Document jyw016g0npywdX1pe4Q3ygZ7y

FILE NAME: Scotts (SCTS) DATE: 1985 July 24 DOC#: SCTS004 DOCUMENT DESCRIPTION: Report - A lternate Carrier Cost Analysis PLAINTIFFS EXHIBIT SCO-62 V ALTERNATE CARRIER COST ANALYSIS By Pam Lehr July 24, 1985 Distribution: John Cleveland Mike Connor Chuck DeMuth Harvey Goertz Max Kells Gary Smith Mike Thompson Ron Wietelmann SC-0555770 Scotts_Spri nger_021218 Introduction Vermiculite usage in Trionized products exceeded 20,000 tons in 1984 at a cost of $2. million. Annual savings of $1-2 million are theoretically possible by replacing vermiculite with a less expensive alternate carrier requiring no expansion, sizing or special handling. This report summarizes potential savings for a variety of alternate carriers including fly ash and corn cob flour. The ultimate suitability of any proposed alternate carriers must be determined through extensive laboratory, manufacturing and field studies. Current Situation Vermiculite is currently used as an inert carrier in all Trionized products at typical formulation levels of 10-25%. Prior to use, raw vermiculite ore is expanded in one of eight natural gas expanders and then screened to remove sand an other contaminants. The major costs associated with the vermiculite expander operation include maintenance, labor, energy (gas and electric), and sand disposal as well as a 25% vermiculite yield loss. In addition, vermiculite carries inherent quality, supply and environmental risks. 0. M. Scott relies on only two sources in West Virginia and S. Africa for its vermiculite supply. Slight physical differences between W. Virginian and S. African ore require process modifications at the expanders and in production. Serious shortages could result if one of these sources became unavailable for any reason. Although the current vermiculite sources are considered asbestos free, a suggested link between vermiculite (i.e. Turf Builder) and asbestos could create serious public image problems. All of these factors combined highlight the need to consider alternate carriers to replace vermiculite in Trionized formulations. SC-0555771 Scotts_Spri nger_021219 Cost Analysis Bulk delivered prices for 45 inert carriers ranging from rice hulls and pecan shells to clay and perlite were identified by Purchasing and are summarized in Table I. Table II shows an itemized cost comparison between vermiculite and two alternate carriers - fly ash and corn cob flour. (These substances were chosen as examples because fly ash represents one of the lowest cost alternatives and corn cob flour is comparably priced with vermiculite). The savings reported for alternate carriers in Table III and Figures 1-3 are based on the following assumptions: 1. Yield of alternate carriers is 100% vs. 75% for vermiculite ore. 2. Natural gas & electrical usage in expanders is eliminated. 3. Sand disposal is eliminated. 4. Maintenance to expanders system is eliminated. (Detailed maintenance costs are listed in Table 4). 