Document N2vwErdXBDJ7gX05poww0pBw8
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CSUMJSHCOIta E. I. d u Po n t d e Ne mo u r s & Co mp a n y
Ne w p o r t , De l a w a r e 19804
CHEMICALS, DYES AND) PPIIOGMMEENNTI SS DUlELPPAAKRTI MMEtNNTI
ihtAmf " /livp
ke M
P. A. A.
Dl J.
J XP. J.-C. J. L. M. W. D. M. A. E. I. A. G. H.
Hopkins Wriede
~ -
Willette
Hendgfson
Chaney
Deming
Williams
Kafka
Andrejko
Berkemeier -
Hull
C&P "
Wilmington Jackson Lab.
Newport
DU PONT CONFIDENTIAL - SPECIAL CONTROL
C. R. OWEN C&P Department Wilmington
COST REDUCTION FORECAST/ACCOMPLISHMENT REPORT 1983 YEAR TO DATE NEWPORT PLANT
Attached is subject report.
JLBiejp Attach.
L. BALA&0UIDE CONTROL SUPERVISOR
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NEWPORT PLANT
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DUP050145832
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DUP050145833
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COST REDUCTION FORECAST/ACCOMPLISHMENT
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DU P050145834
ACID & AROMATIC PRODUCTS DIVISION
Hydrazine Hydrate - 85%: Late in 1982, we qualified Otsuka of Japan
as a second source. At a price of $1.32/lb. and with 90 day
consignment versus Olin's price of $1.90/lb., we awarded them 50% of
the business. In March, Olin lowered their price to $1.35/lb.
delivered; savings will be $40M/yr.
(AF)
Sulfur
Supply: Despite an increase in sulfur demand of up to 45% at our northeast plants and curtailment of sulfur production by
local refineries, we were able to meet needs. It was necessary to use Canadian sulfur to supplement domestic supplies. Current plans are to bring in a barge or ship load of sulfur from the Gulf Coast to provide a protective stock in case of further local refinery cutbacks.
Savings; The prices for domestic and Canadian sulfur were renegotiated downward several times via competitive bidding.
Rail and truck rates also were reduced by scrutiny of existing schedules. As a result, as of April 1, we are paying $1.5MM/yr. less than we were on January 1.
Tank Car Fleet; All Du Pont leased sulfur tank cars are now in
active service and accumulating mileage and rebate credits to
offset leasing charges.
(LZ)
COLORED PIGMENT PRODUCTS DIVISION
Aceto Acet-o-Anisidine: Late in 1982, we qualified a Chinese
supplier at a price of $2.45/lb. with consignment versus the
domestic price of $2.70/lb., and awarded them 50% of the business.
In February, we opened the remaining 50% for bids. American
Hoechst, matching the Chinese price and agreeing to consignment,
will receive the remaining 50%. Savings will be $30M/yr.
(AF)
BON: American Hoechst is pressing to become a supplier for Newark.
We have approved a sample and have 3,000 lbs. at the plant for
commerical evaluation. They are offering a price of $1.95/lb.
consigned, which equals the price of our current suppliers, Ueno of
Japan.
(AF)
Dry Alum; We have been working with Delta Chemical on bulk
containers to improve handling, reduce dusting and decrease bag
handling. We advised Allied, our 100% supplier, of this activity
and they immediately lowered their price $20/ton. Savings will be
$55M/yr.
(AF)
"Sitol"; We have completed a secrecy agreement and forwarded technical information to Upjohn which we are considering as a second
DUP050145835
N 26477.02
2- -
supplier. With the current shutdown timetable for "Ponsol" of mid-1984, we plan to complete contract negotiations before year-end.
(AF)
Sodium Chromate; Wehavecompleted negotiating with American Chrome
for a 20% reduction in price for 100% of our business. Savings will
total $600M/yr.
(AF)
Sodium Dichromate: With the loss of the chromate business, Allied and Diamond Shamrock lowered their respective prices of dichromate 15% to retain 50% of that business. Savings will be $110M/yr. (AF)
In February, Lonza supplied a spot purchase of 19,000 lbs. at $1.95/lb. for a one-timesavings of $9500.
(AF)
Zinc Oxide; We set up an annual purchase contract and awarded 100%
of the requirement to St. Joe in return for a lower price. Savings
will be $13M/yr.
(AF)
METHANOL PRODUCTS DIVISION
Methanol Catalyst: United Catalyst, Inc. supplied defective G-90B
catalyst to Beaumont causing losses of $200,000 from unusable
catalyst and $300,000 because of start up delay. United Catalyst
has rejected our claim for reimbursement. We plan to invite United
Catalyst to Beaumont to see for themselves the validity of our claim
and to determine how badly they want to retain our business at
Beaumont and other locations. To further strenghten our bargaining
position, we have determined that Katalco Catalyst 23-1 is
equivalent in performance and cost and therefore interchangeable
with G-90B. Further, Katalco is extremely interested in obtaining
the departments business.
