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CAMC-Logiudice-001134
Is
S UMMARY
We continued our long term trend by setting new talc sa les and m a rk et share r e c o r d s during 1964 in sp ite of in c r e a se d co m p eti tiv e a c tiv ity , S ie r r a 1964 s a le s w ere w ithin 2% of the le v e ls p r e d ic te d in January 1964. The m ajority of the r is e cam e again from sp ecialty products, e sp ecia lly M istron, and in creased European sa le s. Our m arketing effort was concentrated in these field s.
P a u l W. Wood Com pany s a le s ex ceed ed ex p ecta tio n s b ecau se of
addition of ceram ic and p la stic s departm ents during 1964. S ierra
T alc de M exico again earned an ex cellen t return on investm ent,
and construction of a new p ro cessin g plant was authorized. We
in c r e a s e d our p a r tic ip a tio n in S ie r r a -M e x ic o to 30%. F r e ig h t
p o sts w ere again reduced in 1964, a continuation of a long term
p ro g ra m , w hich h as re su lte d in annual savin gs of m ore than
$400, 000. S ales c o sts in creased during 1964 but the ratio of
se llin g expense to sa le s rose only sligh tly.
.
We are forecasting new record sa les again.for 1965. Sierra sa les sh o u ld r is e , ab ou t 9% end the ad d ition of A quafil sh ou ld add a n o th er 14%. We a n tic ip a te a b ig jum p of 30% in Wood C om pany s a le s . Com bined sa les are projected at nearly $9, 000, 000. Rubber, p la s tic s , pulp and p ap er, and ex p o rts w ill contribute m ost of the S ierra in crea se, and our m arketing efforts w ill be directed m ainly to the prom otion of sa le s to these in d u stries. The paint industry
is a sp ecial ch allen ge requiring im aginative and d eterm in ed ly applied tactics.
Pyropaque (calcined T exas talc) w ill be test m arketed in a ll of the
above industries.-
'
We sh all make a strong effo rt on A quafil diatom ite sa le s to a g r ic u l tural chem ical as w ell as paper and paint producers. F reigh t and w arehouse c o sts w ill be the object of much attention, both for the Wood Company and S ierra.
We shall carry out a num ber of m arketing personnel changes, field
and m an agerial, in S ierra and Wood Company. C hief of th ese is
the appointm ent of Paul Juley as S ierra S ales M anager and Ralph
L eF ev er as P r e sid en t ol the Wood Company.
.
We are projecting sa le s expense in crea ses for both S ierra and W ood C om pany, but cot-iri p er d o lla r s a le s and p er s a le s c a ll w ill decrease.
CAMC-Logiudice-001135
t a r L,f: o f o o n i f. x t s
2 P age No. .
Summary
Tabid ol' Ci Mil i-rii Index uj Cirii.ili-s and Table.-,
1 2- 3
4
1Qt. 4
5-22
A n a ly s i s ul` Marketi ng Et'iWt
5
Talc Background Marketing Polu ics New Product Stress Exports 1Qo4 R e s u11s
6 - 15 6
8- 9 9 10
11-15
CUiv
15
Cl'. eini l .11a
.
15
pi ll VV. Wood Campa nv Haclo round
' Sa les by P rim,. on;r. E.\j>.'!r s i o r. P r Cjj t .i nl Ret: !,i !nu C ' isi s
16 - 18' 16 17 18 18
-S1 ; i-j! T^Ji cir M'-s.i i, S A. .
` H.u kitne.iud . Fin rmiu;r J.ta ft a * e ' ! t 11 ! : ' ,/ : . 1 :r p r- e S i |!IJ P 1.it.1
18 - 19 18 19 .19
r ,
A* . I'M! ' f * * M 'i*krt!i'C ' ***
1i
19 20 21 - 2
CAMC-Logiudice-001136
T A H L F. O F C ONT F N T S
> Page No.
Summarv T.'ible ul Ci`lit i"r:i Index i.iv Cirn.ih-5 ar.d Tabl e
1 2 -3
4
lt.4
An. i l yai s ni Ma rket i nu ENfert
Talc
By cktit'iniud Marketing Policics
New Prodnet Stress E x p o rts I9o4 Rcsulls
G! ;i'.'
Ch fin i i .i 1
,
P m i vV, Wu<>(] CninpaiK' Kfj i k ; round S-.: 11- by P ri n.. un i Kxp.'irsior. Prcjn>M:n lied i.f! nu C'>i
SI t * TN-K de M"\.i \ S A.
' !J-n knn.'.ind .
Fin niuii; r
i.!.i rt -i >< ; i i, i;
:. r pp. . <---s
5-22
.5
6 - 15 6
8-9 9 10
Il -15
15
15
16 - 18 16 17 18 18
pi.n,i
18 - 19 18 19 19
1 1 - 22 19 20
21 - 22
CAMC-Logiudice-001137
4.
INDEX TO GRAPHS AND TA BLES
1964
.
. Page No.
Sierra Sales 1957 - 1964 j l
S ie r r a P ercen ta g e Share Talc and Soapstone S ales
1957- 1964
''
.5 6
C om parison Indices - Sierra S ales, Other Talc P roducers, and Total Industrial Production 1957 - 1964
7
Net P rofit Before Taxes
8
M istro n S a les to Europe
10'
% of S a les C alls by Industry
11
D o lla r S a le s of T alc by Industry - 1957, .1963, and 1964
14
W ood-Company Estim ated 1964 Sales by P rincipal '
17
O rder D epartm ent W orkload 1957 - 1964
20
M arketing C osts 1963 and 1964
' 21
A ppendix A - O bjectives, Wood Company
42
Appendix B - P rincipals, C eram ic Dept. Wood Company
43
Appendix C - P rin cipals, P la stic Dept. Wood Company
44
1965
M arketing Goals
23
I n c r e a s e in S a les by In d u stries
23
S a les by Month
24
S ie r r a - A verage C ost p er Call'
40.
Wood Company - A verage C ost per C all
40
A ppendix D - Talc S ales by A rea and Industry
45
Appendix E - S ales by P rin cip a ls, Wood Company
46
A ppendix F - Canadian T ech n ical S e r v ic e E ffo rt by Q uarters 47
A ppendix G - Additional E xp en ses
48
Appendix H - Selling E xpense, Sierra
49
A p p en d ix I - S ellin g and W arehousing and F r e ig h t E x p en ses,
Wood Company
50
/
CAMC-Logiudice-001138
5.
19 6 4
A t the beginning of 1964, we fo reca st our dollar sa le s would
reach about $4, 300, 000. A ctual sales w ill approxim ate
$4, 250, 000. This is an in crease of about $500, 000 , and
another record as regard s both sales and p r o fits. It is a
continuation of the long term trend begun in 1957 and which
.h a s a c c e le r a t e d s in c e the end of- I960:
SIERRA SALES
1.000g
1957 1958 1059 I960 1961 1962 1963 1964
year
(est.)
CAMC-Logiudice-001139
6.
T alc
.
A pproxim ately $4, 150, 000 of total sa le s w ere ta lc. We have again in creased our estim ated share of the U. S. produced talc m a r k e t.. We c a lc u la te our 1964 d o lla r sh a r e to be near 23% v e r s u s 21.6% in 1963, T his, too, fits our p r e v io u s pattern:
SIERRA PERCENTAGE SHARE TALC AND SOAPSTONE SALES
24
1957 1956 195 1% 0 1961 19e2 1963 1964
' year
(est.)
We s e c u r e d this in c re a s e d m a r k e t s h a r e despite sh a rp ly in c re a s e d c o r n p e tu iw nativity, Principal com petitive m o w s during 1964 we re:
1. G r e a t l y i i t rv.-isi : . r o e a n d q u a l i t y p r e s s u r e f o r p a i n t t a l c b u s i n e s s it: C;i 1i ''> i., by C h a r l e s P f i z e r a n d D e s e r t M irie rn is.
2 . T h e b e g i n n i n g ol p 1111l ion oi b e u c f i c iafecj c o s m e t i c t a l c tty E a s t e r n M a g n e . i i , ,1 t h e i r n e w V e r m o n t f a c i l i t y .
CAMC-Logiudice-001140
7.
3, The fir s t im p ortan t s a le s o[ "white" T ex a s ta lc to the sou th w estern and southern paint industry.
-t. The a c q u is itio n of C arbola C h em ica l by In te r n a tio n a l T a lc and the rea liza tio n by International of the im portance of technical sa les of specialty products.
5. Thu fir s t attack by a U. S. producer (Southern C alifornia M inerals) on our European m arket.
6. The m ajor in c r e a se in talc p r o c e ssin g ca p a city upon the
com pletion of Southern C alifornia M inerals' new m ill at
Dunn, C alifornia.
7. A cq u isitio n of W estern T alc by R. T. V anderbilu
.
N ev erth eless, as m entioned above, we have again m ore'than held our own as th is graph, com paring our grow th with the r e s t of the talc industry and total industrial production, clea rly show s.
COMPARISON INDICES SIERRA SALES, OTHER TALC PRODUCERS SALES
AND TOTAL INDUSTRIAL PRODUCTION (1 9 5 7 - 1 0 0 )
xxxxx.xx.xxx :----------------------------------
Value S ierra S ales of Talc Value Talc and Soapstone Sale's A ll Other P ro d u cers U. S. Industrial Production
CAMC-Logiudice-001141
8. We. a r e proud of th is reco rd b e c a u s e it d e m o n str a te s our a b ility to build sa le s in the face of in creasin g com petition in an industry which, a s id e fr o m our com pany, i s n ot grow ing e s p e c ia lly rapidly. A look at our profit h isto ry reveals that th ese in crea ses have not been bought at the exp en se of reduced profits:
NET PROFIT BEFORE TAXES 1, 000
Im p o rta n t to increasing both profits and sales is the recognition t h a t o u r b u s i n e s s , l i k e mo.-^t, i s d i v i d e d i n t o a n u m b e r of s u b b u sin e sse s. Broadly speaking, our su b -b u s in e s s e s can be grouped into two categories;
CAMC-Logiudice-001142
9.
The fir s t group c o n sists of those products and in d u stries which have reached relative m aturity. That is, those m arkets which are traditional talc con su m ers, and the traditional types of talc consum ed by them . They are ch a ra cterized by fie r c e com p etition , e s p e c ia lly p rice com p etition , w hich r e s u lts in low m argin s. They a lso tend to be lim ited geographically. Products sold in "mature" m arkets, are generally looked upon as com m odities by buyer and s e lle r a lik e. In crea sed sa le s in such m arkets u su ally com e at considerable cost, since p rice cuts or in creased co st through im proved quality or se r v ic e are n e c e ssa r y to gain a com petitive edge. Typical of this group of su b -b u sin esses are . the regu larly ground ta lcs sold to the w all tile , paint, and co sm etic in d u str ie s, as w ell as a ll Olanc.ha c la y p rod u cts.
