Document DDd19KjEzejY1agkaypN2aGXo
VIC 149-2
INTERNAL CORRESPONDENCE
PLAINTIFF'S EXHIBIT
METALS DIVISION
To (Nome)
Div/s ion Location
Hoof Number
Mr. R. L. Folkman Building 38th Floor
Copy to
Dr. F. J. Shortsleeve
270 PARK AVENUE, NEW YORK, NEW YORK 10017
Dote Originating Depf.
October 27, 1980 * RECEIVED
i
Ffoor Number Answering teller dote
OCT " 71980 " J. SHORTSLEEVE
Subject
1981 Asbestos Budget
The objective set for the Asbestos Business during the St. Louis Budget Meeting is to increase sales income so that rising plant costs are offset, and to project a 1981 percent gross margin equivalent to that now estimated for 1980 (about 30%). The attached revised sales budget will provide the income necessary to meet this objective.
The revisions include the addition of new sales; increasing the volume of some existing accounts and increasing prices by an average of 17.9 percent. John Myers is preparing the necessary requests for authoriza tion to increase prices.
The magnitude of the increase in income required to offset the rapidly escalating costs is a graphic illustration of what is happening to energy costs in California. The actual increases in the cost of energy in California are comparable to what is being experienced everywhere in the Western World, but in California a disproportionate part is passed on to industry and the individual consumer is purchasing energy at less than cost* This has happened quickly and its full impact is not yet clear, but California energy intensive industries may already be non-competitive. Increasing prices as required in the 1981 Budget will be a test of King City asbestos products in this respect.
A significant part of the increased volume in the revised budget is floor tile filler for GAF. We have supplied some product to two GAF locations since Atlas ceased operation. One location is in the east and it is not possible for UCC to compete with Canadian short fiber at this location. Atlas did compete and perhaps this added to their eventual demise. GAF has always been a price buyer and it is likely that GAF will continue to buy from UCC only until they can work out the technical aspects of switching from Coalinga fiber to Canadian short fiber.
UCC 025364
Mr. R. L. Folkman
-2-
Octobex 27, 1980
All things considered, the risk associated with the budget attached is high. In an attempt to quantify the risk, the price and volume changes have been rated roughly as to the probability of attainment and the ratings
are summarized as follows;
Sales, M$ Cumulative, M$
Probability of Attainment
1980 FcstIV
7,317 1,447
80 512
7, 317 8,764
8, 844 9,356
1.00 . 85 . 50 . 25
This is probably an optimistic assessment.
RWRiac Att.
UCC 025365
Calidria Asbestos 1981 Sales Budget (JLM Revised Oct. 27, 1980)
Product
Budget
Tons
$M
CL Prices, FOB Plant, S/T
Current Planned
% Increase
SG-103-5 (1) -7
(2) -9 SG-104 -130
(3) -200 -210
HPP HPQ (3) RG-100
-110 -144 -244 CSV SHUR (4) UNIVIS
1500 3600 1800 10400
200 368 300
20 740 570 220 400 440 3300 1140 500
198 487 238 1206
39 63 75
4 185 399
59 280 1408 594 205
90
122 122 122 106 170 160 220 204 220 560 240 560 2500 160 160 160
132 132 132 116 194 176 2 50 224 250 700
270 700 3200 180 180 180
8. 2 8. 2
-9. 1 14. 1 10. 0 13. 6 9.8 13. 6 25. 0 12. 5 25. 0 28. 0 12. 5 12. 5
Dorn. Total
25490 5530
SG-100-EX -130-EX -210-EX
AS-200
HPP-EX HPQ-EX T- 135-P-EX RG-144-EX SX-14 (5) RG-244-EX (6) SX-24
3100 180 0
1100 2640
480 100 250 90 400 570
409 34 0
174 533 120
71 175
44 1212 1054
125 164 -- 144 184 220 648 560 390 2300 1500
132 188 -158 202 250 710 700 488 3030 1849
5. 6 14. 6 --
9. 7 9.8 13.6 9.6 25.0 25. 1 31.74
23.27
Exp. Total
8910 3826
Total
34400 9356
Average Price Increase
17.9
(1) Assumes 300 Tpm to GAF-lb. and/or Flintkote (2) Assumes 150 Tpm to GAF-VG (3) Assumes no commission to Haxwick (4) Assumes Montello finds packager and promotes UNIVIS (5) Assumes $2800/T for TEC and $3000/T for others (6) Assumes price of $1700/T on 10/1/80 and $1900/T on 7/1/81
UCC 025366
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