5. Trionized product yield and quality are equivalent to vermiculite based products. 6. Manpower to operate & monitor expansion system is eliminated. Results The estimated annual savings for fly ash and corn cob flour as alternate carriers are $2.23MM ($0.072/lb.) and $1.01MM ($0.033/lb.), respectively. Corn cobs, currently used as a carrier for control products, are slightly above the break even point for alternate Trionized carriers at $154/ton. Figure 2 (Table III A) shows the unit savings for S-1439 Turf Builder (5M bag) at $0.28 (10.1%) for fly ash and $0.12 (4.5%) for corn cob flour. Similarly, Figure 3 (Table III B) shows unit savings on S-1092 Turf Builder Plus 2 (5M bag) at $0.26 (7.7%) and $0.12 (3.4%) for fly ash and corn cob flour. SC-0555772 Scotts_Springer_021220 Process Requirements Until recently, mixing technology has been one of the primary obstacles in finding a suitable carrier to replace vermiculite. The paddle mixer used to blend liquid ingredients with vermiculite is inadequate on less absorbent carriers. A proposed process uses alternate carriers as bulking agents rather than absorbents. In such a process, the carriers are slurried into the resin and form a matrix. The resin is reacted in much the same way MAP and Potash are processed in Polyform. For this type of processing, an efficient alternative to a paddle mixer is an in-line mixer such as the Arde Dilumelt disperser used in Polyform (Figure 4). Residence times for mixing low PH MAP in Polyform were reduced from 5 minutes to 5-10 seconds after implementing the in-line mixer. As a result, premature reaction problems associated with longer residence times were eliminated. This limit has proven capabilities for producing acceptable slurries with low residence time. Figure 5 shows a simplified flow diagram of the Trionized Process. Figure 6 shows the proposed flow diagram with the expander removed and the paddle mixer replaced with the in-line mixer. This scheme would also allow Polyform production in the Trionized Plant. Conclusions 1. If the assumptions listed above are valid, 35 of the proposed carriers could reduce standard costs. 2. Potential savings could exceed $2MM by replacing vermiculite with a low cost carrier. 3. These savings can represent a 10% reduction in standard costs for S-1439 Turf Builder and may stimulate increased sales due to better competitive pricing. 4. Substantial testing of alternate carriers is needed to determine the feasibility of vermiculite replacement. 