We have chosen to em p h asize the second or growth group. T his c o n sists of new products, new ap p lication s for old products, and both new and old products in expanded geographic a r e a s. It is ch a ra cterized by unorganized or n o n -ex isten t d irect com p etition and consequent high g r o s s m a rg in s. O perating in th is m ilieu req u ires im agination, initiative, technical ability, and courage. S a les in c r e a se s norm ally com e at the expense of a rela tiv ely high in v estm en t of m arketing tim e and m oney and fa ilu res are n o t' infrequent.
A typical new product is u ltra-fin e an d /or chem ically treated, although conventionally p r o c e sse d m a teria ls may be prom oted for new u se s. The outstanding exam ple of a S ierra growth m arket is iM istron Vapor in pulp and paper and its su b seq u en t exp an sion to w orldwide distribution.
Our m arketing effo rt again em p h asized in 19h4 the rela tiv ely high p r ic e d , high m argin "M istron" line of u ltra-fin e ta lc s. These, are sold m ain ly in the pulp and paper, paint, rubber and p la stic s in d u str ie s and for export.
The M istr o n s a s a group accou n ted fo r a p p r o x im a le ly $2, H00, 000 , w hich is slig h tly m ore than n $450, 000 in c r e a s e u ver l ' 1b3, and tw o -th ird s of our total s a le s . M istron exp orts to W estern Europe again led the w ay,, being about S200, 000 higher than 19o3's record tc v e 1.
CAMC-Logiudice-001143
10.
T he fo llo w in g illu s t r a t e s the p r o g r e s s of ou'r M dstron s a le s to E urope, since they began in 1961:
. ; ' MISTRON SALES TO EUROPE
T h is degree of su c c e ss of our international effo rt and the m anner
in which it w as achieved w as recognized by the United States
governm ent. The P r e sid e n t's "E" for E xports w as p resen ted to
us on Septem ber 11, 1964. We are esp ecially proud of this award
which reads as follow s:
.'
"CITATION S ierra T alc and C hem ical Com pany, D iv isio n of Cyprus M ines C orporation, m iners and p r o c e sso r s of nanm etallic m in era ls, has substantially in crea sed the export of its products by en erg etica lly developing new foreign m arkets. Com bining carefu l study of potential con su m er dem and with perponal selectio n and training of distributor personnel, follow ed by vigorou s and im aginative m erch a n d isin g , the com pany has tripled the volum e of its exports since I960, su c c e ssfu lly penetrating m arkets in three of the w orld's m ajor talc-p rod u cin g cou n tries. The contribution of the Sierra Talc and C h em ical Com pany to our nation 's exp ort expansion
CAMC-Logiudice-001144
11.
program reflects credit upon the firm , its em ployees and the free en terp rise system ;
In the nam e and by the au th ority of the P r e s id e n t 19>4 , L u th er H. H o d g es, S e c r e ta r y of C o m m e r c e ."
S a les of two Montana origin M istron s, M onom ix and ZSC, fir st introduced late in 1963 to the paint in d u stry, show ed ex cellen t grow th in dom estic m arkets. D ollar sa le s in crea sed som e ' $50, 000 (1000%) over 1963. T hese are v e r y high m argin m a te r ia ls with ex cellen t potential for g rea ter volum e.
One very significant developm ent involved M istron F rost, which
is m ade from W arm Springs C alifornia raw m aterial. This was
its large scale use to im prove printing p rop erties of sp ecial
new sprint production in Finland. T hese in crea ses alm ost '
ex a ctly offset reduced consum ption by the North A m erican paper
in d u str y ,
'
.
M istron Vapor (Montana) sa le s to the rubber and p la stic s in d u stries continued a strong upward trend, jumping about $ 4 0 , 000 (23%) o v e r 1963 as th e f i r s t im p a c t of our e ffo r ts in ethylene propylene rubbers w as felt.
N orth A m erican s a le s of M istron Vapor to the pulp and paper in d u str y in c r e a s e d $120, 000 (ab ou t-11%), a s in c r e a s e s in, the P a c ific N orthw est and Chicago sa le s a r e a s m ore than offset E a stern Canadian lo s s e s .
A n a ly sis of our sa le s call reports show s the follow ing distribution of se llin g effort during 1964:
Industry
% of Sale s C alls
Pulp and Paper
Rubber
.
P a in t
'
C eram ic and Steatite
C osm etic and P h arm aceu tical
P lastic
M iscellaneous
26. 9 21. 2 29. 6
3. 7 3. 5 9. 0 6. 1
100..0
CAMC-Logiudice-001145
12.
T echnical literatu re published during 1964 was entirely directed to the M istron consum ing industries:
Report
T itle
.
T echnical R eport 56-T
W ater-B ased , High G loss and S em i- ' G loss E nam els: P igm entation With M istron M onomix (Paint)
T echnical Report 5 7 -T
M istron F rost Pigm entation of Starch Paper Coatings (Pulp and P aper)
Rubber Report #50
M istron Vapor R e-Inorcem ent of Enjay 3509 Ethylene P ropylene T erpolym er (Rubber)
S ales Service Manual 2-S.
S ierra T alcs for the Prote.ctiv Coatings Industry (Paint) .
T alcos Sierra En La Industria De Pinturas (Export Paint)
Sales Service Manual 3-S
S ierra M istron Vapor in Rubber Compounds (Rubber)
B a sed on the s u c c e s s fu l paint sem in a rs held during the la tter part of 1963, Sales S ervice Manual 2-S , ''Sierra T alcs For the P rotective C oatings Industry: and the Spanish version , "T alcos Sierra En La Industria De Pinturas" w ere w ritten and published. This manual w a s u sed in 1964 a s th e-form at fo r paint se m in a r s attended by c h e m ists from the m ost im portant paint com panies in the a r e a s of T oronto, Canada: Guadalajara and M exico C ity, M exico; St. L ouis, K ansas City, Tam pa, Houston, L ou isville, San F ran cisco, and B u ffa lo .
P a p e r s on " P itc h C ontrol w ith M istro n V ap or1-' w ere p r e se n te d at the Gulf C oast Section of -Technical A ssociation of the Pulp and P aper Industry and the Third International T echnical A sso cia tio n of the Pulp and P ap er Industry Pulp B leaching C onference in S eattle. The paper given at th fo r m e r m eetin g w as published in the N ovem ber 12, 1964, issu e of the Southern Pulp and P aper M anufacturer.
An a r tic le " C osm etic T alcs" was subm itted and-published in the O ctober 1904 issu e of the A m erican P erfum er and C o sm etics.
Inform ation regard in g use of our products published by other m anufacturers is alw ays ex cellen t advertising. During 1964
CAMC-Logiudice-001146
13.
co-m a n u fa ctu rers w rote about our products in th eir bu lletin s:
"M istron Vapor", Anchor C h em ical C o ., L td ., M anchester, E n glan d , A nchor B u lle tin '171 / R /6 4 (Rubber):
"Fabric F in ish es with Butyl E lastom eric Hydrocarbon V ehicles", Rubber R e sea rch E la sto m e r ic s, In c ., B u lletin D V -1-64 (Rubber);'
" P etro -T ex N on-B lack Butyl Rubber Sheeting", P etro -T ex C h em ical Co. , B ulletin No. B 1 0 -9 -6 4 (Rubber);
"N atsyn 2200 N on-B lack P igm entation Study", Goodyear C h em ical D iv isio n B ulletin NS 9 (Rubber);
"Im proved P h y sica l and E le c tr ic a l Strength of M ineral F illed C o v u lc a n iz a te s o f E P R and P o ly e th y le n e " , W. F . F is h e r , E njay L ab o ra to ries, Linden, N. J. (Rubber);
" P lio lite VTL in T raffic P aints", Goodyear C hem ical D ivision B u lletin P L S -2 4 (Paint);
"E valuation of High Hiding P igm en ts" , N ational Starch R esin D iv isio n , Raw M aterial Evaluation R eport No. 3 (Paint);
"No. 619 Study B ulletin about M istrons as F ille r s" , LaboTatoire D 'A n alyses & D 'E ssa is de la P ap eterie, G renoble, France (Paper);
"W ater R esistant, O il-B ased, Intum escing F ire-R etard ant C oatings. I. Developm ental Form ulations", Southern R egional R ese a r c h L ab oratory, U. S. D. A. , and U. S. A rm y E n gin eer R ese a r c h and Developm ent. L ab o ra to ries, Journal of the A m erican O il C h e m is ts ' S o c ie ty , V ol. 41 (P aint).
The m o s t im p o rta n t " first" for the' te c h n ic a l s e r v ic e d ep a rtm en t
w as the in itia tio n of the s a le s en g in e e r s' two w eek p r o je c ts in the
South P asadena laboratory. So far two sa le s en gin eers have been
. through the program , and all a sso cia ted with it are m ost e n th u sia stic
about its benefits.
.
Three, of our sa le s en g in eers com pleted in 1964 c o u r se s in rubber tech n o lo g y w hich should help th em in th e ir sa le s as w e ll as technical service efforts.
CAMC-Logiudice-001147
14.
The r e su lts of th ese efforts should be in c r e a se d s a le s , and this is indeed the case:
SIERRA SALES OF TALC BY INDUSTRY (000s om itted)
1957
1963
1964
Pulp and Paper
Rubber and P lastic
P a in t
Export
C eram ic and Steatite
C osm etic & Pharm aceutical
A gricu ltu ral Chem ical
M isc, and U nclassified
100 50
500 140 550 150 100 120
900 220 720 900 470 ' 180 100 140
1, 050 330 820
1, 130 S 510 , 210
30 ' 70
T o ta l
$1, 710
$ 3 ,6 3 0
$ 4 ,1 5 0
A lthough the. g rea t share of our attention is given to the M istrons, we did not n e g le c t our m ore conventional m a te r ia ls in 1964.
S teps tak en during 1964 to im prove or defend our p osition in the mature m arkets were:
1. . C o n tin u ation of heavy prom otion of T e x a s 'ta lc s to the d o m estic
and M exican ceram ic industry. The resu lt w as an in crease of
$ 3 0 , 000 (67%) o v e r -1963.
2. We in itia te d p r ic e in c r e a s e on F ib r e n e p a in t t a lc s of about 10% in May w ith no sign s of a lo s s in volu m e. The im pact w as approxim ately $10, 000 greater pre-tax p rofits.
