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' i* UCC 005156
UC 149-2 (780)
UNION CARBIDE CORPORATION
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4 1983
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100 OCEAN GATE, LONGB-BlCH, CALI FORNIA 9030:
To (Name) Division location
G. L. Dickson Metals Division Pittsburgh, FA 15205
Copy to
J. E. Walsh, ATLANTA J. T. Kelly, DANBURY G. M. Lincoln, DANBURY W. C. Thurber, DANBURY
Date Originating Dept.
October 3, 1983
Answering letter date
Subject
The data presented in this Product Review will indicate the importance of SG-100 sales to the overall quality of the "CALIDRIA" Asbestos business. As the attached report. Table I, Sales and Financial Summary, reveal, 1978 was a banner year regarding total tons shipped; net income; ROS %; and ROA %; but a poor year for Cash Generated $M (400), which can be accounted for in part by a growth in receivables and inventory. Of the 35,500 tons shipped in that year, 19,581 tons SG-100 was shipped for the production of VAT (Vinyl Asbestos Tile).
Although the domestic VAT Market has decreased, a substantial VAT Market may exist off-shore and an expansion of the Japanese technology on Extrusion Molded Asbestos/Cement Sheet to other markets in South East Asia and Europe could return the King City plant closer to the 1978 high production mark. This report will also briefly review the shipments of Canadian Grade 7 asbestos into the principal markets of the United States and similar asbestos shipments of Grades 6-9 from Canada to worldwide importing countries including the United States.
I. VINYL ASBESTOS FLOOR TILE (VAT)
There has been a significant decrease in overall sales from a 1978 high of 19,581 tons (includes export sales of 2,521 tons) to present FCST IV estimate of 8,150 tons domestic, 1,000 tons export. This decrease in sales is accounted for by the withdrawal from VAT production of Armstrong Cork, Flintkote Co., GAF and ULVALDE Co. Remaining domestic producers are Kentile Floors, Inc., (FCST IV estimate 8,150 tons) and Amtico, Trenton, New Jersey (estimate potential 5,000 tons). Amtico is difficult to sell because of our higher cost and freight disadvantage. Most recent figures are:
CANADIAN ASBESTOS "CALIDRIA"
BASE PRICE TON
$ 95.00 $150.00
TRANSPORTATION TON
$54.00 $83.00*
DELVD, PRICE TON
$149.00 $233.00
*Recent United States Lines rate for container shipments.
UCC 005157
s
G. L, Dickson
SG-100 PRODUCT REVIEW
The potential for SG-100 sales into VAT producing locations exist in the export market which is largely undefined. However, we have knowledge of VAT potential in Mexico:
Losetas Asfalticas, S.A. Euzkadi, S.A.
Total
2,000 ton 1,800 ton 3,800 ton
Both companies are active prospects.
Potential exists in Columbia, South America.
Pavco, S.A.
1,000 ton estimate
Pavco, S.A. is an active prospect.
VAT potential also exists in Argentina and Brazil.
Tomoe Engineering is exploring VAT potential in Korea, Taiwan, Thailand and other areas of ther new geographical responsibilities.
VAT markets also exist in the United Kingdom and Europe. An estimate of "CALIDRIA" potential would be 10,000 to 15,000 MT/year. With the severe tightening up of enviromnemtal regulations in Great Britain, 1.0 F/ML, effective 1/1/83; West Germany, 1.0 F/ML; the potential use of our SG-100 pellets could make compliance to the newer regulations a distinct reality. Certainly our timing could not be much better.
II. NON-VAT MARKET POTENTIAL
Several years ago Tomoe Engineering developed a new market for SG-100 in Extrusion Molded Asbestos/Cement Sheet. Current customers in Japan are Nozawa Co.; present sales of 2,600 ton/year and Showa Denko; 1984 budget of 840 ton/year. Several other prospects are in various stages of discussion/evaluations.
Normally the SG-100 is blended with competitive asbestos fiber (Nozawa Co. Russian Asbestos Grade 5 and SG-100), and Showa Denko (Canadian Asbestos Grade 6 and SG-100). The use of SG-100 is said to improve surface smoothness and dimensional stability. This is a good growth market in Japan that is expected to grow to 10,000 ton by 1988.
The extrusion molded A/C market should also exist in other countries of South East Asia. In Europe there are from 2-6 producers including VEB Ashestzementwerk Porschendorf in Germany.
