Document B5pbXYewav92k3ype4ozzENG8

Revised Draft 4/29/94 The Economic impact of the U.S. Vinyl Industry The vinyl industry and its direct customers employ about 100,000 people in the United States. Thousands more are employed in allied and supplier roles to the vinyl industry in such areas as transportation or contract services, or by companies that depend on vinyl as a raw material. Contribution to the U.S. Economy In 1993, Charles River Associates (CRA), Boston, analyzed the contribution that all chlorine-dependent industries, including vinyl, make to the U.S. economy. That study found: * / Number of vinyl fabrication plants: 2,530 / Number of states with vinyl production plants: 46 / Value of sales of vinyl products (1990): more than $3.8 billion / Investment in vinyl fabrication plants: $8.4 billion Net positive contribution to the U5. balance of trade: $206 million Estimating the Cost to Substitute Vinyl Products The 1993 Charles River study also examined the costs to substitute alternative materials for vinyl in 14 major markets and applications. Specifically, the study calculated the amount of material needed to maintain the same market share currently held by vinyl in each application. It also estimated (where appropriate) the capital cost to build new capacity or convert existing capacity to produce that material or fabricate end-products from it, and considered any incremental or additional costs to install the material compared to the current cost to install the vinyl product. The study found: / Estimated additional investment in new equipment: $974 million / Estimated additional cost to consumers for substitutes: $6.7 billion per year Estimated total cost of substitution: $6.9 billion per year CRA further noted that producing substitute materials, particularly metals and concrete, is energy intensive and can create environmental problems. For instance, ductile iron requires large amounts of coke, which creates problematic environmental emissions, as do steel mills and copper and aluminum smelting, CRA did not include the costs required to modify building codes and other regulations if vinyl products were no longer available, nor did it consider the fact that many of these substitutes lack the performance properties vinyl provides (such as durability, fire resistance, weather resistance, etc.). Details of the study over Prepared April 1994 * "Assessment of the Economic Benefits of Chlor-AIkali Chemicals to the United States and Canadian Economies," prepared for the Chlorine Institute by Charles River Associates, Boston, April 1993. R&S 143703 R&S 143704 Exhibit 3-5. Benefits of Chlorine In PVC Products (U.S. and Canada) mmBmm 't | Pip* and Fittings 1 Pressure watar 1 Sewer/drains 1 Duct and conduit | Drain/waste,Vent | irrigation f Fittings and other Fabricated Products j Flooring, textiles, and other 1 calendered | Siding and accessories | Wire and cable 1 Window* and other extrusions I Adhesives | Films and sheet Plastic bottles Other total 700 375 2S5 300 too 160 5tS 4t0 230 305 60 2t0 120 430 4,200 Ductile iron, copper. HDPE Ductile Iron, HOPE, RCP Aluminum, steel Ductile Iron, ABS HOPE, AL, ABS From above Ceramics, carpet, nylon, paper, HOPE, PET Aluminum LDPE, TPO Aluminum Polyurethanes LLDPE. HDPE, TPO PET-Q Mlscetianeous plastics 273 114 24 15S 36 65 147 4 7 0 88 0 59 974 1,587 590 483 774 108 322 1,486 266 61 198 224 36 39 535 6,697 1,642 613 487 806 114 333 1.515 267 61 199 224 54 39 547 6.891 | | y y | | | ] y (1) HDPE - high-density polyethylene; RCP - reinforced concrete pipe; ABS - acrylonitrile butadiene styrene; PET - polyethylene terephthalate; LDPE low-density polyethylene; TPO - thermoplastic olefins; LLDPE - linear low-denstty polyethylene; PET-Q - polyethylene terephthalate-Q. SOURCE: Charles River Associates, 1993. Distributed April 1993