3. E ffo rts to m ove G lacier (Montana w a ste) and Silverbow (1/2 W arm S p rin gs - 1 /2 Montana w aste) to a v a riety of end u se r s m et with c o n sid e r a b le su c c e ss, resu ltin g in in c r e a se d sa le s of about $ 2 5 , 000 (125%) of those r e la tiv e ly low c o s t m a te r ia ls .
In s u m m a r y , 1964 1;.U s a le s r e s u lts fu r th e r e x te n d e d our r e c e n t sh a rp u p w a rd tren d aw. total s a le s w ere w ith in 2% of the goal
CAMC-Logiudice-001148
15.
esta b lish ed in D ecem b er 1963. M ark etin g's-p rim ary ob jective o f raisin g profits by em phasizing high m argin sp ecialty products, was in s tr u m e n ta l in a c h ie v in g the goal.
A ll m arketing functions contributed to the im plem entation of this p olicy. Our d irect sa le s force em phasized the M istro n s in their p resen ta tio n s to cu sto m ers, and callin g p attern s w ere h eavily w eighted to the M istron consum ing in d u stries. T echnical serv ice p erson n el largely devoted their attention to the M istrons in the 1 preparation and d issem in a tio n of tech n ical inform ation.
Although all ta lcs are incidental b en eficia ries, traffic departm ent rate and packaging studies w ere generally designed prim arily to e a se and reduce the cost of new product transportation.
M arketing's foreign distributor technical a ssista n ce program stressed M istrons alm ost exclusively.
C la y
Our Olancha adsorbent clay volum e continued to drift downward. T his is only the la te st in a se r ie s of dreary y e a r s, which began in the late 1950's. S ales totaled $75,000 v s. $110,000 in 1963.
B luntly put, we are a high cost producer of a low priced com m odity
operating on a slen d er reso u r c e b ase in shrinking m ark ets. We
have th erefore been unable to'justify the cost of a large sca le
effort aim ed at in creasin g our share of the m arket. We expect to
im p rove sa le s and profit volum e during 1965 with m odest capital
and m arketing in vestm en t. T h ese plans a r e .d isc u sse d in the 1965
se c tio n .
-
C hem icals '
B oston ch em ical s a le s , con sistin g m ainly of a lk a lie s produced by
International M ineral and C h em icals, reached $22, 000 v s. .
$20, 000 in 1963, T his is str ic tly an a ccom m od ation to supplier
and buyer. Our .Boston sa le s engineer is under str ic t instructions
to m ake an a b so lu tely m inim um expenditure of tim e in this field .
T h e r e fo r e c h e m ic a l s a le s c o sts eq u alled l e s s than 1% of c h e m ic a l
sa le s in 1964.
,
CAMC-Logiudice-001149
1
16.
P au l W. W ood Company
M arketing p ro v id es general guidance and staff a ssista n c e to '
the P au l W. Wood C om pany, a w h o lly owned su b sid ia r y a cq u ir e d
in N ovem ber 1963.
..
The Wood C o. h as engaged in the w h o lesa lin g of in d u strial raw-
m aterials and ch em icals since 1930. Its m ain outlets are
C alifornia and A rizona paint, p la stics, and cera m ics producers.
It has acted a s S ierra 's talc distributor to th C alifornia paint
industry for m any y ea rs. Sales o ffices are located in Los A n geles
and San F r a n c isc o , and w arehouse stocks in L os A n geles, San
F ran cisco,, and A lam eda.
.
We view ed the a cq u isition of the Wood Co. as an opportunity to enter a poten tially profitable field while extending our control of s a le s of our p ro d u cts. Since we bought only, ce r ta in of the a s s e t s , p rofit reco rd s of the com pany are not availab le. H ow ever, it is evident that, w hile it w as once highly profitable, it was losin g m oney when we took over.
Our purchase con sisted of sound in ven tories and receivab les at c o s t or face valu e plu s goodw ill at $1. 00 . A group of top flig h t ex clu siv e rep resen ta tio n s com p rised the goodw ill. A s acquired, the b u sin ess w as essen tia lly oriented toward the paint industry, a highly sp ecia lized selling situation.
Our in itial a n a ly sis of sa les potential of this group of representations
proved rem arkably accurate for 1964:
'
CAMC-Logiudice-001150
17
Product
Producer
_______ ________________ ___________
P re-A cquisition Estim ate
(Aug. 1963) _________________
S a le s (approx. )1964 (annual rate b asis
11 m on th s)
A lum inum . A lum ipum Corporation. Pigm ents of A m erica
$ 7 0 0 ,0 0 0
$ 6 7 5 ,0 0 0
A sbestos
Canadian Johns-M anville
335, 000
340, 000
T a lc
S ierra Talc
350,000-400, 000
400,000
Hydrocarbon N eville C hem ical R esins
2 9 0 ,0 0 0
3 5 0 ,0 0 0
R esin
Trojan Powder
Interm ediates
325, 000
325,000
M ica
E nglish M ica Co.
8 0 ,0 0 0
85, 000
SBR Latex G eneral Tire & Rubber
2 0 0 ,0 0 0
100,000
P o ly v in y l A cetate
E .I . du P on t de N e m o u r s
165,000
4 5 ,0 0 0
Solvents
T idew ater Oil
2 0 ,0 0 0
5, 000
O ils & R esin s C argill Inc.
S ilic o n e R esins
General E lectric
30,000 160,000
275,000 a.
$ 2 ,6 0 0 ,0 0 0
^ R ep resen tation lo st prior to acq u isition
i-I-'The p r o je c tio n w a s a c tu a lly $2, 630, 0 0 0 -$ 2 , 7 0 0 , 000
The sharp in c r e a se in C a rg ill s a le s r e su lts fro m a d isp rop ortion ate am ount of sellin g tim e and prom otional effort devoted to th is r e la t iv e ly new a cco u n t. The re d u c tio n in the du P o n t a c c o u n t s te m s fr o m an u n w illin g n e ss on the p a r t o f the p r in c ip a l -to c o m p e te in a fu riou s p rice b attle. T here is no in d ication of change in this situation. G eneral Tire business is suffering from a rapid shift from rubber latex to p la stic la tic e s in em ulsion p ain ts. A ll other projections w ere verv much on target.
CAMC-Logiudice-001151
18.
T he "Wood C o. en jo y s a dom inant p o sitio n in its m ain p a in t lin e s , c o n tr o llin g at le a s t 50% of the p r e s e n t m a rk et in its " bread and butter" alum inum , a sb esto s and ta lc ite m s. Only abrupt m arket sh ifts or new product introductions could rad ically alter the sa le s p ictu re for the p resen t paint lin e.
We have therefore established profitable expansion of product lin e s and m arkets served a s the prim ary Wood Co. goal. Although o b jectiv es and goals w ere only form alized late in N ovem ber (see A ppendix A), the im pact of th is philosophy w as apparent throughout 1964-,
1. In January 1964 we secu red the representation for sp ecialty ch em icals produced by Sinclair P etroch em icals. This is a developm ent account w hose contribution m ust still be d e scrib ed in the future te n se .
Z. In June w e added a c e r a m ic d ep a rtm en t w hich h a s co n trib u ted
greatly to both our sa le s and p rofits. Six m onths' sa le s w ill
ap p roxim ate.$350, 000 w ith a g ro ss profit of about $50, 000.
A lis t of accounts rep resen ted by this departm ent appears in
Appendix B.
fc* 3. In O ctober we en tered the rein fo rced p la stic s field , a genuine
growth area, with a full line of m ateria ls (See A ppendix C). T his departm ent's sa le s are s till in infancy but should have a
con sid erab le im pact in 1965.
The y e a r 1964 w as a learn in g y e a r for both S ierra and Wood m arketing people, and m any c o sts of doing b u sin ess w ere higher than-they should have been. C onsequently, our cred it and traffic p erso n n el initiated a s e r ie s of step s designed to reduce c o sts by m eans of stronger credit checks and controls, and reduced w are h ou sin g and freigh t c o sts.
S ie r r a T alc de M exico, S. A .
The d ivision m arketing Vice P resid en t serv es as chairm an and a d ir e c to r of our M exican a ffilia te , S ierra Talc de M exico, S .A . of M exico City.
T h is com pany w as e sta b lish e d in a sso c ia tio n w ith M exican ca p ita l in 1961 for the purpose of p r o c e ssin g and sellin g S ierra ta lc s in M exico.
JO* CAMC-Logiudice-001152
19.
Our i n t e r e s t of 10% r e p r e s mted only an in v e s tm e n t of tr a d e m a r k s and tech n ical a ssista n ce.
The growth of the company has been very rapid, and retained earnings m ore than tripled the original cap ital base of US$16, 000 in three y e a r s. We should also m ention that S ierra -U . S. A. a lso h a s ea rn ed e x c e lle n t p rofits on crude ta lc sh ip m en ts made to Sierra-M exico.
D uring 1964, S ierra-M exico authorized an in c r e a se in cap itali zation to US$160, 000 for the purpose of con stru ctin g a m odern m in e r a ls p r o c e ssin g plant. Land has b een pu rch ased and equip- . m ent and building contracted for. We have in c r e a se d our stock p a r tic ip a tio n to a to ta l of 30%, of w h ich a b o u t $ 3 5 , 000 w ill be c a s h and $13, 000 is represented by intangibles. W e are also extending $8, 000 in long term credits at in terest.
S ierra-M exico also represents Sierra-U . S. A. for sales of crude T exas cera m ic talc in M exico. M exico accou n ts for about 2 /3 of the tonnage shipped from our Texas p ro p erties.
T ra ffic
'
B etw een 1955 and 1962, rates, adjustm ents, routing, etc. w ere handled by H. T. M ulryan. The order departm ent w as d irectly under h is su p ervision from 1957 through 1962.
A s a co n seq u en ce, tra ffic and ord er fu n ction s continue a m ark etin g r esp o n sib ility under the direction of the a s s 't. traffic m anager.
We have been exceptionally sensitive to freig h t co sts, since they re p r e se n t such a large portion of the c o st of placing our m aterials in c u sto m e r s' hands. Although only a sm a ll portion appears in our sa le s to ta ls, w e disbursed m ore than $750, 000 in-cash freight c h a r g e s during 1964. Our c u sto m e r s paid a b ou t tw ic e that fig u re on "collect" shipm ents for a total of m ore than $2, 000, 000.
