Document n3mOaMBdKKEaGaEQn48nLQ9a

I PLAINTIFF'S EXHIBIT GEORGIA PACIFIC GYPSUM RESEARCH JANUARY TO JULY 1971 SGP 0015412 TABLE OF CONTENTS SUMMARY................................................................................................................................... Analysis of Sales & Profits from New Products ..................................... 1-3 3 NEW PRODUCT SECTION Mastic Adhesives . .................................................................................................. Gypsum Firedoor Filler................................. ....................................................... Pre-Dec Wallboard ...................................... .... .......................................... Improvement of the Existing Product ........................................................ Expanding the Product Line ........................................................................... Exterior Wallboard ................................................................................................... 4 4-5 6 6 6 7-11 IMPROVED PRODUCTS SECTION Gypsum Textures ............................................................................................................ 12 Gypsum Joint Compounds ......................................................................................... 13 Ram Press Process Plaster .................................................................................... 13-15 Radiant Heat Panels........................................................................................................ 15 SALES SERVICE SECTION Shaft Wall System.............................................................................................................16-20 Fire Testing..................................................................................................................16 Wind Load Testing........................................................................................................ 17 Marketing........................................................................................................................... 17-20 Flamespread Rating for Etemawall....................................................................... 20-22 Monolithic Etemawall................................................................................................... 22 Fast Method of Joint Finishing ...................................................................... 22-23 SGP 0015413 SALES SERVICE SECTION (conti) Low-Cost Vinyl Covered Wallboard ................................................................. 23 Pilot Fire Testing........................................................................................................23 U.L. Flamespread Label ......................................................................................... 23 PATENTS & LICENSING SECTION Round Edge Wallboard................................................................................................... 24 Improved Firestop ....................................................................................................... 24 Shaft Wall System.............................................................................................................24 Gypsum Joint System .................................................................................................. 24 INDUSTRY SECTION ASTM.........................................................................................................................................25 Gypsum Association .................................................................................................. 25 SGP 0015414 SUMMARY New products developed through Gypsum Research contributed $655,594 gross profit to the Division in the first half year. The G-P elevator shaft liner system and Pre-Dec wallboard for mobile homes are two new developments which proved to be good profit makers. We have leap-frogged our competition in providing one of the most economical methods for enclosing elevator shafts in high rise buildings. Jobs using our system are in progress in Portland and Chicago, and Sales tells us that others will follow. In addition to the substantial volume of gypsum in the sTiaft wall, it provides an inside track to sell other products for the interior partitions in these buildings. Pre-Dec has been responsible for $145,110 profit in the first half of 1971. This is an excellent example of our ability to sell a low cost commodity for which there is an existing market. The manufacture of Pre-Dec is being considered at other plant locations in addition to Acme. Our entry into the panel and stud adhesive business has met with some problems of acceptance by users of solvent type products. This can be a profitable business for us, so an all-out effort is being made to improve the market acceptance. Some brand-new developments are just beginning which should keep the momentum going. At the suggestion of Alex McCaskill