5. The system that would allow manufacturing of Trionized products with alternate carriers would also permit manufacturing of Polyform in the Trionized Plant. SC-0555773 Scotts_Spri nger_021221 ZZZIZO J06u u d s s h o o s 17ZZSSSO-OS Description Slag, screened Calcium Carbonate (Carey #60) Calcium Carbonate (Carey #80) Bottom Ash Fly Ash (Powder) Sawdust (Hardwood) Slag Gypsum Waste Calcium Carbonate (Med. 20-60) Calcium Carbonate (Fine Q100) Ball Clay, 325 Mesh, Red (101) Ball Clay, 325 Mesh, Lt. Gray (401) Pecan Shells (pith meal) Ball Clay, 325 Mesh C & C Ball Clay (Coppin Light) Clay Attapulgite Diluex Clay Attapulgite (100 Mesh) Clay Attapulgite (200 Mesh) Corn Corb Flour Vermiculite, #4 Ore Furafil M Furafil 0 Powdered Glass (30x50) Powdered Glass (30x80) TABLE I ALTERNATE CARRIER PRICES Bulk Price ($/T) ~n^T3 Description "Clay, Bentonite (Calcium) 17.76(TK)/22.25(Rail) Zeolite, Natural 17.76(TK)/22.25(Rail) Clay, Bentonite (Volclay SPV-200) 19-25 Clay, Bentonite (Volclay #325) 20-25 Clay, Attapulgite (16/30) 34 Powdered Glass (-200 mesh) 37-43 Powdered Glass (-400 mesh) 40-50 Clay, Montmorillonite (16/30) 48.17 Diatomaceous Earth (Grade M-77) 54.67 Diatomaceous Earth (Grade M-78) 55-60 Diatomaceous Earth (Grade M-79) 55-60 Classified Pith/Chaff 55-60 Graded Oak Sawdust (Screened) 62 Rice Hulls 65 Corn Cobs 86 Pumice (Med.) 89 Pumice (Powder) 91.50 Pumice (Coarse) 96-101 Pumice (Grade 7) 104 Pecan Flour (-200 Mesh) 105 Perlite, expanded 105 110 110 Prices provided by Max Kells in letter dated June 12, 1984. Some prices are negotiable. Bulk Price ($/T) 110-125 110-125 120-170 120-170 125 130 130 130-135 130-145 130-145 130-145 135.20 145-150 145-150 154 155-180 160-175 170-175 170-175 235 260 TABLE II ALTERNATE CARRIER COST COMPARISON (ANNUAL BASIS) Raw Materials Maintenance Energy (Gas) Energy (Electric) Sand Disposal Labor Standard Vermiculite (1984 Cost) $2,139,280 132,210 180,720 36,300 17,600 90,000 Total Cost $2,596,110 Annual Savings -0- Savings/lb. Carrier -0- Alternate Carriers Corn Cob Flour Fly Ash (Est) (Est) $1,522,180 43,300 -016,000 -0-0- $ 310,650 43,300 -016,000 -0-0- cjnuli1 0 O V 0 o 0 $1,581,480 $1,014,630 $0,033 $369,950 0 $2,226,160 $0,072 SC-0555775 Scotts_Springer_021223 TABLE III A TURF BUILDER STANDARD COSTS (S-1439) 5M 10M Stock No. Unit Wt. (lb.) Carrier Wt. (%) Cost Raw Material Conversion Packaging Total 23309 23317 22.9 o A 22.9 I '1 $1.52 0.88 0.33 I'16, $3.02 * ^ 3 ^ 1.49 o 0.50 $2.73 D $ $5.01 Savings Corn Cob Flour ($/%) Fly Ash ($/*) 0.12/4 .5 0.28/10.1 0.24/4.9 0.55/11.1 TABLE III B TURF BUILDER PLUS 2 STANDARD COSTS (S-1092) Stock No. Unit Wt. (lb) Carrier Wt. (%) Cost Raw Material Conversion Packaging Total Savings Corn Cob Flour ($/%) Fly Ash ($/%) 5M 23697 16.88 21.5 $2.15 0.90 0.33 $3.38 0.12/3.4 0.26/7.7 10M 23721 33.74 21.5 $4.28 1.51 0.50 $6.29 0.23/3.6 0.52/8.3 15M 23325 (^56726^ 22.9 $4.52 2.10 0.68 $7.30 0.36/5.0 0.84/11.3 15M 23739 50.26 21.5 $6.40 2.14 0.67 9.21 0.34/3.7 0.78/8.5 SC-0555776 Scotts_Springer_021224 o lo '.4 "S'" ESTIMATED ANNUAL SAVINGS VS CARRIER PB^HRTTRIBL"COST n ] ,b V I .i ..c. N J X .a M -4 II l G -. i -.3 0 t MflTEftlfiL s T OH l FLY fiSH C Cf-iL.CflRB. CLftV BriLL Cu^Y A c o n n c o n FLOUR .. FD5 " POWDERED GLOSS ftT1. CLftV IG/30 ftICL HULLS tf g COSH COES PUMIct in PECAN FLuL'H 20 *53 aa 110 135 M3 154 173 233. x .... X ... X .7 3 V Ns N ...... L0 T0 ES 0 rsn T 20" " R F T r a ~ T W RAW MATERIAL COST ({/TON) X, X,X;................... \ \10 'T E S T ~ ~ Z I 8 570 FIG URE I: Total Annual Savings For Various Alternate Carriers. (Based on 20,570 Ton Vermiculite Usage in 1984). SC-0555777 Scotts_Springer_021225 FERCENTRGE bRVINGS (PER bf-1 l'U> VS .CWRRIER RRkJ- M UTER IRL- G O S T ..... b fl V I !'