Since 1957, we have succeeded in driving down the average le v e l of r a il f r e ig h t on our p rod u cts 10%, w h ile th e le v e l fo r a ll p ro d u cts h a s in c r e a s e d 14%. We and our c u s to m e r s b e n e fit e v e r y y e a r by m ore than $400, 000 cold cash savin gs.
CAMC-Logiudice-001153
20.
O rder departm ent workloa ! has in creased en orm ou sly in the sam e period. The num ber of carload orders has m ore than doubled in seven y ea rs:
1957 1958 1959 I9 6 0 1961 1962 1963 1964(est.)
1242 1384 1603 1582 1660 2052 2257 2775
F ollow in g are the a ccom p lish m en ts of the traffic d epartm ent during
1964:
..
.
1. In cooperation with our o v e r se a s d istrib u to rs, w e w ere
s u c c e s s fu l in holding an in c r e a s e in ocean fr e ig h t fr o m
M ilwaukee to Europe down to $ 1 .8 0 per ton, in stead of the
$8.00 increase originally demanded by th e'ca rriers.
2. Sought and esta b lish ed a reduced freight rate fro m T hree F o rk s, Montana to T oledo, O regon to aid in m arketing
M istron Vapor to G eorgia P a cific Corp. there. 4:
3. Sought and estab lish ed routes from W est T exas to e a st of the M issou ri R iver via Grand Island, N ebraska in an ticip a tion of Pyropaque operation.
4. F orced reduction of rail rates from-Montana to P acific N orthw est by introduction of truck com petition. Savings to our cu sto m ers am ount to $1, 90 per ton,
5. S u ccessfu lly defeated an attem pt by eastern p rod u cers and ra ilro a d s to require the ta lc in tailings not ex ceed a certa in chem ical form ula. A pproval of above would have r e str ic te d m arketing of G lacier 325 by r a isin g ra il ra tes 20%.
6. We succeeded in reducing ocean rates from H ouston to Europe $ 1 .8 0 per ton by d iv ertin g m o s t tonnage to B a ltim o r e , w hich for a tim e enjoyed a large ocean rate advantage. Our c&f p r ic e s in 1964-65 w in ter sea so n are $ 1 .0 0 per sh o r t ton low er than 1963-64 p r ic e s, due to this reduction.
7. We supported a p rop osal w hich reduced our rate on cru d es fro m Dunn to Los A n geles by $. 20 per ton.
8. Publication of a "reduced" rate .from Three F ork s to Houston
^ :S----V. j
CAMC-Logiudice-001154
21.
in th e e x p o r t se c tio n 01 r a il ta r iff, r e s u ltin g in a $1 . 60 per' ton in c r e a s e . We w ere su c c e s s fu l in having th is c o r r e cte d .
T otal sa v in g s to our cu sto m ers and o u r se lv e s due to reductions s e c u r e d in 1964 w ill be $ l6 , 000 annually, b ased on 1964 tonnage. In addition to this figure the traffic departm ent filed c la im s with c a r r ie r s , with reim bursem ents of nearly $8, 000.
M arketing C osts
S ie r r a T alc did not operate on a form al budget prior to our a cq u isi tion by Cyprus M ines. Therefore no official m arketing cost projections w ere made for 1964.
At the beginning of 1963, we separated'hom e office m arketing co sts
fro m gen erd l and adm inistrative ex p en ses, and com bined them
w ith fie ld sellin g expenses to report " sellin g expense". "Selling
expense" is the total co st of m aintaining and expanding our
cu sto m er relation sh ip s. As such, it in cludes not only sa le s and
sa le s support sa la r ie s and exp en ses but a lso such d iv erse item s
as branch w arehousing, publication of tech n ical m anuals, and
exp ort forw arding and docum entation fe e s . This category does not
include any sign ifican t freight charges even though the traffic
departm ent is a m arketing resp on sib ility. We consider freight
c o s ts as a product co st. N either does it include sa le s discounts to
U. S. d istrib u tors, since these are taken in the form of reduced
invoice value.
.
The follow ing com pars 1963 with anticipated 1964 totals:
1963
1964 (est. )
(000s om itted)
Selling Expense
308 367
Net Sales
3759
4250
Sale s/E x p en se
. 8.2%
8. 6%
S in ce the P aul W. Wood' Com pany is e s s e n tia lly a s a le s organization,
a v ery large part of its operating exp en ses are considered as m ar
k e tin g c o s t s . T h ese to ta led $192, 000 in 1 9 6 4 , about 6. 6% of
Wood Co. sa le s.
'.
. , -r
11 L.7_'i~~rf."-,-.
1 w.1.
t--j t./j. il CAMC-Logiudice-001155
22.
We b eliev e that any d isp a ssio n a te o b serv er w ill a g r e e with us that m arketing fu lfilled its function of building profitable custom er relation sh ip s during 1964.
Quantitative resu lts v ersu s fo reca sts clea rly dem onstrate this point. t
A ll m arketing a ctiv ities, contributed to reaching th ese goals by operating within a philosophy which stressed p rofits from growth and change. This attitude has been operative in th is company for a number of y ea rs but w as fir st form alized by th is departm ent as an objective in D ecem ber 1963.
T h erefore, although we regard 1964 as a s u c c e s s , we face even greater ch a llen ges and opportunities in 1965. The next sectio n pinpoints th ese.
. -S. xi.y'X
s..--.I- v --.Jj - iIl CAMC-Logiudice-001156
23.
19 6 5
Our goal for 1965 is a new sa les record for Sierra products and the Paul W. Wood Com pany, plus at le a s t m eeting CMC expectations regarding our Aquafil acquisition,
S p ecifically, we estim ate our 1965 sa les as follow s:
S ierra talc Other S ierra products
$ 4 ,5 0 0 ,0 0 0 120, 000
Sub Total
4, 620, 000
Paul Wood Company A q u afil
3, 760, 000 (includes talc sa le s)
6 0 0 ,0 0 0
.
Grand Total
$ 8 ,9 8 0 ,0 0 0
This table show s from what industries we expect our additional
talc volum e to develop:
. D ollar Sales
Industry
1964
1965
.
' ` (000s om itted)
E x p o rts Pulp and Paper Paint C eram ic Rubber C osm etic P lastic A gricultural C hem icals M ise, and u n cla ssified
1, 130 1, 050
820* 510 330* 210 *
30 70
1, 210 1, 150
850 460 290 190 180
50 120
Total talc sales
4 ,1 5 0
4, 500
lancha Clay C hem icals
75 100 25 20
T o ta l
4 ,2 5 0
4 ,6 2 0
* P la stic s included in rubber and paint through 1964
- Ai'C-iTJ
,-
*V.V%, - , i.--i4 a7 ' -I
CAMC-Logiudice-001157
24.
D etail of the 1965 ta lc sa lt s fo reca st by area and industry appears in Appendix D.
P a u l W, Wood C om pany s a le s d e ta il by m a jo r p r in c ip a l ap p ea rs in Appendix E.
The follow ing ou tlin es our fo reca st of total sa le s by month:
Month January
.February
M arch 1st Quarter
D ollar Sales (000s om itted)
S ie r r a
A q u afil*
Wood*5* T otal
380 . 45
255 680
330 44 205 579
404 1114
55 315 774 144 . 775 2033
Apr il
May
June 2nd Q uarter
416
385
398 1199
54
45
31 130
350
355
335 1040
820
785
764 2369
July
August
Septem ber 3rd Q uarter
373
407
363 , 1143
37
44
55 136
365
375
355 1095
775
826
773 2374
O ctober
N ovem ber
Decem ber 4th Q uarter
413
380 371 '
1164 4, 620
60 64
66 190
600
320 793
295 . 739
235 672 . 850 2204
3, 760
8, 980
Seasonal adjustm ents m ade on lim ited data. T herefore quarter is lea st significant period.
Includes billings by prin cip als. Seasonal variation s estim a tes only. No p rior data to form b a sis. Sem ester is probable least significant period.
t . . i 'Xi'-'i 'r.t i l l s
.'-. .'V i-
SL'BtL .-.-.h iSeH
CAMC-Logiudice-001158
2 5.
T hese estim a tes assum e during 1965:
1. N o m a jo r change, in the F e d e r a l R e s e r v e B o a r d 's in d ex of in d u strial production; ,
2. No lengthy nationwide transportation strike;
3. No m ajor acq u isition s other than A quafil are m erged into Sierra;
4. No im portant product lin e s are lo st or gained by Paul W.
Wood Company;
5. No European, producer en ters the M istron Vapor m arket;
6. The p resen t relation sh ip of p r o c e s s in g capacity to dem and is not significantly changed;
7. That a proposed price in c r e a se on c e r a m ic 'sa le s holds.
R u b b er and P la s t ic s *123
Com bining these figures shows that we expect 1965 sa le s to these re la te d in d u str ie s to a c c e le r a te d r a m a tic a lly . We have put an enorm ous sa le s and technical effort'in to th ese growth fie ld s in the p a st few y e a r s, and the rew ards are now growing in resp o n se.
P la stic s inform ation now ju stifies separate c la ssifica tio n as our efforts are m ore strongly d irected to this fa st growing industry.
The follow ing actions w ill help us to in c r e a se the upward trend
even m ore rapidly:
.
1. The new sa le s tra in ees (See O rganization) in C levelan d and L os A n g eles w ill devote a la r g e sh a r e , probably 50%, of callin g tim e to these in d u stries.
2. S a les Service Manual 3-S, w hich su m m arizes all of S ierra's and other raw m aterials suppliers-1 inform ation on M istron Vapor as a rubber rein forcin g agent, w ill be p la ced .in the hands of som e 3, 000 rubber com pounders during 1965.
3. The follow ing new technical rep orts for the p la stic s industry w ill be published and distributed during 1965:
Subject
P ublication A nticipated
S ierra T a lcs E ffects in P olyvinyl C hloride
January
S ierra T a lcs in P olyvinyl Chloride F loorin g
M arch
Fyropaque Pigm ent in T herm oplastics
4th Q uarter
_jL*A-Li_r ' ji'i.jO B iJii
.-.,1
CAMC-Logiudice-001159
26.
4. T est m arketing oi Pyropaque pigm ent w ill include thorough coverage oi both in d u stries beginning second quarter.
5. A'new regular grind oi S ilv er Lake ta lc , " Silverfil" , w ill be prom oted in the W estern vinyl flooring industry beginning first quarter.
6. Wood C om pany's new. rein fo rced p la stic s departm ent w ill in crea se number of sa les c a lls to 1500-1600 in C alifornia . during 1965.
