Document MMXGX2be7mvMn31Zea94enGKj

CEP.TAIN-TFgD PRfiniTCTS CORPORATION Notes on Discussions in Montreal 1975 Fibre Requirements A SN A. Prellginarv Discussions - Afternoon of 9th Seotenber 1974 Prui&t: Mr. R. V. Milts Mr. M. Dorais Mr. V.J.Y. Smith Mr. M. 7. Hows In June Certain-teed bad put their 1975 fibre requirements at 45(000 tons Chrysotile and 5000 tons Blue. Mr. Miltz now thought that their requirements could be aa high as 52,000 tons, largely because of 1974 shortfalls. Partially to offset these and to obtain a better Imovledge of Russian fibres, they have ordered 1,200 tons of P3# P4 and ?5 for c shipment in September; these were ordered through Huxley c Development Corporation who are presumably agents of Soyuspromexport in U.S.A. In spite of doubts about con sistency of quality, I told Mr. Miltz that, in my opinion, they were right to investigate the possibilities of obtaining a useful tonnage of Russian fibre in 1975. and I promised to find out from Cape details of the contract conditions imposed by the Russians. It is pdssible that . Mr. Miltz will be visiting Moscow later this year in com pany with Mr. Novak of Huxley. I gathered also that they have bought a modest tonnage of Rhodesian fibre this year but none is promised for 1975* In view of their probable need for more tonnage in 1975 Mr. Miltz hoped for a firm commitment by Casslar for at .least 35,000 tons but Mr. Dorais explained again the ` currant problems of Casslar and streeaed tLv- impossibility of a firm* commitment above *20,000 tons, although there was a good prospeet of at least 28,000 tons being shipped with a slight prospect of aore. _____ ______ [ Hr. Miltz was again offarad 3*000 tons of HVL/3 and HVL/4 and 2,000 tons Bell's 4T-500, although Mr. Dorals stressed that the latter could only ha supplied on the basts of a firm five-year commitment. Mr. Smith also confined that, in preliminary discussions with Asbestos Corporation, he had their undertaking to offer 3*000 tons of good 4 grades. These would, however* have to be the basis of a five-year contract. While Mr* Miltz accepted the need for a five-year contract for Asbestos Corporation fibres, he was very reluctant to accept such a commitment for Bell's 4T-500. This is, no doubt, due to the fact that they regard Bell's 4T-500 as markedly inferior to Casslar grades. For similar reasons he was reluctant to commit himself to the 3*000 tons HVL/3 end HVL/4 until they have had a chanea of running the Havelock fibre being shipped in 1974. Z stressed that a decision would have to be taken fairly soon about Havelock fibres, although Z did not request a long-term contract. Mr. Miltz wondered whether there was any possibility of their obtaining more than 3*000 tons of Asbestos Corporation fibre on en option basis, since their requirements could grow further if they decide to go ahead with a new plant in Arizona. Zt was agreed that this prospect would be discussed at the meeting with Asbestos Corporation on the following day. B. Discussions with Asbestos Corporation Ltd. - Morning of ' 10th Seotemoer 1974 Present: Mr. M. P. Carson Hr. R. V. Miltz Mr. M. Dorals Mr. V.J.Y. Smith Mr. M. F. Howe In his preliminary comments * Mr. Carson nantioned the need for a long-term contract to cover the requirements of Certain-teed, stressing that a large proportion of their future production was being tied to long-term sales contracts. Mr. Miltz confirmed his willingness to accept a firm commitment for 3,000 tons of Asbestos Corporation 4 grades per annua over a five-year period and wondered whether there was any possibility of their contracting for 10,000 tons in 4s and 3's. Mr. Carson felt that this would present considerable problems, although they would do their beat to supply in excess of the contract tonnage of 3,000 tons in each year. It was then agreed that Certain-teed would indicate prior to the coaaenc ament of each contract year the additional tonnage that they might require end Asbestos Corporation would then determine hpw far it was possible lor them to assist. c c f (^ V Mr. Carson then confirmed the grade* and' tonnages vhich would fora the basis of the five-year contract. They were:- H-EX-326-4J SC--47 1,000 tons 1,000 tons teiuo) . 5*000 *"** * Mr. Carson stated that most, if not all of the tonnage, would be in BL-4-110 but they reserved the right to simply soae K-4-110 if necessary. She current prices of the three grades are:- Per Short Ton F.o.b. Cars H-2X-32S-4J BC-4T BL-4-110) . N--4-110y * Can. 3 , 388.00 * 342.00 358.00 Mr. Carson announced that the price of* the 4-110 grades would probably rise in relation to 4T, daialng that at present they were underpriced. Z suggested that this was not too satisfactory an arrangeoant for a long-term contract, since the sellers were presumably reserving the right to move this price at will. Mr. Carson said that they had so intention of increasing the price very much more than that of 4T and must reserve the right to some price adjustment. Mr. Kiltz appeared to be satisfied with this verbal undertaking. Mr. Milts wants to have a carload (50 tons) of each grade (except N-4-110) despatched to the Ambler plant as soon as possible for factory trials. Mr. Carson said that, while their commitments are extremely heavy for the next sonth or two, they would do their best to arrange these carloads quickly. Because of an inter-mine discount, Bell are anxious that the Asbestos Corporation fibre should be supplied through them; this is acceptable both to Asbestos Corporation "d to Certain-teed. Letters of Intent covering the contract between Certain-teed and Bell and between Bell and Asbestos Corporation will be drafted and approved as soon as possible. During the discussions with Mr. Miltz, Mr. Carson referred to production at Nordenhaa. He aald that the mill is now ' on a 3-shift baala and production during 1974 ahould total between 75.000 and 80,000 tone; in 1975 be la hopeful that the production will be at laaat 110,000 tone hut this aaauaea a larger proportion of the aborter grades NH-460 and NH-470. With the fhetford production of Asbestos Corporation running at 365,000 tons, Mr. Caraon claimed that their combined production now exceeds In value that of Johna-Manvillt He hoped that It night be poaalble for aoae Nordenhaa fibre to be supplied to Certain-teed plants, mentioning that they were already making shipments to Mexico. Zt would seem, however, that the landed prices of Nordenhaa grades la U.5.A. would be relatively very high because of Nordenhaa's pricing policy and their unwillingness to modify their ex mill prices to compensate for the freight from Nordenhaa to overseas ports. If Asbestos Corporation offer Certain-teed Nordenhaa fibres against any excess requirements of Certain-teed, they would probably be of Interest only if the fibre supply position of Certain-teed was extremely critical. M. 7. HOVE MFK/VFV 17. 9.74