UCC 005158
G. L. Dickson
SG-100 PRODUCT REVIEW
III. CANADIAN ASBESTOS SHIPMENTS
Table II lists a 5 year review of United States Asbestos consumption by end-use. Since "CALIDRIA" competes in only the Grade 7 classification. Grades 1 through 6, the longer fiber grades, are not listed. It is important to note that "CALIDRIA" competes in only a small segment of the overall Grade 7 market. For example, of the 49 M/ton imported into the United States for Flooring Products, approximately 15 M/ton is consumed in VAT. The balance of that market area utilizes the longer portion of the Grade 7 in a backing compound for vinyl sheet flooring. Further, because of the extreme shortness of our fiber we do not ship into the friction products market nor packing and gaskets.
Table III indicates total 1982 Canadian asbestos shipments of Grades 6-9 on a worldwide basis. Grade 7 shipments would account for approximately 90% of the overall total figure of 420 M/ton.
!V. SUMMARY
If we accept the premise that the quality of our business is higher the greater the sales of SG-100 grades, and the attached data support the potential for greater SG-100 sales, then our concentrated efforts should be toward further development of our Floor Tile and Extrusion Molded A/C Sheet business.
Please let me know if you have any questions or comments.
Very truly yours.
TPN:vc attch.
T. P. Norris
UCC 005159
TABLE I
KING CITY ASBESTOS OPERATION FINANCIAL SUMMARY
1978
1979
1980
1981
1982
1983 BUDGET
'CALIDRIA" Asbestos SG-100-104, Sales (tons)
35,500 29,220 29,756 27,874 19,166 19,334
Domestic Export
17,060 13,890 14,810 14,575 2,521 2,914 3,351 3,000
8,310 3,244
6,200 3,600
Total
19,581 16,804 18,161 17,575 11,040 9,800
NIFS, $M GM, % Net Income, ROS, % ROA, % Cash, $M
7,156 41
1,190 17 25
(400)
6,360 38
1,041 16 20
1,200
7,175 30
827 12 17
800
7,652 32
1,227 16 21
400
6,520 26
948 14 15
1,200
7,411 32
651 9
12 400
1) IBM Sheets
Source
2) JLM report 6/83
UCC 005160
TABLE I
KING CITY ASBESTOS OPERATION FINANCIAL SUMMARY
"CALIDRIA" Asbestos Total Tons (All Grades) Includes SG-100-104
SG-100-104, Sales (Tons)
Domestic Export
Total
NIFS, GM, % Net Income* ROS, % ROA, % Cash, $M
1) IBM Sheets
Source
2) JLM report 6/83
1978
1979
1980
1981
1982
1983 BUDGET
35,300 29,220 29,756 27,874 19,166 19,334
17,060 13,890 14,810 14,575 2,521 2,914 3,351 3,000
8,310 3,244
19,581 16,804 18,161 17,575 11,040
7,156 41
1,190 17 25
(400)
6,360 38
1,041 16 20
1,200
7,175 30
827 12 17
800
7,652 32
1,227 16 21
400
6,520 26
948 14 15
1,200
6,200 3,600
9,800
7,411 32
651 9
12 400
UCC 005161
TABLE III
1982 TOTAL CANADIAN SHIPMENTS ASBESTOS SHORTS, GRADES 6-9
United Kingdom Ireland Austria Belgium - Luxemburg Denmark Finland France Germany, West Greece........ Italy Netherlands Portugal Spain Sweden Switzerland Czechoslovakia
Hungary Emirates, U.A. Israel Saudi Arabia Turkey Egyptian A.R. Kenya Nigeria Tanzania Algeria Angola Zaire Liberia Sri Lanka Hong Kong India Malaysia Pakistan Singapore
TONS 17,558
559 200 5,684 2,272 453 13,308 17,081 353 1,556 1,280 3,364 2,942 926 804 1,334 327 650 485 562 226 1,498 123 2,446
51 46 450 53 16 928 970 10,978 1,666 160 1,195
Burma Indonesia Japan Korea, South Philippines Taiwan Thailand Australia New Zealand Argentina Bolivia Brazil Chile Colombia Ecuador Peru Uruguay Venezuela Bahamas Barbados Jamaica Leew-Wind Is. Trinidad-Tobago Costa Rica Dominican Rep. El Salvador Guatemala Honduras Mexico Nicaragua Panama Puerto Rico United States
TOTAL
Source: Asbestos Bulletin, March-April, 1983
TONS 1,021 1,035 68,878 4,862
626 6,572 7,610
804 285 4,156 319 7,202 1,750 7,369 2,192 1,618 357 4,401 180
2 27 321
4 140 126 622 619 309 13,097 535
5 198 191,031
420,777
UCC 005162
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