Our people w ill attend the follow in g-tech n ical and in d u strial mee'tings
in th ese field s:
Conference of Society of P la stics E ngineers B oston - February - M. F . W arner and C. E . Sprague
A m erican C hem ical Society D ivision of Rubber C hem istry M iam i - May - M. F . W arner and M.,D. Held
M istron m arketing problem s in these industries m ainly involve handling and m ixing d ifficu lties due to the M istro n 's b u lk in ess and d u stin e ss. A p elle tiz e d product w ould greatly a s s is t in allev ia tin g th is situation if one can be econ om ically produced.
Both M istron and regular grind ta lc s encounter p rice resista n ce based on ad verse com parison w ith clays and calciu m 'carb on ates. Our program of proving and sellin g tech n ical advantages over these com petitive m aterials is designed to overcom e these objections.
E x p o rts
The second la r g e st area of in crea se is ex p orts. We are estim atinga continuing rapid r ise in European sa le s, w hich should in crea se s o m e $ 1 2 5 , 000 to co n stitu te ab ou t 58% of the p r o je c te d 1965 ex p o rt s a le s . Canadian s a le s w ill apparently drop about $ 5 0 ,0 0 0 . In both in sta n c e s the changes are p rim a rily due to gains or lo s s e s of pulp and p ap er c u s to m e r s . We p ro p o se the fo llo w in g c o n c r e te s te p s to im prove international sa le s during 1965,
r1
1. We r e g a r d s p e c ia lty and lig h tw e ig h t n e w sp r in t fillin g a s an area of sin gu lar opportunity fo r us during 1965 and beyond. We
th erefore a re cooperating with' r e s e a r c h in arranging a fu ll sca le evaluation of a num ber of our M istrons, Aquafil, ultra-fine
CAMC-Logiudice-001160
27.
A quafil, and Pyropaque as new sprint fille r s , This work w ill be ca rried out by the Central L ab oratories of the S w ed ish pulp, and paper industry beginning upon a p p roval .of the r esea rch budget. M arketing exp ects to publish and circu late the r e su lts of this work internationally in the third quarter.
2. In crea sed s a le s to Japan during 1964 w ere m o st encouraging and further tech n ical serv ice efforts in that area w ill.b e m ade during, the second quarter.
3. The high lev el of technical sales com petence now reached by our European distributor people w ill r e su lt in a lessen in g of su ch c a lls by U. S. A., p erson n el. We cannot afford to n eg lect this m arket, how ever, and we expect to provide tech n ica l sa le s a s s is ta n c e during the second quarter and the third quarter. T h ese efforts are planned to s tr e s s A quafil en try into th is m arket.
4. A ll foreign d istrib u tors w ill be provided with c o st and freight p r ic e s and product data sheets for Aquafil during January.
5. We sh a ll in ten sify our program of help for our Canadian d istrib u tors by scheduling a total of 84 w orking days in Canada from B oston, N ew ark, Cleveland, C hicago, and South P a sa - . dena as opposed to 58 during 1964. We thereby hope to m ore than o v erco m e r e c e n t r e v e r s e s in E a ste r n C anada. (See Appendix F for schedule).
6. The'new p ro cessin g plant of Sierra T alc de M exico should
co m e on s tr e a m during 1965. We do not e x p e c t its im p a ct
w ill be fe lt during the year on S ierra-U . S. A. talc sa le s.
S ie r r a - M e x ic o n e t p r o fits in 1965 should be about 15% ah ead of
1964 or about U S$12, 000 on sa le s of c lo s e to U S$175, 000. No
ca sh w ill'b e availab le from this source during th y e a r , since
a ll profits are being retained for expansion.
,
M arketing w ill continue the highly su c c e ssfu l te c h n ic a l se r v ic e a ssista n c e to S ierra -M ex ico 's M onterrey office from Houston. C eram ic tile producers in M onterrey are exp ected to in crease th e ir u se of T e x a s ta lc by 15% in 1965,
R esea rch , production, and m arketing are coop eratin g on a
.
p ilo t t e s t a t our L o s A n g e le s m ill d e sig n e d ta d e v e lo p a h igh quality
CAMC-Logiudice-001161
28.
rubber compounding clay from M exican raw m aterial. T r ia ls should be com pleted during the fir s t quarter.
'
7, The C aribbean area assu m es in crea sed .im portance with the acq u isition of Aquafil, since im portant tonnages move to A ruba and Costa R ica. We have th erefore scheduled a te c h n ic a l saLes trip during M arch, w hich w ill com bine v is its w ith our p resen t Colom bian and V enezuelan cu stom ers w ith Aquafil prom otion. The Houston m anager w ill accom pany the m arketing vice president in order to broaden Mr. Ju ley's exp erien ce in Latin A m erican m arketing problem s.
Our International m arketing problem s fa ll into two categ o ries:
T hose a sso cia ted with Latin Am erica, revolve around econom ic
nationalism and foreign exchange problem s. We have reached a
solution in M exico, but Colom bia is in serio u s foreign exchange
d ifficu lties, w hich have held down our sa le s and about which we can
do little. S ierra-M exico does use its Latin A m erican Free Trade
A sso c ia tio n location to supply part of C olom bia's co sm etic talc
needs.
.
M uch m ore im portant are our E uropean problem s which are cen tered
on d eliv ered p rices which are influenced h eavily by freight c o sts.
Inland and ocean freigh ts, port ch a rg es, etc. norm ally constitute
35% to 40% of the c o s t and fr e ig h t E u ro p e p o r t fig u r e fo r M istro n
V apor. Our traffic departm ent is constantly involved in n egotiations
d esign ed to reduce or hold down th ese c o sts. This endeavor a ssu m es
even grea ter im portance during 1965, sin ce we m ust find m eans of
recoverin g a ll or a portion of discounts being granted our Sw edish
d istrib u tors to com bat Southern C alifornia M inerals' price
com petition.
.
.
The Lake Superior port of Duluth should be our lo w est co st ex it for E urope during the ice free season . S erv ice, how ever, has been very sp orad ic. Traffic has se t as a goal for com pletion during the f ir s t quarter the negotiation of ra tes and se r v ic e from Duluth to Sw eden, w hich w ill resu lt in reco v ery of a ll of the discount.
T his solu tion only applies to half of the y ea r, since we m ust use other p o rts during the cold season . In any event, it cannot be . regarded as perm anent, since Great L akes' rates are re-negotiated every year.
CAMC-Logiudice-001162
29.
The bulky nature of our Mis'trons m akes them r ela tiv ely u n desirable
cargo for ocean c a r r ie r s at what we consider to be reasonable
` rates per unit of w eight. A s a consequence, we are constantly
faced w ith the p o ssib ility of ocean freight in crea ses upsetting our
European price structure.
In lin e with o u r'stra teg y of turning ad versity into opportunity, m arketing m anagem ent is cooperating with CMC staff p erson n el in an investigation of estab lish m en t of European production fa c ilitie s. T hese program s cover both acqusition and construction p o s s i b ilitie s . A European plant, based on U. S. crude talc would sim ultaneously provide increased sa le s opportunities and unit p rofits by taking advantage of greatly reduced freigh t c o sts. A plant con stru ction proposal w ill be ready for p resen tation by M arch 31, 1965.
Pulp and Paper
We b e lie v e that w e a r e beginning to leave the sharp growth phase that has ch a ra c te r ize d our U. S. pulp and paper pitch con trol s a le s . T his does not m ean that we exp ect growth to c e a se , only that its rate of grow th w ill be slo w er. Long term changes in industry p r a c tic e s, such a s the tendency to pulp m ore fr e sh w ood and to red u ce str e a m p ollu tion indicate an in crea sin g need for pitch con trol agents. We have the b est there is .
We are now planning to begin a new growth cycle in this industry w ith new products w hich m eet the current demand for better printing and m ore opaque, y e t ligh ter weight, paper. The new sprint filling evaluation m entioned under "Export" w ill, of co u rse, a lso be circu la ted in the U. S. A.
In addition, our la b oratory has scheduled the follow ing tech n ical reports during the year:
Subject
Publication A nticipated
M istron Superfrost in Paper Coatings
February
Pyropaque in P aper C oatings
May
CAMC-Logiudice-001163
30.
A syn th esis of these papers w ill be given before the Paper C oatings C onferences of the T echnical A ssociation of the Pulp & P a p er Industry in May by R. S. L am ar or M. F . W arner.
The acq u isition of Aquafil d iatom ite places an added burden on our m arketing staff, as our list of prim e paper industry p ro sp ects is lengthened to include paper board producers. Each of our sa le s engineer's h as a lrea d y su rv ey ed actu al and p oten tial u s e r s in h is a rea and ha9 pinpointed opportunities for A quafil paper in d u stry s a le s in c r e a se s. Sales callin g patterns w ill be designed to cover sy ste m a tic a lly a ll of th ese p r o sp e c ts Again, the proposed Los A ngeles sa le s trainee is im portant to proper coverage.
B esid es the coatings conference, m arketing personnel w ill attend the follow ing conventions and tech n ical m eetings:
C anadian P u lp it P a p e r A s s o c ia tio n , M o n trea l, Canada January - M. F . W arner and L. D. M urino
N ational M eeting T echnical A ssociation for Pulp & P aper Industry N ew Y ork City - F ebruary - M. F . W arner and L. D. M urino
A s with exp orts, M istron m arketing problem s in the pulp and paper industry center on transportation and handling c h a r a c te r istics, as w ell as the d e liv e r e d p rice relation sh ip to pulp p r ic e s.
Traffic has scheduled freight rate reduction applications from M ontana to ea stern points. W isconsin paper m ills would be the c h ie f b e n e f ic ia r ie s . We h ope fo r a fa v o r a b le c o n c lu sio n .by th e end of the first quarter. If granted, .this reduction w ill save our cu stom ers over $25, 00d annually.
We also sh a ll request a ra il rate reduction during January 1965 fro m M ontana to the pulp and paper m ill site s near A berdeen, W ashington. The ju stification w ill be an equalization with S eattle and Portland rates. .
We sh all attem pt to esta b lish before the end of 1965, through, ra il freigh t r a tes from Montana to E astern Canada pulp and paper m ills . Com bined U. S, and Canadian freight rates a c r o ss border points now provide the low est through co st. Com binations are u su ally m ore exp en sive than sin gle through rates from origin to d estination b e ca u se one of the b asic p rin cip les of rate m aking is that ra tes per
..."-AL'Sli-i/W
CAMC-Logiudice-001164
31.
m ile lor long d istan ces are low er than for sh o rt d istan ces. .T h ere
fore a com bination of two m ileage rates does not take advantage
of the total d ista n ce. We plan to use th is p rin cip le as the chief
justification for our request.
