. Phosphate-base fluids need to be added with some additives to improve viscosity index(no need to Pydraul), and minimum price of the fluids might be 450/litre. On the other hand, Pydraul need to be sold at 350/litre to compete with them. Flushing cost(incl. profit to dealers) at the time of initial filling will be 100/litre on the average. (Accordingly MMK net price will be 250/litre) DSW 150369 STLCOPCB4039810