Document 4J9090OZj10QDJ24xKre5q7R1
Denison Pipe Plant F. 0. Report 59*1** March 19, 1959
FIBRE BLEND CHANGES
PURPOSE
To estimate the effect on Division earnings due to proposed fibre blend changes for 1959-
DATA
Effective January 1, 1959, the price of Jeffrey fibres increased, the substitution rebate to the Pipe Division on 6d fibre usage was discontinued, the price of Munro fibre increased, although the discount will new be allowed at plant level so that cost to the Division will remain the same. In addition, a 3$ exchange rate is to be applied to the mines' billing price in Canadian dollars to convert to U. S. dollars
Concurrent with the foregoing changes, it was announced that J-M had sold interest in the Rhodesian mine and new fibre blends were proposed and put into effect in January whereby the M blends to be used in 13' machine products contain no Rhodesian fibre and the C blends to be used in 10' machine products were changed to use up the Rhodesian fibre in inventory, mis we estimate will take 8 months, after which the C blend will again be changed to eliminate Rhodesian fibre usage.
Following is a comparison of previous and proposed blend usages we feel will occur in 1959:
10* Machine Products
Fibre
Previous C-203
Tons Cost
C-210 Tons
Proposed
(8 mos)
C-209 (kaoe)
Cost
Tons Cost
Blue Munro **Y Rhodesian Jeffrey *tT Jeffrey 6d
Total
117 $ 29600. 321 6435**. 290 52322.
W $146276.
39
$ 9867.
17 $ 4301.
231
U63U. 1U0
28067.
15** 27785.
77
17000.
35
7727.
a
**195.
501 $100963*
$ 44290.
Estimated Savings
$ 1023.
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13* Machine Products
Fibre
Previous
M-558
Tons
Cost
Proposed
M-367
Tons
Cost
Blue Muuiro 4y Rhodesian Jeffrey 4t Jeffrey 6D
Total
1355 1050
355 860
753 537T
$ 342801. 210304. 64049.
189871. 90255.
$ 897480.
1277 1093
910 1093 *373
$ 323068. 219125.
200910. 131007. $ 874110.
Estimated Savings
K'1 '
$ 23370.
CONCLUSION
It is estimated that the Pipe Division has the potential of achieving a cost reduction of about $24400. in 1939 thru use of prppoi ted fibre blend changes at this plant.
Prepared by: L. C. Stenger, Jr.
Distribution:
J. L. Durkin C. D. Maguire (2) T. R. Turnbull K. J. Whalen (2) R. F. Orth Analysis Department (2) Pipe Finance Managers J. E. Be see G. E- DeLong
Denison Finance Office Pipe Division
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