,
A s in the rubber and p la stics in d u stries, M istron Vapor p resen ts the consum er with handling problem s. P roduction has done an e x c e lle n t job in reducing the b u lk in ess of this m a te r ia l, but it is s till very fluffy and tends to "fly" when bags a re opened. C u sto m ers go to con sid erab le expense and e ffo r t to avoid this n u isa n c e by b uying our w hite rep u lp ab le bag o r se ttin g up e la b o r a te slu rry in g s y s te m s . Some go to the e x trem e of not buying M istron at a ll, and an e a sy handling com pacted or p elletized M istron would undoubtedly help our m arketing effort.
C eram ics
We are projecting a sligh t d ecrease in Sierra cera m ic sa le s during 1965, m ainly as a resu lt of the anticipated lo s s of Interpace w all tile b u sin ess. T his occurs because our Los A n geles plant is p h y sic a lly u nsuited to the in stallation of bulk loading fa c ilitie s needed to m eet In terp ace's req u irem en ts.
S a le s of T exas ta lc s to U. S. and M exican w a ll tile plants should show a m odest in crease.
We a r e -c o u n tin g on a p r ic e in c r e a s e of about 10% to retu rn the C a lifo r n ia w a ll t ile t a lc s to a p ro fita b le b a s is . We sh a ll announce an in crea se during June or July.
Paul Wood C om pany's ceram ic departm ent w ill contribute a large share of that su b sid iary's projected in crea se. The year 1965 w ill be the fir s t fu ll year of operation for this departm ent.
M arketing w ill publish a S ales Service Manual for the C eram ics industry during A p ril,- This broad study of the u se s of our talcs in a wide variety of ceram ic u ses w ill p resen t this traditional talc u sin g group w ith a fresh p ersp ective of our com pany and its products.
M arketing p erson n el w ill attend one m ajor industry m eeting during
the year:
.
A m erican C eram ic Society - Philadelphia - May - Paul J u le y
CAMC-Logiudice-001165
32.
The m arketing problem s a sso cia ted with this industry relate to the fact that this is one of our m ature m ark ets. E xcept for electrica l ceram ics steatite talcs a ll of our ceram ic products are of the low m argin, com m odity, type. F urth erm ore, the cera m ic w all tile and p ottery industry its e lf is suffering h ea v ily from im port com petition and antiquated production fa c ilitie s . For these reason s, we offer our m odest 1965 objective of holding our dollar sa le s reduction to a m inim um w hile raisin g unit p r o fita b ility .
Paint
We expect continued risin g sa le s of our highest (M istrons M onomix and ZSC) and lo w est (G lacier and Silverbow) priced ta lcs during 1965. T hese w ill provide a net in crease despite even h eavier com petitive p r e ssu r e during the year. The F ib ren e price in crease w ill be effectiv e throughout 1965, and this alone w ill contribute an additional $ 1 0,000 to our m argin.
The paint industry is an interesting- study in contrasting talc m arketing problem s. F or talc, it is at once a m ature m arket consum ing com m od ities, and a growth m arket buying sp e c ia ltie s. F urtherm ore, it is a tran sition al m arket in which item s w hich w ere recently sp ecia lties are com ing to be regarded as com m od ities,
We m u st th e r e fo r e em p lo y ta c tic s w hich take th ese d iffe r e n t situations into account.
The principal problem w hich we m ust solve in 1965 is the plain fact that we have lo s t our q u ality le a d e r sh ip in the- conventional and n ear-conventional grinds of talc. C om petitors, both e a st and w est, have upgraded their 325 m esh products by im proving fin en ess. Owing to sh o rt p rofit m a rg in s, w e have been relu ctan t to do th is. M ore om inous, is the grow ing tendency by our co m p etito rs to upgrade into the su b sieve s iz e ran ges at r ela tiv ely low p r ic e s . We r e fe r sp e c ific a lly to such products as Hi Fine 80 from C aliforn ia and Nytal 300 from New Y ork, w hich d isp erse without m illing to Hegm an fin en esses of 4 to 5 at FO B p rices of $38. 00 to $41. 00 p er ton. Our com p arab le product, M istron 139, s e lls for $47. 00 per ton.
P rice com petition is sev er even on the ultra-fine m a teria ls, som e: thing that'w ould have b een unthinkable only two ox three y e a r s ago.
_U.I s\ m m:
T ',,LCbAus _/ S i
CAMC-Logiudice-001166
33.
We p r o p o se th at th e s e p r e s s u r e s can b e s t be m et by:
1. An upgrading of F ib ren e C -400 to a H egm an F in e n e ss 3 -1 /2 to 4 at all m ills where it is produced.
2. The in stallation of equipm ent at Grand Island and Los A n g e le s, w h ich would enable us to m ak e H egm an 4 to 5. products to se ll for about $40 to $42 p er ton at a profit.
3. We sh a ll v ig o r o u sly pursue our s u c c e s s fu l fighting fir e w ith . fire by em phasizing low priced-(but good m argin) G laciers and Silverbow .
Of c o u r s e , w e h ave no in ten tion of abandoning our s u c c e s s form ula of em p h asis of the high p riced sp e c ia ltie s.
We b elieve Pyropaque w ill be an outstanding paint pigm ent, e s p e c ia lly in w ater based sy ste m s. We plan to base a thorough t e s t m arketing program on a tech n ical rep ort to be published in July on Pyropaque in paints.
A quafil diatom ite should find paint ap p lication s, although som e
cu sto m ers m ay object to color as com pared to flux calcin ed com pe
titiv e prod u cts. We sh all publish a b u lletin on the g lo ss reducing
e fficien cy of A quafil during the fir s t quarter and sh all com plete
distribution to a ll m ajor paint p rosp ects by the end of the third
quarter.
.
We shall participate with our distrib u tors in booth and en tertain m ent c o sts at the F ebruary m eetin g of the Southw estern S o c ie tie s for P aint Technology in Houston. P aul Juley w ill rep resen t us.
M arketing m anagem ent, H. T. M ulryan and M. F . W arner,' w ill attend the O ctober national m eeting of the society.
P a in t departm ent sa le s of the Paul Wood Com pany should r ise m a teria lly with the grea test in crea se com ing in the C argill line of o ils and r e sin s.
O rganizational changes (see "Organization") w ill provide considerably b etter s a le s coverage than in 1964.
CAMC-Logiudice-001167
34.
C osm etics
We exp ect a sligh t d ecrea se in talc s a le s to co sm etic and
pharm aceutical m anufacturers during 1965. This w ill stem
principally from lo ss of som e U .S . P. talc accounts, which we
w ere unable to se r v ic e p roperly during parts of 1964 b ecau se of raw
m a te r ia l sh o rta g es. We a lso an ticip a te in c r e a sin g p rice p r e s s u r e
from E astern M agnesia's new plant in'V erm bnt. The T hree Forks
p ilot w ashing operation should produce, a U. S. P. talc from
B e a v e r h e a d c r u d e. We sh a ll t e s t m a r k e t th is p ro d u ct during the
third quarter.
A gricultural C hem icals
T his category co v ers producers of both p esticid es and high an alysis fertilizer.
S ie r r a 's ta lc b u sin e ss in p e s tic id e s should continue about level, and
w e should in crea se our sa le s to fe r tiliz e r m anufacturers by about
$20, 000.
The addition of granule p ro cessin g equipm ent at Olancha m ill w ill m ake p o ssib le a sign ifican t in crea se in Olancha cla y sa le s to C alifornia p esticid e p rod u cers. We p ro ject total 1965 Olancha clay sa les of about $100, 000, or $25, 000 greater than 1964, '
A quafil's m ajor use is the coating of am m onium nitrate p r ills to p reven t caking on sto ra g e. CMC a cq u isitio n p erso n n el have p ro jected an in c r e a se of about $70, 000 to th e se u s e r s in 1965'. We agree that th is is an attainable goal.
The ad d itio n o f Otto K ohl, Jr. , A q u a fil's o p era tin g m a n a g er, to o u r'sa les staff w ill help to insure adequate know ledgeable coverage of national am m onium nitrate accounts and lo ca l p esticid e and fe r tiliz e r u sers of diatom ite, clay, and talc.
T em porary double coverage from the H ouston office (see "Organi zation") w ill also provide a needed extra boost to Aquafil sales effo rts in the la r g e st sa les area-during the critica l ea rly m onths.
M r. Kohl, Jr. w ill attend the W estern A gricu ltu ral C h em icals A sso cia tio n spring and fall m eetin gs.
CAMC-Logiudice-001168
35.
D istribution C osts
We have a lread y described our traffic departm ent's plans for reducing freigh t costs for specific industries and exports.
In addition to th e se , traffic a lso w ill be resp o n sib le for accom p lish in g the follow ing during 1965:
T a lc
1. To e sta b lish rates on Pyropaque from T exas to the N orth e a st. During 1964 we secured routes and a m illin g -in t r a n s it p r iv ile g e at Grand Islan d . In o r d e r to m a in tain se c r e c y as long as p o ssib le, we sh all hold bach rate applications until trial shipm ents have been made late in the f ir s t or early in the second quarter.
2. To subm it a new proposal on talc from T exas to the P a cific N orth w est to be effectiv e before O ctober 31, 1965.
A q u a fil
1. To m ake a com plete study and take appropriate action on diatom ite freight rates during the fir s t quarter.
2. To esta b lish m illing and sto ra g e-in -tra n sit p riv ileg es at
Grand Island,' by M arch 31.
3. To estab lish transcontinental freight rates from K eeler and L os A n geles on diatom ite to perm it stopping of C alifornia origin talc cars for com pletion of loading with diatom ite at F ern ley , Nevada, by M arch 31,
Paul W, Wood Company
The a s s 't. traffic m anager and the sa les coordinator w ill coop erate in an intensive p rogram to reduce Wood Com pany co sts of freigh t and w arehousing. Major goals are:
1. R ed u ctio n of Los A n g eles w a reh o u sin g c o s ts by co n so lid a tio n of. sto c k a t O lym pic B lvd . w a reh o u se, n o t la te r than M arch 31,
2. D ecreasin g warehousing, property taxes, and capital co sts by esta b lish m en t and stringent application o f m axim um p e r m issa b le inventory le v e ls , to be com pleted by January 31.
.c
'
'
CAMC-Logiudice-001169
36.
3. C onstant review of Los A ngeles and San F ra n cisco local c a r ta g e c o s ts and- su b stitu tio n of le a s e tr u c k fo r co m m o n carrier service when circum stances dictate.