and using the commodity approach, we are investigating the possibility of manufacturing a low cost vinyl covered wallboard. The objective is to increase the sales and profits from our captial investment in laminating equipment. Another recent development and a potential new outlet for gypsum board is a so called "exterior gypsum wallboard." This product serves as a base for the application of an acrylic coating on the outside of a building. We are working with KellyMoore, who supplies the acrylic coating, to evaluate this new exterior finish. Pictures of the gypsum board/acrylic texture finish are shown on pages 8, 9, and 10. Under product improvements, a new line of wall and ceiling textures is being introduced. The new textures have been well received in the market and the raw material cost is substantially lower. The slow transition from casein/limestone to vinyl/gypsum joint compounds at Acme is about 807o complete. Now instead of facing a decision of whether to continue manufacturing joint system at Acme, a larger and more efficient operation is being planned. The royalty return from Firestop licensing has grown to about $250,000 annually. The increase in royalties has been due to our continued Page 1 SGP 0015415 development of Firestop products, management's enforcement of the patent, and stricter building code requirements for fire protection. The basic Firestop patent expires in 1973, but we have another patent, which will issue shortly and sustain a significant portion of our Firestop royalty potential for another seventeen years. We have licensed The Celotex Corporation under our shaft wall patent application and this will add to our future royalty income. The sales of G-P Fire stop products has continued to grow, and at a faster rate than our competition, so the royalites make additional profit on the sales of our competitors. As we have seen, research is important to develop new and more profitable outlets for gypsum products. Equally important is the timing of the development and the provision of facilities to manu facture the product. In most instances, our timing has been good, but in some cases it could have been better. The shaft wall, PreDec, and gypsum joint compound projects all appear to have been well timed. The improved texture line is several years late and it will take a big sales effort to take full advantage of the work that has been done. In most cases we should be researching the product years before the market develops - so that when the demand occurs, the product has been fully tested and is ready. It would help if we had more market information than is currently available. Such knowledge would make our efforts more effective and improve our timing to maximize the profits from new developments. Page 2 SGP 0015416 ANALYSIS OF SALES & PROFITS FROM NEW PRODUCTS January Through June 1971 Unit MSF Tons MSF MSF MSF MSF MSF MSF M Lin. Ft. M Lin. Ft. M Lin. Ft. Pails Cartons Tons Tubes Tubes Tons Tons Tons Tons Tons Each Pounds Product Sales Volume Denscote Base (All) 8,208.4 Denscote Plaster (All) 1,447.7 Tile Backer Board (All) 6,203.1 1/4" Sound Deadening Board 3,150.8 Radiant Heat Panels (All) 124.4 Pre Dec Wallboard 8,381.8 Pre Dec Ceiling Tile 2.1 Shaft Liner Panels 108.6 "T"-Spline 43.7 "L"-Runner 10.0 "J"-Channel 9.0 Ready Mix 515,413.4 Ready Mix 2,572.1 Triple Duty 2,198.2 Panel Adhesive Drywall Adhesive 89,724.0 6,924.0 Bestex A (All Plants) 675.5 Bestex B (All Plants) 48.2 Bestex C (All Plants) 278.0 Bestex D (All Plants) 167.1 Speedset 172.5 Thermostats 218.0 Insulated Nails 204.1 TOTAL: List Sales Amount $ 297,424 82,949 411,880 101,658 49,083 476,707 184 19,597 6,898 930 1,606 1,599,292 ' 7,028 289,976 32,135 5,055 89,384 7,969 43,977 25,677 26,749 1,318 1,571 $3,579,047 Gross Profit Amount $ 26,892 15,417 153,925 21,696 ( 7,759) 145,110 53 1,521 1,367 132 80 226,006 62 54,979 11,703 1,242 642 374 351 ( 885) 2,035 362 289 $655,594 Page 3 SGP 0015417 IMPROVED PRODUCTS SECTION SGP 0015418 Gypsum Textures Our objective in developing a new line of textures is a) to improve the market acceptance to increase volume, and b) to reduce the raw material cost to improve the profitability. Our only hope to accomplish the cost reduction was to be able to use gypsum instead of limestone as the filler and vinyl or starch instead of casein as the binder. This fit into the over-all program at Acme to eliminate the expensive casein/limestone formulas. We also manufacture texture at Akron where the gypsum is too dark in color so it was necessary to work with limestone here. The first approach taken was to find a pigment system which would provide the optimum hiding and coverage. Once this was done, we searched for the right combination of the binders, fillers, water retention agents, and aggregates. The initial formula consisted of a vinyl binder. This texture was tested in Memphis and performed well enough that more than a thousand bags were sold. During the field testing, it