Document byKB0rkgMDeMeER9ooGQQdX3Z

!S and of plasticizers for plastics); resorcinol (useo primarily to produce achesives used m rubPer tires ana lammatea wood); anti oxidants (used in ruDber. plastics and other prpaucts): ana a group of intermediate chemicals, primarily coal tar acids, iusea to make many other cnemical products.) Coatings and Resins Division is a grow ing supplier of polyester resins (used m glass-reinforced and nonremforced piasucsi: bituminous coatings (for unaerground pipe lines. tanks ana severe incustnai applica tions); and chemicai-baseo coatings (used on swimming pools, water storage tanks, sewage treatment facilities and marine and moustrial applications). Building Materials Division makes coldapplied roofing and maintenance products to supplement high-performance roofing anc waterproofing products based on pitches (used primarily on commercial and industrial structures). Other subsidiaries manufacture poly ester button blanks and buttons and other lines related to protective coatings, roofing and waterproofing systems. Raw Materials and Fuel Organic Materials depends heavily upon coal and coal-derived products for raw materials. Most coal tar processed is pur chased from steelmaking operations, under contract arrangements with varying periods and conditions. Purchasing agreements cover such other important raw materials as coal, benzene, orthoxylene and additional materials from the petrochemical industry. Arrangements for long-term commitments of raw materials Irom various sources ol supply have been made in the past anc will con tinue to be made. On the Oasis ol existing arrangements, it is not expected that there will oe any maior disruption of business m 19'9 as a result of snortages of raw mate rials or energy. About a0% of Organic Mate rials energy needs are supplied by natural gas. 30% by luei oii and neariy 20% by coal; other sources supply 10%. Competitive and Seasonal Conditions Most of Organic Materials products are sold in highly competitive markets. Except for cer tain proprietary items, there are at least five or six suppliers of identical products in all business areas, as well as competition from alternative materials performing the same function and a substantial quantity of im ported material. The principal factors in com petition are price and product performance. In a number ol cases, service also is impor tant. In cerlain product lines, Koppers has an advantage because of multiple production lo cations or because the manufacturing plant is located near the markets it serves. In others, Koppers has an advantage because of captive-use opportunities within the Group or other Koppers operations. Although the major portion of Organic Materials business is not affected by sea sonal variations, winter weather does reduce volume in certain roofing, coating and other construction product lines. In addition, se vere winter conditions have disrupted chemi cal plant operations in past years, which temporarily dampened sales. Organic Materials products are gener ally marketed nationwide through the Group's sates organization, although certain lines are marketed through independent distributors and agents. Substantial inventories of critical raw materials and finished products are main tained, but it is not the practice to carry customer inventories or to provide financing.