Document aD9G1GQRKwYLQ1JzJ4kvxKE3B

MAR 2 '1974 Republic Foil National Aluminum A Unit of National Steel Corporation TMIANOLC STRICT. DANIURV. CONN OHIO TKLtOHONK <JOS> T4j.|?Sl March 25, 1974 Mr. Richard L. Rollins , Vice President Engineering JARD COMPANY, INC. P. 0. Box 650 Bennington, Vt. 05201 SUBJECT: Proposed Toxic Pollutant Effluent Standards of the Environmental Protection Agency Dear Mr. Rollins: We understand that the water effluent standards for Poly chlorinated Biphenyls (PCB's) as proposed by EPA and published in the December 27, 1973 Federal Register are restrictive enough to provide an effective ban on the manufacturing and use of this material. We, also, are aware that PCB's are the principal impregnant used in lighting, air conditioning, motor and power factor capacitors and that the one immediate fall back impregnant available, mineral oil, would require capacitor manufacturers to double the size of a capacitor to achieve the same electrical ratings which, in turn, requires twice as much aluminum light gauge capacitor foil. You have asked Republic Foil to answer questions as they pertain to Republic Foil and to our industry, the producers of light gauge aluminum capacitor foil. Any comments we make about our industry must be understood to be our current best estimate as to its position or condition. Before answering your questions, perhaps several comments should be made about our company. We have been supplying light gauge capacitor foil for more than 20 years and currently we are the single largest United States producer and supplier of this foil to domestic capacitor manufacturers, if we exclude General Electric Company who produce and supply most of their captive needs. Approximately 70% of the light gauge capacitor foil we sell goes into lighting, air conditioning, motor and power factor capacitors. oo^a*9 TOWOLDMON0055257 To: Mr. Richard L. Rollins JARD COMPANY, INC. March 25, 1974 Page 2 Our best answers to your questions follow: 1) Do light gauge capacitor foil producers have the capabilities to provide twice the aluminum foil now being supplied to lighting, air con ditioning, motor and power factor capacitor manufacturers? ' We must first answer this from our ability to do anything. Since January 1973 we have been producing the maximum amount of light gauge capacitor foil possible for us to roll at our Danbury, Connecticut rolling mill. We are on a firm allocation to all our customers for the balance of 1974 and anticipate this condition continuing throughout 1975. As such, we cannot increase our production of capacitor foil, much less double it. 1 With respect to our domestic industry being able to supply substantial additional capacitor foil, we can advise that it appears very unlikely during the balance of 1974 even though there is a small amount of additional capacity coming on stream. The installed capacity will not even solve current shortage situations that exist. Foreign suppliers of capacitor foil to United States ca pacitor producers have been making a concerted effort to get out of selling in the United States for more than a year now, and what sales they have left here are at premium levels to United States published capacitor foil prices. 2) What are the limitations of our industry producing the needed foil quantities? Republic Foil limitations are primarily two-fold. The first is rolling mill capacity and the second is basic aluminum availability. If we had additional mill capacity, we-would have an almost impossible task getting more aluminum to roll. The critical supply of aluminum has been well documented during the past twelve months. This shortage of aluminum applies not only to us but to our industry. 3) What is the probability of significantly removing the limitations or alleviating the cause of the limitations in the near future? 0042860 To: Mr. Richard L. Rollins JARD COMPANY, INC. March 25, 1974 Page 3 For Republic Foil, it is not likely that capacity limitations will be changed in the near future. Lead times on new rolling mills and related equipment are so extended that were expansion plans approved within say six months, it would then be two years before new production facilities would be on stream. Even with additional rolling capacity basic aluminum availability would still be a limit ing factor. We cannot comment on what our industry is planning other than to say we know of modest capacity being added in the next year, but we don't believe this would provide much, if any, relief for the quantities that might be required due to the pro posed ban on PCB's. 4) If capital expenditures are need to provide the above requirements, what changes in the market (such as price) would be essential? Certainly for any producer to supply more capacitor foil major capital expenditures would be required. We could not sub stantiate investment with today's return and even if the return was satisfactory, basic aluminum availabiLity again must be con sidered and assured. We cannot comment on our industry's position in this area as each company1s capital re juirements and foil pro duct mix are different. In summary, we do not believe that if aluminum foil requirements were doubled for lighting, air conditioning, motor and power factor capacitors our industry could produce anywhere near enough foil to supply the capacitor industry's sudden increased requirements. Sincerely yours, REPUBLIC FOIL/ NATIONAL ALUMINUM JWD:mvz J _ s', Jr. Sales Manager Electrical Products 0042 ttbl