was found that there was room for even more improve ment. The texture required high pressure to break up easily during application and dried out fast making cleanup rather difficult. The textures were re-formulated and a combination of a starch and a gum were used in place of the vinyl binder. This time the texture received even better acceptance in the difficult Memphis market. Trials in the Florida and Denver markets were also favorable and in late June we ceased manufacturing the old casein/limestone textures at Acme, replacing them with the gypsum/starch formulas. In addition to the better acceptance, the raw material cost of the aggretated texture was reduced from $1.85 to $1.05 per 40 lb. bag. The cost of the non-aggregated texture was reduced from $1.07 to $.71 per 25 lb. bag. This takes us from a loss position to a profit able one providing even more incentive to increase texture sales. Concurrent with the gypsum base textures at Acme, limestone textures for Akron were developed with the same pigment and adhesive systems. These textures are slated to be field tested late this summer. The raw material cost reductions will not be as substantial as those realized at Acme, but they will still be significant. All the textures are color matched so that any cross shipments from Acme or Akron should not cause any problem. The finishing touch for a complete texture system is to have an expanded polystyrene aggregate. Engineering is working on the layout of equipment to expand and shred this aggregate. Page 12 SGP 0015419 Gypsum Joint Compounds Our efforts to develop a satisfactory All Purpose with a gypsura/vinyl formula at Acme met with considerable resistance in the field. While there was some acceptance, certain markets, notably Memphis and Oklahoma City, would not use the new product. In the meantime, we were losing money on every bag of limestone/casein All Purpose that was sold. The Ready Mix has been successfully converted to a gypsum formula and we have been furnishing it for over a year. Also, the Central Mix had gotten acceptance, but the All Purpose proved to be a different matter. After much re-formulating and re-testing, all of which exasperated everyone involved, a formula was found which has satisfied users in Memphis and Oklahoma City. The same formula has been tested as a Triple Duty (in lieu of the limestone Triple Duty) and again favorable reports have been received. Through persistence, a difficult problem of acceptance was solved. The only remaining casein product to be eliminated is Topping and we are diligently working to develop a suitable gypsum/vinyl sub stitute. When accomplished, this will complete the transition at Acme restoring the profitability to an operation that had become a losing proposition. Ram Press Process Plaster George Fowler, our industrial engineer from Blue Rapids, proposed that we go all out to make our Ram process plaster competitive to U.S.G. It was suggested that we do this by working with the people who manufacture the Ram pottery presses. It was decided to proceed with at least one visit to Ram to see if we were making progress. Before doing this, quite a lot of work was done at Blue Rapids to develop a formula which would be as close to U.S.G's Ceramical as possible. A formula consisting of equal amounts of Densite and Denscal, white Portland cement, gum arabic, and the optimum combination of set control agents was sent to Ram Inc. to be evaluated in comparison with Ceramical. The photographs illustrate the Ram pottery making process. Page 13 SGP 0015420 SALES SERVICE SECTION SGP 0015421 All of these factors will be taken into consideration in the upcoming series of flamespread tests at Underwriters' Laboratories in Santa Clara. We will test Stauffer and Columbus white stipple 6 mil vinyl. We purchase most of our vinyl from Columbus but the Stauffer vinyl performs better. We will use the National Casein PCVE adhesive which we are using and a formulated adhesive which performs well on the machine, better in the flamespread test, and is more economical. If possible, two different amounts of each adhesive will be tried. We will use 65 lb. paper inasmuch as it was determined that the lighter the paper the better. The U.L. series of flamespread tests should be completed in August. Monolithic Eternawall At the request of Sales, a method of making a monolithic or smooth joint for vinyl covered wallboard was developed. This was accomp lished by forming a round edge board with a 1" wide .015" deep taper and keeping the vinyl loose (unlaminated) 4" back from the edges of the board. The recommended method of finishing the joints is: a) Apply two coats of 30 minute Speed Set to the joint filling the round edge and taper, b) adhere the flaps in wallpaper fashion with a suitable vinyl wallpaper paste. These tests were conducted on 25 oz. fabric back vinyl with a color pattern. Sales subsequently found it desirable to purchase and market a 12 oz. white