Document Ld0xd2jN8p8030XRNY438exQ

ANACONDAZINC OXIDE DEPARTMENT C,v - > -r INTERNATIONAL LEAD REFINING COMPANY omet or otHeRAi. s a l e s k a h ao e r GENERAL SALES OFFICE EAST C"`CAGO. INO. Pl a n t s : AKRON. 0>0 CAST CHICAOO.'NO. January 3rd, 1929. Mr. Robert 2. Dwyer, Tice President, International Lead Refining Co., 25 Broadway, New York City, N.Y. Dear Mr. Dwyer j A report on white lead sales Is now available showing the approximate results for 192S. Tho tonnago sold now stands at 9,201.9 tons. This, of course, Is subject to slight inventory adjustments and to an addition for agency sales. These adjustments, of course, will be small and we can therefore assume an inorease of 3ales over the S972.3 tons for 1927, of approximately 2,230 tons. From the standpoint of profit the 1928 results are enoouraging. Prom a deficit of $70,643.34 after depre dation for the year of 1927, a profit of between 40,000.00 and 45,000.00 will be shown for 1928. The average margin be tween pig lead and white lead was not exceptionally good for 1928 so that the results are not what I would call normal. Due partly to the tonnage sold, the Operating Department was able to run at capacity a large part of the year. There wa one period of curtailed produotlon In" the early months of 1928, but since then operations have been on a maximum basis. Working cost due to oapaolty operation as well as economyworked out by the Operating Department has shown a oontinual reduction. The average operating oost Tor 1927 including de predation was approximately #44.50. Jor 1928, the average January to June was 44.629. Slnoe that average was established, a oontinual reduction hae been shown until November had a work ing oost of 38.786 inoluding depredation. These results are extremely gratifying and the Operating Department especially deserves a great deal of credit for the results. The outlook for 1929 is rather uncertain. There are some favorable factors and some not so favorable. Rather than make any statements that are unwarranted, I think the best plan is to enumerate a few of the important factors and leave the rest to the future. It is not unlikely that we may increase our sales for 1929 over 1933, but I feel at this writing that the PNYC00003297 N12838 January drd, 1:<9, choncs3 ora rather for a slight decrease. The result hinges prim arily on questions yet undetermined. Tlrst and foremost the pig lead market is the vital faotor. The higher the white lead price the more substitutes are used, hence the great difficulty in maintaining a proper different ial over pig load when pig lead is too high. On the other hand a fairly hlgh'plg lead market brings the customers on a differential basis up to approximately the card price for white laad. la ex ample of this is ths Pittsburgh Plate Glass Company. They buy principally from the National Lead Company. Slnoe we have taken over the sale of white lead, we have been able to introduce our pro duct for a oertain high grade premium paint that they desire to make. Store of our lead will go into this paint when our prioe is close to National than when the differential is large. Por this reason on a high pig lead market, we might sell a larger tonnage of lead to Pittsburgh Plate Glass Company and yet not show any profit. Another unfavorable factor pertaining to the sales for tie coming year is tha activity of the (Hidden Company in the dry oolor market. Glidden's production of dry oolors at the A. '.Vilhelm plant at Reading, Pa., has given Mr. Joyce the idea of marketing his material to his paint competitors. Prices have been reauoea as a result and profits on oolors have vanished. At the present writing neither Glidden's factory nor anyone else can make anything on dry dolors. Apparently Glidden Is going to back down to a certain extent but I have every reeeon to believe that they will demand a oertain price for such action. This price will pro bably be the purchase of Nuston lead by the oolor makers for the manufacture of certain dry oolors. To date this has prevented us lotting an additional four or five hundred tons a year from the United Pigment <1 Color Company, and it may mean the loss of the four or five hundred tons we now have. Our only recourse In such a situation is to stress quality, service and keep our eyes open for any opportunitiea. .Vnothor adverse faator has been at least the tem porary loss of the U.S. Gutta Peroha account at Providenoe, R.I. a variation in TioooBity of our laad when ground in oil used for outside white paint has prevented us from getting a renewal of this oontraot. This is being studied by the Operating Department and if they can furnish a lead of uniform quality and guarantee it, we may be able to get the business again. This difficulty may or may not date back to the change in drying with ths Lourban Crier and other equipment. 3ut whatever the oause, I feel oertain that our Oper ating Department will eventually solve the problem although it may coat us tha throe hundred tons a year from this company for 1929. There are several favorable factors affecting our white lead market situation, he have Just completed a change over in. our policy that eliminutea all oarload prioes. Prom tne.stand point of Justice, a carload prioo is certainly warranted. 1 !l. PNYC00003298 n .the standpoint of the location of the National Lead Company's plants and resulting competition, it is not the practical thing to hate. The net result of this to us sill he negligible from the standpoint of profit. However, if the market conditions are improved, it should in the long run result in an increase in the differential between pig lead and white lead. Another favorable factor ia the purchase of a Louisville faotory by Devoe & Reynolds. They are now getting under way on the Devoe formula and this should mean more lead for cur good customer. There are also other numerous small pros pects that we hope to get but the large oarload buyers that are available are few and far between. Some of those that we do not have are owned partially by 3agle Richer or someone else or are located next to a National Lead Company's factory where they can get lead in oil in truck loads. One or two like the Pittsburgh Plate Class Company are such large users that they can get a lower or ice than we oan offer. A large paint corporation has just been formed on the Pacific Coast. This oonsists of a merger of nine plants scattered from Spokane to San Diego. For some reason the National Lead Company through their subsidiary, the Bass Hueter Company of San Praaoisoo, apparently did not get any of their money into this company. The same ia also true of the W.P. Puller Company of San Prancisco. Due to the friction between these two principal pro ducers of white lead and their competitors, we stand a good chance of getting most of this new corporation's business. The Sagle Picher Lead Company is the only serious contender and I do not have any worry about them because of the better quality of our product, if some of the producers of white lead do not get an opportunity to invest some of their money in stock of this corpor ation, and we are successful in getting the business, it may go a long way towards counteracting some of the adverse factors affecting our sales for the coming year. To sum the situation up, I feel that the outlook for the white lead is the best it has been sinoe we have had the sales. If there is any possible way of doing it and at the same time making money, white lead- sales for 1929 will be equal to pro duction capacity. 70C:ea. v~w; u..u..:. 3.B. Thayer, Vary truly yoi^;.'' y / 'S i ^ Manager. Hr. Frederick Lai'st. PNyc 03 i99 *