4. N egotiation of storage con tracts at Olym pic Blvd. with those of our principals who currently pay w arehousing to the P au l Wood R ealty Los A n geles w arehouse by M arch 1.
5. . R elocation at reduced ra tes of San F ra n cisco stocks by June 1. N egotiation s to be com p lete by M arch 1. '
6. Im p ro v em en t of com bined o r d e r and b ill of lading fo rm . New fo rm s to be in use by Wood o ffices by M arch 1.
O rganization
In ord er to crea te additional opportunities, to ca p ita lize on r e se a r c h e ffo r ts, and to stren gth en a rea s of w ea k n ess, we p ropose the follow ing changes in our m arketing organization during 1965: '
Personnel - Sierra
M arketing su c c e ss or failure is-often self-rein fo rcin g . For exam ple, the m om entum gained from the su c c e ss of M istron Vapor for p itch con trol in pulp and paper led d irectly to other paper m ill u se s - coating, fillin g , and ro sin sizin g im provem ent.
A pplication of the p rin cip les of M istron se le c tiv e ad sorption of organic m a te r ia ls to the rubber and p la stic s in d u stries is also a d ir e c t r e s u lt of th is in itia l s u c c e s s .
S ales in c r e a se s from sa les of high m argin sp ecia lties perm it additional in vestm en t of m arketing tim e and m oney over a broader geographic area at no reduction in p rofits.
F ocu sin g such a large portion of our attention on one part of our
product lin e and on expanding those geographic a rea s w here it
is b est sold can a lso be productive of p rob lem s. The m ost
obvious of th ese is a dilution of effort as each p erson 's
r e s p o n s ib ilit ie s in c r e a s e s . The u su a l r e s u lt can be n e g le c t of
le s s productive lin es and areas.
We have b e e n able to cope w ith th is situ a tio n p a s s a b ly w e ll up
CAMC-Logiudice-001170
37.
to now by upgrading the quality and d irection of effo rt of both our own and distributor sa le s personnel.
H ow ever, 1965 p ro m ises to be critica l as to new products and m arkets. We believe 1965's preparations for the future w ill prove to be as im portant a s w ere those of the pivotal y e a r s of 1957 and I9 6 0 . We th e r e fo r e regard new fie ld p e r so n n e l and p erson n el training as our principal 1 965 organizational goal.
Such p erson n el should be capable of m eeting the challenge of setting new sa le s record s w hile also conducting the Pyropaque te s t m arketing and A quafil expansion program s.
We p rop ose the follow in g schedule of S ierra m arketing p erson n el sh ifts and additions during 1965. ' '
1. J a n u a r y . A d d ition of Otto Kohl J r. o f 'A q u a fil to S ie r r a
sa le s staff with location at Wood Com pany's San F ra n cisco
o ffice. Com plete in January.
_
2. A ddition of sa le s train ee to South P asadena office to cover s a le s of our talc products to in d u stries not now handled by Paul Wood Company, such as paper and rubber. S trangely enough, our own Southern C alifornia area needs help m ore than any other. This new p erson would, after the end of 1965, be tra n sferred to the Wood Com pany, along , with the representation for th ese in d u stries. B egin January. C om plete latest February 28.
3. A ddition of sa le s train ee to C leveland o ffice. T his w ill
help solve our serio u s lack of depth in branch sa le s offices
and p erm it the furore prom otion of our C leveland m anager.
Be'gis. January. C om plete la te st M arch 31.
.
4. A ddition of fully trained sa les engineer to Houston office to p erm it prom otion of Paul Juley and provide short term doubled coverage in im portant Aquafil sa le s te r r ito r ie s. B egin January. C om plete la te st M arch 31, This m ove w ill quite lik ely also require placing H ouston's office g ir l on a fulltim e b asis. .
5. T ran sfer of Paul Juley to South Pasadena as N ational Sales M anager. This p osition has been handled by the V ice P resid en t-M ark etin g with the a ssista n ce of the V ice P resid en tT ech n ical S ervice and Sales C oordinator. The in creasin g
CAMC-Logiudice-001171
38.
com plexity and extent of'division m arketing operations indicates the need for filling th is p ost. It is the con sen su s of m arketing m anagem ent that M r, Juley has proved h im self deserving of this prom otion.
6.' In lin e w ith in c r e a s e d r e s p o n s ib ilit ie s and in r e c o g n itio n of fine r e s u lts , the prom otion of p resen t sa le s en gin eers to Branch M anagers at Boston, Newark, C leveland, and C h icago, e ffe c tiv e January 1, 1965.
P erson n el - Paul Wood Company
One of the d iffic u ltie s attending the organization of the Wood
Com pany a c tiv itie s w as the unfortunate illn e ss of its P resid en t.
M r. Johnson h as now recovered to the extent w here he can
resum e som e of h is duties, but h is age ra ises seriou s doubts
as to ability to function again at full capacity. The Paul Wood
Colnpany board of d irecto rs has th erefore approved the
follow ing:
.
A cceptance of the resignation of M r. Paul Wood as C hairm an of the board effective January 1, 1965.
jE lection of W ilbur Johnson as C hairm an as w ell as P r e sid e n t e ffe c tiv e January 1, 1965.
E lectio n of San F ra n cisco sa le s en gin eer, Ralph Le F ev er as d irector effectiv e January 1, 1965.
R esignation of W ilbur Johnson as P resid en t, and electio n of Ralph L e F ev e r as P resid en t, la te st A ugust 1965, and tra n sfer of M r, Le F ever to L os A n geles,
The appointm ent of San F ran cisco sa le s engineer, John Googins', San F ra n cisco m anager during 1965.
S e llin g ex p en se should rem ain e s s e n t ia lly unchanged by th ese m o v es, sin ce in c r e a se in Mr. Le F e v e r 's salary and h is m oving exp en se should about be offset by reduction in Mr. Johnson's com pensation,
M r. Le F e v e r m ust be replaced in San F ra n cisco by a sa le s tra in ee. Begin A pril 1. Com plete la te st June 30.
CAMC-Logiudice-001172
39.
C on trol
M arketing exp ects to benefit from inform ation generated by m achine accounting for the fir s t tim e during 1965.
Witlj the coo p era tio n of S ie r r a d iv isio n c o n tr o lle r , s y s te m s . have been w orked out which w ill perm it clo se su p ervision of
the quantitative a sp ects of this plan.
The con troller w ill supply m arketing w ith monthly sa le s figu res
c la ssifie d by area, industry, and product, for Sierra and
Aquafil; by principal and area for the paint departm ent of the
Wood Company; and by industry for the cera m ics and p la stics
departm ent of Wood Company.
.'
T hese figu res w ill be review ed m onthly by m arketing m anage m ent, and any m ajor deviation from th is plan noted.
T his should p erm it elim in ation of hand recording of sa le s in the head office "block books".
Both quantitative and qualitative goals w ill be review ed by the ' m arketing and tech n ical se r v ic e v ice p resid en ts and the sa le s coordinator quarterly. We sh all rev ise any part of the plan w hich is in need of m od ification and ex p la in the rea so n s th e r e fo re. This control by exception should provide a r e a listic m eans of a ssu rin g adherence to the plan.
M arketing C osts - Sierra
The changes in p erson n el d escrib ed under "O rganization" plus recom m ended in crea ses in salary le v e ls of m arketing p e o p le w ill r e su lt in a r is e of about $67, 000 in " sellin g exp en se" .
Appendix G d eta ils the so u rces of this in crea se. This breakdown
show s that n ea rly half the in crea se resu lts d irectly from the
A quafil acquisition. It a lso r e v e a ls that co sts other than added
s a la r ie s and sa le sm e n 's ex p e n se s are actu ally exp ected to d eclin e.
Appendix H divides the co st by a rea .
'
D esp ite the absolute in c r e a se , this budget would r e su lt in reduced sellin g co sts per sa le s dollar and m ore im portant, a
rr-- CAMC-Logiudice-001173
40.
red u ction in c o s t per sa les call:
A nticipated Sierra Sales
Including Aquafil (000s om itted)
1964 $4, 250
1965 $5, 220
A nticipated total "Selling Expense" (000s om itted)
Selling E xpense/Sales
367 8. 6%
435 8. 3%
N um ber S ales E ngineers and Branch Manager calls
4, 943
7, 700
C o st S ales E ngineers and Branch Manager calls (000s om itted)
161 218
A verage C ost/call
$ 3 2 .6 0
$ 2 8 .3 0
'rIncludes a ll branch o ffice e x p e n s e s e x c e p t w a reh o u sin g and freig h t for 1964, sam e + an ticip ated d ir e c t c o s ts salary and ex p en ses Otto Kohl J r ., and South P asad en a train ee for 1965.
M ark etin g C o sts - Paul W, Wood C om pany
Wood Company sellin g costs w ill autom atically increase because of fu ll y e a r application of ceram ic and p la stic s departm ents' sa la r ie s and e x p e n s e s , in e ffe c t Only during p a r ts o f 1964. W areh ou sin g and trucking exp en ses w ill also in crease substantially as physical volum e r is e s . A gain, how ever, sellin g c o sts per sa le s dollar should decline- while co st per call w ill show a m arked reduction:
A nticipated Wood Sales Includes principals' billings (000s om itted)
1964 $2, 900
A nticipated total
'
" S ellin g'Expense" (000s om itted)
192
Selling E xpense/Sales
6.6%
N um ber S a les E n g in eers and P residents calls *
7, 000
C o st S a le s E n g in eers and P resid en ts calls * * (000s om itted)
135
1965
$ 3 ,7 6 0 243
6. 4% 10,000
174
A verage C ost/call
$ 1 9 .3 0
$ 1 7 .4 0
CAMC-Logiudice-001174
41.
^Wood Company sa le s calls are reported by product lin e. A single in terview covering m ore than one product line * r e su lts in m ore than one c a ll being rep o rted . T his accounts for the apparent greater num ber of c a lls per man as com pared with Sierra personnel.
^ In clu d es a ll expenses except w arehousing, trucking, and allocation from South Pasadena;
A ppendix I gives d etails of effects of the 19^5 changes d iscu ssed
under "Organization",
.
,,
C onclusion
We b elieve this to be a reasonable, workable, and enforceable plan. We should ap p reciate the reader bearing in mind at all tim e s that the quantitative fo r e c a sts rep resen t educated e stim a tes and are not already realized achievem ents. The qualitative a sp e c ts of the plan are h ow ever designed to provide the b e s t chance of achieving the quantitative goals.
