Document g27pb6Dj4Z518GnXmvjdaR4jq

tfr 34 COLORED PIGMENTS Technology Assessment Year Product Process 1975 N/A N/A 1980 N/A N/A 1986 N/A N/A Support Business Mission Category Strengthen Sustain Harvest Redirect I II III IV X Definition of Business Du Pont's colored pigments business is comprised of four broad product lines, both for internal use* especially for F&F Department, and for sale to the merchant market. The product lines are: Inorganics - Du Pont manufactures chrome yellows (lead chromate), molybdate oranges (lead chromate/ molybdate) and zinc yellow primers (zinc chromate). These include Krolor silica-encapsulated products of special value where greater chemical and heat resistance is required. Cadmiums, iron oxide and iron blue are inorganic pigments which Du Pont does not offer. The tabulation below presents the inorganic product lines of each of the competi tive companies. Chrome Moly Zinc Cadmium Iron Iron Yellow Orange Yellow Pigments Oxide Blue Other Du Pont Ciba-Geigy American Hoechst BASF Wyandotte Mobay Harshaw Sun Chemical X X XX X x (No Inorganics) (No Inorganics) X (No Inorganics) X XX X Quinacridones (QA) - These red, violet and gold pigments offer outstanding light stability and weather resis tance. They are used where durability needs require the use of premium products in automotive finishes, plastics and universal colorants. Du Pont intro duced QA pigments in 1958 and has the major portion of world capacity. Other QA producers include Sun Chemical, Mobay and Hoechst (W. Germany). Copper Phthalocyanines (CPC) - These blue and green products have outstanding strength, fastness and N 26951 DU P050146061 35 PRO! EQUILIBRIUM PROFITABILITY PROJECTION COLORED PIGMENTS 1980 1980 Actual Eguilibrium 40* 1986 Equilibrium 30I 20' 10* 0 -10 GASchlenk/cmj 9/81 DUP050146062 - 36 chemical stability. Du Pont consolidated its line in early 1981 to offer greens on a resale basis. Cheap foreign and domestic crude CPC sold to domestic pigment finishers is a major factor in this market. Nearly all colored pigment producers offer CPC products. Other Organics - A broad range of pigments, principally azos in the red and yellow hue range are available. No manufacturer can offer a "full line" of azos; companies tend to concentrate on servicing a particular industry, e.g., Sun Chemical and BASF Wyandotte concentrate on printing ink, or they develop proprietary products based on patented chemical structure, e.g., Hoechst's benzamidazolones and Ciba--Geigy's isoindolinones. Inter mediate position is a key element in maintaining long term position. Profitability Position (Domestic) Factor Contribution to Du Pont Equilibrium PROI - % f98Q - I9I6 Inorganics (proprietary items) QA (scale, process & integration) CPC (crude investment & costs) Other Organics (intermediates position) Total 1 7 (5) 0 1 6 (4) (3) ~U~ Strategic Position The major competitive strengths and weaknesses of the companies considered here are: Strengths Weaknesses Du Pont Scale and process advantage in QA. Declining azo inter mediates position. Back integration to Manufacture of CPC dimethyl succinate, crude adds investment a key QA intermediate. and cost. CibaGeigy Proprietary Krolor inorganics. General purpose D.S. facilities. Heavy reliance on stagnant or declining inorganics market. Relatively weak in azo intermediates. Technology transfer from parent company. Batch inorganics technology. Import isoindolinone pigments, DUP050146063 - 37 - Strengths Weaknesses American Hoechst Good azo intermediate Weak pigment marketing position. effort. Import benzamidazolone pigments. BASF Wyandotte Fair azo intermediate position. Import CPC specialty products, Acquisition of U.S. facilities (Chemetron) not smooth. Some key people and business lost. Multiple problems at Huntington, WV, plant have forced rationalization to their Holland, MI, plant. Mobay Excellent production site available for expansion at Bushey Park, SC. Good position in QA and perylene pigments. Harshaw Best overall process/ Large dependence on environmental position lead/cadmium pigments. in lead/cadmium pigments. Sun Chemical Excellent integration of pigment business in printing business, including ink and printing equipment. Heavy corporate dependence on printing {^70 % of sales and earnings). Use Phthalchem as raw materials supplier. Scale and process advantage in CPC and diarylide yellows. Newest U.S. colored pigments plant. DUP050146064 - 38 APPENDIX hho bk TECHNOLOGY ASSESSMENTr BUSINESS MISSION AND SUPPORT TERMINOLOGY Technology Assessment Symbol ___________Interpretation___________________________________________ 0 Equal to the best competitive technology, product or product line. + Superior to the best competitive technology, product or product line. Inferior to the best competitive technology product or product line. Support Category Symbol _______________ Interpretation______________________________ I Full support - unique competitive position. II selective support - strong competitive position. Ill Limited support - fair competitive position. IV Minimal support unless concerns are resolved - weak competitive position or business under review. Business Mission Key Word ________________________Interpretation___________________ Strengthen Resources are applied in a positive manner to strengthen important elements of the business rela tive to the major competitors. Expected results could be increased market share, lower unit costs, and/or a broadened product line. Strategies could include new plant construction, vigorous cost reduc tion programs or high level of new product research. Sustain Businesses with sustain missions are applying re sources in a manner perceived to maintain existing relative market shares, cost position, and/or prod uct lines. Harvest The relative position of a business with a harvest mission will be allowed to weaken versus competition. If a business is low growth and competition does not choose to be aggressive, such a business can have a harvest mission, generating cash, and providing a good return for long periods of time. If competition DU P050146065 - 39 APPENDIX (Continued) Redirect chooses to mount programs to increase market share, build new capacity* and expand product lines, businesses with harvest missions may choose not to react or may prune to a smaller profitable subsegment of the market place. This is a temporary mission assignment, indicating a significant change from a previous mission to correct near term a persistent business deficiency. Likely missions following Redirect are Harvest or Withdrawal. DUP050146066