! n HHTER3RL 4/TON G [ FLY ASH 20 s 2 C A L . C A P S . C L A Y 43 .SfiLL..CLAY.... .0.... IG 4 C O R N C O B F L O U R 38 5 POWDERED CLASS 110 B ATT. CLAY IG/30 125 -13 ?..R-UX -HULLS........ *4- f. L'l.'KM CURB 154 9 PUMICE 172 10 PECHM FLOUR 235 S0--- V3-- 50---- 50-----100 T 2 0 14iJ"lW3 l!hi"'2ES~ I Z t i~ 7 W ROW MATERIAL COST if/TON) FIGURE II: Unit Savings In Dollars (Top) And Percentage Of Total Standard Cost (Bottom) For 5M Turf Builder (S-1439) SC-0555778 Scotts_Springer_021226 . 1 .25 (i_ . 15 . 1 .05 U ui i: v \2 ESTIMATED SAVINGS (PER 5M TS+2) VS CARRTe R I?AN I(AfERIAL ''C0ST..... v - xx. \4 \ s \ * MATERIAL lx TON 1 FLY RSH 20 2 CtfL.CARB. CLAY 49 3 BALL CLAY 4 LCRN COB FLOUR 39 5 POWDERED CLRSS 110 t ATT. CLAY ib/BS i3d *1 RICE HULLS MB H CORN CODE 134 13 PECAN FLOUR 233 x X 7 X.3 \9 X .V X .13 X. T0 TIT tts SB rasTTno' h o i w T r i r e ~ Z T ] L r T 7 r m RAW MATERIAL COST U/TON) 10 x. PERCENTHGL CAVINGS (HER 511 I LA-2) VS CARRIER RAM MATERIAL COST H X 5 H0 nnTERinL 1'TOH l FLY FISH 0 lmL.CmRB. CLAY 43 3 BALL CLAY 60 4 CORK COB FLOUR 33 5 POWDERED GLASS 110 E Hf T. CLAY Ui-'-JO 123 y!.. tvl-CE-AUMAi....... 144- t UUKN CUtS 154 B PUMICE 173 13 PECAN FLOUR 235 X. 9 X 10 T U -- TS CD* ITS---10a ' 120 H 0 " " r a T T J I T T B C r -'TUT RAW MATERIAL COS I is/TON) FIGURE III: Unit Savings In Dollars (Top) And Percentage Of Total Standard Cost (Bottom) For 5M Turf Builder Plus 2 (S-1092) SC-0555779 Scotts_Springer_021227 FIGURE IV: Illustration Of In-Line Mixer Currently Used In Polyform. FIGURE V ocn cn cn oo Scotts_Springer_021229 FIGURE VI SC-0555782 Scotts_Springer_021230 TABLE 4 VERMICULITE HANDLING SYSTEM MAINTENANCE COSTS (1984) Equip.NO. Description Labor Materials *0005 *0009 *0010 *0011 *0015 *0017 *0018 *0019 *0022 *0023 1008 1009 1010 1011 1012 1013 1014 1015 1016 1017 1039 1040 1041 1042 1182 1227 1228 1230 1286 1287 1288 1289 1290 1291 1292 1293 1294 1295 1296 1297 1298 1299 1301 1302 1303 1304 1305 1306 Vermiculite Feed Conveyor #1 Raw Ore Screw #2 Raw Ore Screw #3 Raw Ore Screw H4 Raw Ore Screw H5/H6 Raw Ore Screw #1 Vermiculite Transfer Screw #2 Vermiculite Transfer Screw #7 Raw Ore Screw its Raw Ore Screw #1 Stoner #2 Stoner #3 Stoner Itl Stoner Fan #2 Stoner Fan #3 Stoner Fan Itl Turbo Blower <12 Turbo Blower #3 Turbo Blower <14 Turbo Blower <14 Stoner Fan <15 Stoner Fan #6 Stoner Fan <17 Stoner Fan <18 Stoner <14 Stoner <15 Stoner <17 Stoner <18 Stoner Fan <11 Control Panel <12 Control Panel <13 Control Panel <14 Control Panel <15 Control Panel <16 Control Panel <17 Control Panel <18 Control Panel <11 Flame Control System <12 Flame Control System <13 Flame Control System <14 Flame Control System 05 Flame Control System #6 Flame Control System 117 Flame Control System <18 Flame Control System HI Recorder <12 Recorder <13 Recorder $1,760.00 1,144.00 330.00 561.00 66.00 33.00 264.00 418.00 11.00 0.00 1,309.00 1,155.00 1,749.