Document mJ2y5yZMa0Ea7RXbZjYB38XQ

FILE NAME Cape Asbestos CAPE DATE 1969 July 8 DOC CAPE135 DOCUMENT DESCRIPTION Letter to Dr. Gaze NAAC RE financial returns & customer expectations in US Market Legal - Tibbs Case Exhibit 33 EL CTRONIALY FILED - July 8 1969 2023 Oct 18 12:13 Dr. R. Gaze The Cape Asbestos Company Ltd. 114 Park Street PM - London W. England RICHLAND Dear Richard am sorry to be so tardy in replying to your letter of the 23rd June - but I have been travelling quite a little COM ON Your letter points to the fact that NAAC has been receiving a % commission on fibre purchases for customers we are now selling directly and who formerly purchased by contract from the Mines These customers are Keene Corporation formerly Baldwin- Ehret Carey Fibreboard GAF formerly Ruberoid and Owens Corning PLEAS You also list in your letter Johns Manville and Pittsburgh Coming - however we have never received more than 2.5 % commission on these two customers Naturally I accept your decision in this matter and we can revert to the 203CP41759 2. basis whenever you wish to have it become effective although as you point out it is a source of some disappointment and concern to me I do not know what you have in mind as a commission or financial arrangement for NAAC for next year although when I was in London recently there was discussion about a 3.5 commission for NAAC on all purchases and contract sales in North America I will not trouble you now with the various reasons why I think the relationships we have with these companies are entirely different than those that existed 1955 However in thinking of any basis of compensation for NAAC for its activities as sales agency or distributor for the Mines it is quite important to keep in mind that NAAC either by commission or by price markup or both must achieve enough return to maintain increasingly costly services that our fibre customers require For example the customers listed above have each at various times insisted that they no longer wanted to purchase CAPE000994 Dr. Dr. R. Gaze - age 2 - July 8 1969 ECTRONIALY FILED directly from the Mines and have to pay for the material at the time of shipment from Africa Further they have all objected to the annoyances - 2023 of having to do their own importing of the material through customs house brokers and the troublesome details of filing claims for the Oct shortages that regularly occur on the turn of the bags from the vessels and they do not want to worry about marine insurance etc. Instead they prefer to have NAAC look after these details leaving to us 18 12:13 the transit financing costa insurance problems the handling of the details in the shortages and the claims at each of the ports etc. , etc. PM I have held the opinion that we must provide these services wherever the - customer finds it troublesome to perform them for himself -- we must RICHLAND in fact make it as easy as possible for the customer to deal with us This is the one great advantage we have over Central Kuruman and Turners in their efforts to sell Blue and Amosite in this market - These competitive companies lacking a U.S. distributor can only quote COM ON f U.S. port which is relatively unattractive to most of our customers who have become accustomed to the services we supply It should be obvious however that these services cannot be covered with a 2.5 commission and for the five companies listed above NAAC has no extra PLEAS markup with which to provide such services It is a fact that the Mines also enjoy a higher price from these companies for the grades that they - buy than I believe any other customer This is because NAAC has r regularly encouraged increases in the prices to these customers thus creating the overprice am not sure you are aware of all the services that we perform for our 203CP41759 customers but these are fairly extensive and costly Whatever the financial arrangements between the Mines and NAAC that you may plan for the future I hope you will keep in mind that we have an increasing burden here in the cost of doing business in increased services and the administration of these services with best regards Sincerely RECryor CAPE000995