Document YrzjNrLZnMG057vzNpp1MDxqy
Description and Reasons Required
Proposed Work and Cost
Funds of -------------------------------------------------------------------------------------------;--$82,627 are requested to purchase and install a replacement ribbon mixer for the manufacture of Sulfate and Phthalate Cyastab heat stabilizers.
Present Situastion
The Chicago Plant is the only operating unit of American Cyanamid which produces lead Sulfate and Phthalate heat stabilizers supplied to the PVC industry.
All lead Sulfate and Phthalate heat stabilizers are processed through the steain jacketed ribbon mixer, the only reactor in the plant which can be utilized for meeting the annual sales demand for these products.
For 1980, the sales for these two stabilizer types are budgeted at M4.35 pounds ($M3.9). First quarter sales were Ml.26 pounds ($Ml.04) . ' \
The 600 gallon stainless steel clad ribbon mixer, installed in 1960, has over the years been patched many times, but now has reached the point where the metal is too thin to weld. It is estimated that the effective life of the mixer is, at the most, one year.
Justification
If Cyanamid is to continue as a major supplier of lead stabi lizers for the PVC, used in the wire and cable industry, it must be able to offer a wide range of stabilizers to satisfy an estimated M30 pounds per year market, with a 4% annual growth rate. Lead sulfates and phthalates account for over half of this market.
If the existing ribbon mixer is not replaced, we will lose the current $M3.9 of sales Of these products.
Commericial Factors
This order supports a plant budget for lead stabilizers as follows:
Sales
Marginal Income
P0S
(K$/lb,,)
Lbs.
$
$ $%
1980 Budget
7,850
6,968
2,944
42.2
2,282
32.7
First Quarter 1,945
1,675
649
38.7
486
29.0
Details of Proposal
The ribbon mixer will be replaced in kind utilizing the electric motor and drive components from the existing mixer. The Phthalate Anhydride mixer will be cerrtered over the new mixer, rather than off to the side. The sulfuric acid and water will be metered and mixed in an adjacent tank and pumped to the top mixer by conveyor.
Production Factors This proposal will not alter product quality or production rates.
Contingent Future Commitments This proposal will not require additional funds to complete.
Alternatives Considered
Utilization of the Cowles mixer in Bldg. 24 is not feasible due to the small batch size allowable and the reduced solids content allowable in the type of reactor.
Risks No operating risks are involved.
Concise Summary
To continue present production fates, replacement of the physically exhausted mixer is mandatory.
CYWI 24-0006322
NA Scot r. v. 11 -ftp
11-69
CrA^AMJJP __
REQUEST AND AUTHORITY FOR CAPITAL
REPORTING CLASSIFICATION
DATE APPROVED
JOB ORDER NO.
EXPENDITURES / RETIREMENTS
0-1
DIVISION OR COMPANY <
Organic Chemicals Division
l o c at io n
J.0. CONTROL POINT
Chicago Plant
JOB TITLE
HQ?
SUMMARY OF AMOUNTS
DESCRIPTION
LOCAL CURRENCY
e s t ima t e d p r o j e c t c o s t
DISMANTLEMENT EXPENSE
TRANSFER EQUIPMENT GROSS AMOUNT FOR.APPROVAL
U.S. DOLLARS
$81,177 1.250
$82,627
Purchase and install ribbon mixer.
replacement LESS TRANSFER EQUIPMENT
LESS SALVAGE OR TRADE-IN ALLOW.
NET CASH REQUIRED (cor-3027)
$82, 627
1
\
RETIREMENT DATA
AMOUNT
COST DISMANTLEMENT
6.250 1.250
LESS SALVAGE
ECONOMIC JUSTIFICATION
6-YEAR AVG.
NET SALES NET SAVINGS BEFORE TAXES NET AFTER TAXES % ROI (ON TOTAL INVEST.) .PAYOUT YRS,
REV.
1 2 3 4 5
REVISION DETAIL (g r o s s a mt s .)
Da t e
AMOUNT
CVm. a u t h o r iz a t io n
TOTAL- CHARGE RESERVE
7.500
6
DESCRIPTION AND REASONS REQUIRED
Funds of------------------------------------:------------- ----------------------------------------------------------------- $82,627
are requested.to purchase and install a replacement ribbon mixer for the manufacture of Sulfate and Phthalate Cyastab hesat stabilizers.
SUMMARY OF ESTIMATED COST - Details on GOF-3027
ITEM NO.
DESCRIPTION
ESTIMATE NO.
STARTING DATE
COMPLETION DATE
when approved
MATERIALS
LABOR
ENGINEERING
TOTAL
Per attached estimate
ITEM NO.
972 -1 2
771
NET CASH REQUIRED
ACCOUNTING TREATMENT
Dr. $75,477 P. P. E (2A 320)
TVr -
F.vnpn.qe as incurred
Dr. $3,600 Expense as incurred
Dr. $1,250.Pes..for Depr. ..(61-320)
Cr. $6,250 P. P. & E. (61-320)
Dr. $6,250 Res. for Depr. (61-320)
6Q.227 hi.non 4nn
-32,62 7-
DEPR.RATE
7 1/4%.
RECOMMENDATIONS
NAME PRty5?CT SPONSOR
AND
APPROVALS (c h e c k b o x )
REC, APPR.
DATE
iMr*
ACCOUNTING TREATMENT / ECONOMICS APPROVED BY DTV. CONTROLLER {CHECK BO EIESI]
POST AUDIT PERIOD
po s t a u d it d u e d at e
OATE
DISTRIBUTION
GENERAL MANAGER VICE-PRESIDENT
CYWI 24-0006323
0C-72-1063 r ' 5/t>`5
DETAIL SHEET
SHEET NO.
JOB ORDER NO.
7
c o mp a n y
Arerican Cvananid Cormanv
ITEM OR CODE NO.
DESCRIPTION
100-001 Ribbon I fixer
770-001 Hove Phthalate Anhydride Mixer
770-002 Relocate dust, collector
100-002 Acid water mixing tank
100-003 Mixer for tank
100-004 Pumps, (two)
100-005 Acid meter
100-006 Phthalate Anhydride conveyor
500 Piping
'
530 Electrical
771 Dismantlement
520 Sheet Metal
100-007 Freight
972 Tax 5% @ 68.75% Selling Price
Escalation, 5%
870 Engineering
Dismantlement
Ribbon Mixer (Less Drive)
Totals
LOCATION
DATE
'Larch 1?, 1930
Cb-ir ,n n-o
EQUIPMENT OR
MATERIALS
LABOR
TOTAL
Engineer}r
34,495
2,000
36,495
- 100
500
600
500 2,500
3,000
1,540
100 1,640
600 100
.700
4,308
200 4,508
3,000
100 3,100
12,000
2,000
14,000
1,000
1,500
2,500
2,400
2,500
4,900
1,250
1,250
1,000
1,500
2,500
1,000
1,000
2,300
2,300
3,734
3,734
400 400
69,227
13,000
82,627
400
Acq. Date Aco. Amt. Dispositio 2
6/71
6,250
Scrap
CYWI 24-0006324