(WJB)
Silver Formaldehyde Catalyst: The Belle plant has received 9,290 Troy ounces of heat treated silver needles from Metz Metallurgical. We believe that by the end of the second quarter, Metz will be confirmed as quality supplier.
In an effort to win back silver refining business and -stave off a
loss of needle supply, Engelhard has lowered their silver refining
charge to 0^/Troy ounce and 99.5% of assay, compared to Metz 6^/Troy
ounce. The key variable not mentioned is yield. The Metz yield is
I- 2% higher than Engelhard's past performance. This is worth
II- 22^/Troy ounce at current silver prices. The offer is
sufficiently encouraging that we plan to send a test lot to
Engelhard.
(WJB)
Deer Park Vanadium Sludge; Lake Chemical should reach a decision by the end of April on the timing of the receipt of our sludge (most likely about July 1). Because of reduced demand by Du Pont for
DU P050145836
V
-5-
(AC #9) as an alternate which will save $100M/yr. (It has been
successfully used at Johnsonville.)
(LEK)
Dichlorobutanes: Johnsonville is looking into the use of
dichlorobutanes (DCB) from the Pontchartrain plant which
incinerates this material. Savings will be ** $lMM/yr. with an
additional $1.7MM corporate benefit accruing because disposal
costs would be eliminated. Haskell Laboratory has been asked to
define safety considerations. A procedure for a plant test is
being developed. Also, new facilities will be needed since the
heating value of the DCB is about one half that of present
fuels.
(LEK)
Coal
Quality: The vendors of coal to Johnsonville appear to be giving increased attention to size specification. The plant had no powerhouse opacity violations due to coal quality in February. We will continue to monitor their performance. (LEK)
Alternate Source & Routing: A quotation has been negotiated for
less expensive coal to be barged to Port Bienville (near
DeLisle) and then trucked to the plant. A trial shipment is
being arranged for April. Savings will be about $500M/yr. It
is anticipated that the use of this barge/truck arrangement also
will enable us to reduce freight costs for coke shipments to the
plant.
(LEK)
DEPARTMENTAL GENERAL
Lime: In order to forestall price increases, we are meeting with
vendors to define minimum specifications, favorable freight rates
and sufficient reliable supply, especially for Chambers Works and
Edge Moor.
(LZ)
Sand: Negotiations have been undertaken with several vendors to
insure continuity of high quality sand for normal and electronic
grade silicates.
(LZ)
m
0?/N? Contracts: Several contract revisions are being
negotiated.
y
S' '
Chambers Works - Airco gave notice of cancellation of the existing contract for nitrogen as of 4/23^82^ A new proposal
has been approved by the Subcommittee on Purchases and Sales and contract details are being negotiated.
Niagara Falls - AGA Burdox gave notice that they are cancelling their contract for nitrogen supply and plan to dismantle their
plant this year. A new contract for pipeline supply has been negotiated with Union Carbide. Savings under this contract will
DUP050145837
6- -
be $40M/yr. The Subcommittee on Purchases and Sales has approved and final contract details are being negotiated.
DeLisle - The O2/N2 contract is being modified to increase oxygen capacity to 260 T/D to meet requirements for full plant
capacity. Also, the existing air separation plant is being modified to meet required dewpoint levels for nitrogen. While contract details are being negotiated, Air Products has agreed to credit us for operation of the plant dryers (to meet the
dewpoint) from 11/81, until their dryers are on stream (expected 7/83). Savings will be $28M.
Johnsonville - The Air Products contract is being renegotiated
to consolidate the control rooms of the two air separation
plants, thus reducing the number of operators required. Savings
will be
$100M/yr.
(LEK)
"Dowtherm A" - Du Pont Mixing; Based on our experience and savings
at Newport with mixing Biphenyl and Biphenyl Oxide to make "Dowtherm
A", the M&L Department has proposed that Du Pont contract out the
remainder of the company needs. Additional potential savings to
Du Pont are $635M/yr.
(AF)
Refining General: Heraeus - Midland in Pomona, NY, processes all of Photo Products film (6MM lbs./yr.). They recently suffered a fire that completely leveled their plant. They plan to rebuild with new technology and should be operational by early 1984. This is
important because Photo Products needs will put a strain on available refining capacity and could delay recovery of our material, thus increasing our on-plant inventories.
SIPI in Chicago had a flashback processing some of our organic contaminated catalyst from Memphis. The injured employee (minor
burns) was grossly violating plant safety procedures. Even so, SIPI is reluctant to continue refining this material for us and we are therefore terminating business with them.
Parkaws Internationnal Inc., Houston, TX, has been recovering base
metal catalyst for Du Pont and recently expressed interest in the
organic contaminated catalyst business from Memphis. We are
pursuing tests with them. Also, they remove the organics, not by
burning, but by high temperature distillation. Thus, we may be in a
position to recover both solvents and quinones for reuse by
Memphis.
(WJB)
Consignment/Vendor Stocking Activity: Activities during the quarter included:
Consigned Chemicals - $254M
Newark Plant - $217M
Chambers Works - $37M
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