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 132.00 352.00 1,067.00 869.00 1,133.00 0.00 451.00 693.00 0.00 440.00 495.00 253.00 187.00 0.00 55.00 0.00 121.00 0.00 44.00 22.00 22.00 0.00 11.00 0.00 0.00 $58.16 230.04 13.41 16.09 0.00 0.00 73.12 21.11 0.00 0.00 90.82 373.93 689.63 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 52.96 347.79 60.69 83.25 0.00 429.29 501.94 0.00 457.86 0.00 226.09 429.29 0.00 47.71 0.00 325.00 0.00 0.00 94.71 325.00 0.00 0.00 0.00 0.00 Equipment Retained with Alternate Carrier Handling System Total $1 818.16 1 374.04 343.41 577.09 66.00 33.00 337.12 439.11 11.00 0.00 1 399.82 1 528.93 2 438.63 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 132.00 404.96 1 414.79 929.69 1 216.25 0.00 880.29 1 194.94 0.00 897.86 495.00 479.09 616.29 0.00 102.71 0.00 446.00 0.00 44.00 116.71 347.00 0.00 11.00 0.00 0.00 SC-0555783 Scotts Springer_021231 Equip.No. 1307 1308 1309 1310 1311 2014 2025 2026 2027 2056 2063 2065 2101 2102 2103 2106 2107 3005 *3008 3009 3010 3011 3021 3052 3053 3081 *3082 *3083 *3083A *3084 *3085 *3086 *3086A *3087 *3087A *3088 *3088A *3089 *3089A *3094 *3095 *4008 *4053 4055A 4055B 4055C 4055D 4055E 4055F 4055G 4055H 4059 4060 4061 4062 Description #4 Recorder H5 Recorder H6 Recorder #7 Recorder #8 Recorder #8 Turbo Blower HI Port Valve #2 Port Valve #3 Port Valve H4 Port Valve H8 Port Valve H5 Port Valve #5 Turbo Blower 116 Turbo Blower 117 Turbo Blower 116 Port Valve 117 Port Valve #5 Expander Dust Coll. Rotary Valve HI Expander #2 Expander 113 Expander 114 Expander 116 Expander 117 Expander 118 Expander HI Silo H2 Silo Positioner H3 Silo H4 Silo H5 Silo Positioner H6 Silo Positioner H7 Silo Positioner H8 Silo Positioner Dust Coll. Rotary Valve 111 Dust Coll. Screw H3 Silo Dust Coll. Cyclone HI Secondary Blower H2 Secondary Blower H3 Secondary Blower H4 Secondary Blower H5 Secondary Blower H6 Secondary Blower H7 Secondary Blower H8 Secondary Blower HI Drum Feeder H4 Drum Feeder H3 Drum Feeder H4 Drum Feeder Labor 0.00 110.00 44.00 44.00 77.00 198.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,190.00 902.00 2,728.00 6,787.00 6,226.00 1,419.00 7,460.00 539.00 3,102.00 88.00 209.00 0.00 429.00 825.00 220.00 0.00 253.00 0.00 473.00 0.00 44.00 0.00 968.00 539.00 0.00 121.00 33.00 0.00 0.00 0.00 0.00 165.00 132.00 0.00 165.00 176.00 33.00 44.00 Materials 0.00 0.22 325.00 91.34 0.00 309.96 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,224.92 793.15 176.99 1,704.82 1,345.03 61.40 921.47 13.23 1,111.17 7.71 0.00 0.00 45.19 132.23 6.56 0.00 0.00 0.00 70.00 0.00 0.00 0.00 0.00 45.78 0.00 2.00 0.00 0.00 0.00 0.00 0.00 109.28 0.00 0.00 0.00 29.72 0.00 4.56 Total 0.00 110.22 369.00 