vinyl in order to meet competition. This will give a less satisfactory result than the vinyl originally tested, but it may be acceptable. Fast Method of Joint Finishing Sales advised that competition had a method of completely finishing joints in 30 minutes. We were never able to substantiate this when we contacted some of the people who were supposedly using this method. National Gypsum has a system called "Thermoweld" which has limited acceptance. U.S.G. has no system but their Durabond setting type products are the most acceptable in the market. We have two problems: One is to improve the working properties of Speed Get, and the second is to develop a faster method of finishing joints, but not necessarily 30 minutes. In fact it would be better if the total time were closer to one hour. George Green has developed a setting type product that has a relatively long working life (45 minutes) but hydrates quickly (15 minutes). The working life can be extended without significantly changing the time of setting. Normally to achieve a 45 minute work ing life would require a set of 1^ to 2 hours because of the stiffen ing that precedes the set. The stiffening is caused by the early formation of needle-like crystals. This stiffening has been sub stantially eliminated by a crystal habit modifier which makes rectangular rather than needle shape crystals. This discovery Page 22 SGP 0015422 paves the way for a product which will give maximum working time for a quick set material. The next step is to incorporate good application characteristics. We will evaluate a method of finish ing much like we use for the Dens-Cote system. In other words, embed glass fiber tape, trowel over the tape, and double back to . trowel the joint smooth. If this were successful, it would be a way of finishing the joints in an hour - and essentially in one application. Low-Cost Vinyl Covered Wallboard We are investigating low-cost predecorated wallboard laminated with thin vinyl or other inexpensive facing. The objective is to generate more sales for laminated products to fully utilize our laminating equipment. The net result should be lower costs and, therefore, greater sales and profits. Our approach has been a) to use lower cost vinyl or other decorative films (We have ordered samples of Elm Coated Fabric's 2 mil vinyl, Stauffer's 2 mil vinyl, Permaneer's woodgrain vinyl, and DuPont's Tynec non-woven to evaluate.) ; b) to reduce the adhesive cost (An adhesive was formulated that is over lOq/lb. less than the adhesive we are currently buying and trials at Fort Dodge and Wilmington have been favorable); c) to increase the operating speed (The new adhesive with its higher tack is permitting speeds of 60-80 ft./min. as compared to standard of about 40-50 ft./min. It may require some additional handling equipment but a 50% increase in speed will help reduce our manufacturing costs.) Pilot Fire Testing During the past 5 months, pilot fire tests have been conducted on a corrugated steel/gypsum wallboard roofdeck, a wall with paneling on one side and 5/8" Firestop on the other, and two back-to-back wood stud walls. These tests were to provide information requested by Sales. U.L. Flamespread Label We received approval from U.L. to use regular wallboard instead of Firestop to label Pre-Dec and Etemawall. This saves the cost of the more expensive Firestop formula as well as the cost of the fire resistance label. Now only the flamespread label is required. Page 23 SGP 0015423 Round Edge Wallboard Our patent claims have been rejected by the examiner. We plan to rewrite the claims and establish some limits as to the curvature in order to overcome the examiner's objection. We are also prepar ing a method to accurately measure the degree of roundness. All of this is regarded as important in view of the various round and bevel edges that are being marketed to reduce ridging. Improved Fires top Our patent will issue shortly. Our current Firestop patent expires in two years so this will allow us to continue to license some of the Firestop line for another 17 years. As soon as the patent issues, we will advise our licensees and send them a new agreement similar to the old one with a royalty schedule as follows: $.65/M for 1", $.55/M for 5/8", $.45/M for 1/2", and $.35/M for 3/8" Firestop. Shaft Wall System Our patent application was filed on March 22 under Serial No. 126,823. We have a license agreement with The Celotex Corporation under this pending patent application at a royalty rate of $5/M. Gypsum Joint System An action has been received on this patent application with the usual rejection of all claims. We will have to be more definitive in our description of the adhesive used with the gypsum filler. This is considered an important patent in view of the ever increas ing costs of manufacturing joint system with limestone and casein. Revisions will be pursued through Synnestvedt and Lechner so we can have the patent allowed. Page 24 SGP 0015424