T h ese might be su m m arized as growth through an im aginative
approach to problem s and opportunities by com petent and dedi
cated people. We b e lie v e our ab ility to sh ift ground to m e e t
changed circum stances is reinforced rather than im paired by this
sta te m e n t of goals and o b je c tiv e s. We a ls o tr u st that it w ill help
to convey these to CMC p erson n el not d irectly a sso cia ted with
this division.
CAMC-Logiudice-001175
42.
, A ppendix A
N o v e m b e r 30, 19&4
.
O bjectives
Corporate P o licies ` The P a u l W. Wood C om pany
The m ajor ob jective of this com pany is to earn m oney, both for itse lf and the principals it rep resen ts. T his company has e s tab lish ed as its goal gross sa le s o f $10, 000, 000 annually by the end of 1969. This company w ill also be one of the m ost efficient c h e m ic a l d is tr ib u to r s extant. T h is m e a n s ea rn in g a p ro fit of 4% or $400, 000 net after taxes.
T his com pany is going p laces, and we intend to ach ieve our goal by:
1. C om plete co v era g e of the P a c ific C oast m arket for c h em ica ls and raw m aterials consum ed by the paint, ceram ic, p la stics, rubber, pulp and paper and c o sm e tic in d u stries.
2. Expanding the num ber of p r in cip a ls. The addition of new p r in c ip a ls sh ou ld provid e an a v e r a g e g r o s s m a r g in of 15%,
3 . ' N ew horizons which m eans con stan tly looking to new oppor
tunities such as the acquisition of other distributors or m an
ufacturers.
.
4. A s we grow our em phasis w ill be to r e ly m ore on tech n ically train ed and exp erien ced p erso n n el to handle the in c r e a sin g ly com plex sa les problem s attendant on technical sa les.
5. C ost c o n scio u sn ess with r e sp e c t to se llin g and operating expenses.
6. T h is com pany w ill conform to the p o licy and p ra ctice of Cyprus M ines C orporation's A ntitrust P olicy. '
7. T otal com pensation paid em p loyees w ill be above the industry average for above average perform ance.
8. T he e sta b lish m e n t of s a la r ie s , r e v ie w and ch an ges is the resp on sib ility of the P resid en t who w ill act after consultation w ith th e P au l W. Wood Com pany B o a rd of D ir e c to r s . In lin e with Cyprus' corporate p olicy, com pensation review s a re m ade at the end of each calendar year.
9.. P rom otions w ill be made from w ithin w henever p ossib le.
10. T he em p loym en t and d is m is s a l of p e r so n n e l, excep t o ffic e r s , is the P resid en t's resp on sib ility..
CAMC-Logiudice-001176
43.
A p p e nd i x B
P rin cip a ls C eram ic D epartm ent - The Paul W. Wood Com pany
P rin cip a ls
1. H. C. Spinks C lay Co. P . O. B ox 829 P aris, T ennessee
2. P ittsb u rgh P la te G lass Colum bia Southern D ivision Dos A ngeles, California
3. P o m o n a T ile Com pany 1315 E ast 3rd Street Pom ona, California
4. C hem ical A dditives Los A ngeles, C alifornia
.
5. E d g a r P la s t ic K aolin Com pany Edgar, Florida
6. G lo ste x C h em ica ls C om pany
Los A n geles, C alifornia
7. Hammond Lead Products H am m ond, Indiana
8. A m e r ic a n M e ta ls C lim a x New York City, N. Y.
9. D e se r t M in erals 840 So. M ission Road Los A ngeles 23, California
10.' P e n n s y lv a n ia G la ss Sand 1 Gateway Center Pittsburgh, Pennsylvania
11. International M in erais . Skokie, Illin ois
12. S ie r r a T alc & C hem ical Company D ivision of Cyprus M ines Corporation
Product B all Clays
,
B arium Carbonate
Ground Bisque
China Clay China Clay G laze F rit Lead Silicates Selenium P . V. Clay
Silica
,
F eldspar T a lc
CAMC-Logiudice-001177
A ppendix C
44.
P r in c ip a ls P l a s t i c D ep artm en t - T he P a u l W. Wood C om pany
P rincipals
1. P ittsb u rgh P la te G lass Co. Selectron D ivision Los A n geles, California
2. F er r o Corporation L os A ngeles, California
Product
P olyester R esins, gelcoats
M at, roving, chopped strand, m illed fib res, uni-directional m at, squeegee rubber, fibre glass tape, fibreglass cloth up to 9 -1 /2 oz.
3. E rsk in e - Johns {H ess G oldsm ith) L o s A n g e le s , C a lifo rn ia .
F ib reglass cloth beyond 9 - 1 /2 oz and sp e c ia lty fib reg la ss cloth
4. N orac Company Los A n geles, California
M ethol ethyl ketone p e r o x id e s
5. C en tra l S olven ts & C h em ica l Co. Santa F e Springs, C alifornia
A ceton e
6. U n iversal Sealants L os A n geles, C alifornia
Sealants for vacuum - bagging p rim arily
1k. CAMC-Logiudice-001178
" A ppendix D
P rojected 1965 Talc sa le s by area and industry
Pulp h Paper Paint Rubber C eram ics C osm etics
Ag. Chem.
D ollars (000s om itted) P la stics M isc. Total
Sierra D irect
..
So. P as. -T a lc
43
So. P as. -C lay
Branches B o sto n C h ica g o C leveland
Newark
M ..ion
A la. Ga. F la. Tenn.
T ex. Qkla. Kan. Ark, ) W. Tenn. La. M iss. ) Paul W. W ood-LA Paul W. W ood-SF
. 240 435 28 33 17 22
3
9 136
73 63
4 97 203 146
77
61 80 33 26
2 1 8
59
-
46 52 21 85
1 189
39
70 34 40
1 2
39 1 7 268 78 22 100
6 11 33 91
2
1'
22 22 11
1
1
16
31 2
338 800 264 275 106
29
125
392 179
C arolina & V irginia Minn. Ia. Mo, Nebr. O regon & W ashington M isc. D istributors
23 2 . 184 . 61
109 52 5
3 3
1 22 51
3 28 2
278
5. 3
* 161
19 35
Export.
East Canada
248 46 13
20
W est Canada
1 20
M exico
.
20
51 30
Europe A sia & P acific
-
616 42 18 12 10
13
1
C en t, !k S o, A m e r ic a
39
13
6
-- ____ -
333 21
101 671
41
52
2, 017 991 359
522
257
145 184 145 4, 620 -*
CAMC-Logiudice-001179
46
A ppendix E
P ro jected 1965 S ales by Major Principals
Paul W. Wood Company
C argill, Inc.
Trojan Pow der Company
N eville C hem ical Company
General T ire & Rubber Co.
A lum inum Com pany of A m erica
Sierra Talc & C hem ical Company
Canadian Joh n s-M an ville C o ., L im ited
The E n glish M ica Com pany
D ollars (000s om itted) 490 300 400 40 700 380 375 1 00
2, 785
C eram ics
t
700
P lastics
.
275
3, 760
1u&t CAMC-Logiudice-001180
A ppendix F
47.
Canadian T echnical S e r v ic e E ffort by Q uarters
19 6 5 1 St 2nd 3rd 4th
W innipeg by S ch effel W innipeg by W arner
W estern O ntario by Scheffel W estern Ontario by W arner
32 1
33
4
2
C entral O ntario by Held C entral O ntario by W arner
5 10 5 5 3
Ottawa, M ontreal and E astern Tow nships by M urino
Ottawa, M ontreal and E astern T ow nships by W arner
5 5 55 41
M aritim e provinces by Sprague
55
B ritish Colum bia T otals by quarters
3 20 23 21 20
'.tin CAMC-Logiudice-001181
A ppendix G
48.
E stim ated 1965 Additional E xpenses
T rain ee in C leveland - S alary Other
.
1 R eplacem ent for P . Juley in H ouston - Salary . Other
G irl to full tim e b a sis in H ouston-Salary @:$350 $ 4, 200 L ess paid 1964 . 1 ,6 0 0
P aul Juley to South P asad en a-S alary in crea se $ 4, 000
(August 1965) .
M oving expeiises
2 ,0 0 0
Otto K ohl Jr,, of A quafil - Salary . Plus
.'
: Other
T rainee in South P asadena - Salary . . Other
, $ 12, 000 6 ,0 0 0
$ 8,000 4 ,0 0 0
C om m ission s on se llin g D ecrease - Sweden A bitibi
In crease - Finland
$ 15, 000 3, 000
1 8 ,0 0 0 5, 000
$ 8, 000
4, 000 8, 000 4, 000
2, 600
6,000
1 8 ,0 0 0 9, 000
12,000
( 13, 000)
P erform ance Evaluation Incentive - new em p loyees
C leveland
$ 500
South P asad en a '
..
500
H ou ston
___ 1 ,0 0 0
2, 000
Salary in crea ses . South P asadena
. Boston Newark C lev ela n d Chicago ' H ouston
$ 4,900 500 500 500 500 500
7 ,4 0 0 $ 68,000
CAMC-Logiudice-001182
P' 49.
Appendix H
Projected 1965 Selling Expenses
D ollars (000 s om itted)
South Pasadena
, . ..t ,, . -
,
, ,^
i
S a la r ie s E xecutive* s a le s and c le r ic a l ^$13j[^
C om m issions . - . .
|'
i > 26~.j
.= * \ O th e r -
,V ;
'
ft r
| I
i T S k f f t .v . !V v " . V '
. . ; ^ ;t>V' . '
and c le r ic a l .
.
tp & t : '
V .'.i
iirt-'i-;\j..
St`ty\rj'. A>
^ V , ; :^ T o t'a l^
. % '
c l e r i c a l . ' ? '
' i j ' . ' t .y - v f
-tJ 'J
$ ,17 . i: il"-'#;? 16
:M ' 1 M s x * land` . * : % > 'vif* " "'|^ ^ ? a lar ie s - s a le s an-d. c le ric a l '':*** ' '^ ^ O theT .
, T o ta l ' ' $1
) ?#;
' .V -' *
" ' - ,f e JV ` C hicago
1 vfgp :
, ' S a la r ie s - s a le s S id c le r ic a l
O ther
V
T otal
"* ` $ 24
25
$ 26
31
v 'v!;i
A"* k t-, $ 495%' >\ -, ' : > . ; 4 ' "'^ '
$ 57
H ouston
S a la r ie s - sa le s and c le r ic a l
Other
'
T otal
TOTAL
$ 19 13
$ 32 $435
i
-/Cfr-tr- *Ay
A a iu itx s p a a x a --Kaau-'
J
CAMC-Logiudice-001183
CAMC-Logiudice-001184
