Document LVVZoLm2bqDRQeGyMQXE7neb
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Interoffice Communication
to J. R. Pavo - Houston
From J. A. DeBernardi
Date January 16, 1981
subject
Quarterly Reforecast of Production, Cost Variances, and Raw Material Requirements - 1981
The subject reforecasts are attached. Explanations of the reforecasted numbers are contained in the notes following each reforecast.
J. A. DeBernardi
is Enc CC + enc: RDG-REL-WCK-WHC-JJL-RJA-JGD-JHB-JWW-JRH
CCR 000080371
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WC-2-7a 1st Quarter Reforecast Notes - 1981 1) The forecasted productions for EDC and VCM reflect the projected market
limitations for 1981. 2) The forecasted incinerator HC1 production deficit for the first and
second quarter reflects 1) the lack of continuous light ends firing, and 2) the fact the concentration unit has not been placed in operation. Routine light ends firing and operation of the concentration unit are projected for mid-second quarter.
CCft 000080373
............. . m:i :cast or plant variable costs m) .. ...... QuorterFi^^l- - ... .Year (9&\ --------- Plant \JC#\ A
WC-2-7b
1st Quarter Reforecast Notes Variable Costs 1) The net favorable efficiencies for EDC and VCM reflect the unbudgeted
savings that will result from the Recycle EDC By-Pass project which is projected to be brought on line during the first quarter. 2) The unfavorable third quarter efficiency variance for EDC reflects the project unfavorable variances resulting from a third quarter 1981 turn around. 3) The net unfavorable efficiency variance for 1981 in the incinerator area ($157.7M) is due to a projected second quarter start-up of the acid concentration unit (as opposed to the budgeted 1980 start up). Fixed Costs Payroll The favorable variance is based on not using the budgeted casual employees (3) in the incinerator area for the year.
MM&C
The favorable variances are due to eliminating $290M in discretionary projects from the extraordinary budget and one budgeted painter for the year. The variances also reflect no extraordinary expenditures in the first quarter and the remaining extraordinary expenditures distributed evenly in the last three quarters.
CCR 000080375
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WC-2-7C
1st Quarter Reforecast Notes - 1981
1) The quarterly reforecast for raw materials is:
Quarter, 1981
First
Second
Third
Ethylene (lbs./lb. VCM) Chlorine (lbs./1b. VCM)
0.4748 0.6421
0.4727 0.6403
0.4788 0.6914
Fourth
0.4753 0.6788
2) The less than budgeted chlorine requirements for the first and second quarters reflects the fact that it will not be necessary to transfer HC1 to the Methyl Chloride Unit for VCM production maximization/MeCl stream factor.
3) The higher than budgeted chlorine and ethylene requirements for the third quarter result from the projected unfavorable variances resulting from the third quarter 1981 turnaround.
00009317 GC*