135.34 77.00 507.96 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5,414.92 1,695.15 2,904.99 8,491.82 7,571.03 1,480.40 8,381.47 552.23 4,213.17 95.71 209.00 0.00 474.19 957.23 226.56 0.00 253.00 0.00 543.00 0.00 44.00 0.00 968.00 584.78 0.00 123.00 33.00 0.00 0.00 0.00 0.00 274.28 132.00 0.00 165.00 205.72 33.00 48.56 SC-0555784 Scotts_Springer_021232 J/' Equip.No. Description Labor 4063 4064 4065 4066 *4067 *4068 *4070 *4071 *4072 4074 5008 5009 5010 5011 5022 5023 5024 5028 *5042 *5043 *5044 *5045 *5046 *5047 *5048 5051 5052 5053 *5056 *5057 6004 6005 6006 6012 6019 *6021 6024 6025 6028 6029 6031 6032 6033 6034 *7020 *7021 *7025 8031 8032 8033 8035 8036 8037 8038 F1005 115 Drum Feeder 116 Drum Feeder #7 Drum Feeder #8 Drum Feeder Distribution Screw Dust Coll.Double Dump Valve Vermiculite D.C. Discharge Screw Dust Collector Main Fan Dust Collector Housing Elevator Screen #1 Cyclone Valve 111 Hydro Fan 112 Hydro Fan 113 Hydro Fan <12 Cyclone Valve 113 Cyclone Valve 114 Cyclone Valve 115 Cyclone Valve 111 Ore Elevator 112 Ore Elevator 113 Ore Elevator 114 Ore Elevator 115/116 Ore Elevator 117 Ore Elevator 118 Ore Elevator 116 Cyclone Valve H7 Cyclone Valve 118 Cyclone Valve Ore Unload Elevator Dust Collector 111 Hydro Filter 112 Hydro Filter 113 Hydro Filter H4 Hydro Filter 115 Hydro Filter "C" Conveyor 116 Hydro Filter 117 Hydro Filter 118 Hydro Filter Fan 118 Hydro Filter 115 Hydro Filter Fan 116 Hydro Filter Fan 117 Hydro Filter Fan 114 Hydro Filter Fan "A" Conveyor "B" Conveyor Dust Collector Fan Roof Screw 111 Vermiculite Expander Elev. 112 Vermiculite Expander Elev. 113 Vermiculite Expander Elev. 114 Vermiculite Expander Elev. 115 Vermiculite Expander Elev. 116 Vermiculite Expander Elev. Sand System 88.00 165.00 0.00 308.00 517.00 143.00 462.00 220.00 957.00 330.00 0.00 616.00 363.00 286.00 33.00 2,090.00 33.00 33.00 748.00 275.00 803.00 363.00 6,251.00 5,973.00 748.00 198.00 0.00 22.00 374.00 407.00 2,168.00 649.00 121.00 22.00 253.00 374.00 275.00 352.00 869.00 341.00 517.00 275.00 242.00 66.00 847.00 1,265.00 176.00 1,650.00 1,485.00 297.00 88.00 506.00 22.00 1,122.00 9,372.00 Sub Total (Retained) Total Materials Total 17.64 0.00 0.00 12.07 252.22 101.82 41.29 0.00 372.20 0.00 0.00 37.54 0.00 34.43 26.70 101.71 0.00 0.00 110.21 0.00 60.65 140.43 139.51 7 ,309.68 9.36 116.18 0.00 0.00 17.45 651.55 823.90 9.36 0.00 0.00 5.74 843.93 643.31 0.00 282.33 0.00 377.90 0.00 0.00 0.00 657.71 1 ,471.48 52.95 0.00 255.05 0.00 0.00 153.29 0.00 288.89 2 ,811.09 105.64 165.00 0.00 320.07 769.22 244.82 503.29 220.00 1,329.20 330.00 0.00 653.54 363.00 320.43 59.70 2,191.71 33.00 33.00 858.21 275.00 863.65 503.43 6,390.51 13,282.68 757.36 314.18 0.00 22.00 391.45 1,058.55 3,441.90 658.36 121.00 22.00 258.74 1,217.93 918.31 352.00 1,151.33 341.00 894.90 275.00 242.00 66.00 1,504.71 2,736.48 228.95 1,650.00 1,740.05 297.00 88.00 659.29 22.00 1,410.89 12,183.09 $43,295.99 $132,209.19 SC-0555785 Scotts_Springer_021233