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1 cc: W. E. Alexander R. T. Clark, Springfield S. L. Hunter H. M. Keating C.' T. Massey I,.. A. Schroeder, Spgfld. J. C. Wrobleski Central Files MONSANTO CHEMICAL COMPANY TEXAS CITY, TEXAS July 29, 1960 To: A. F. Pond At: Texas City Subject: Evaluation of Ethyl Corporation's Vinyl Monomer (VCM) Plant at Baton Rouge We have evaluated Ethyl Corporation's plant for vinyl chloride monomer (VCM) at Baton Rouge. The capital was estimated for_the plant as built in 1958, and the manufacturing costs were made for 130 M lbs/yr of VCM at prices for 1963. This will give you figures_to compare with the evaluation of our Texas City plant as expanded to 200 M lbs/yr. Ethyl makes VCM by the ethylene route, using a process identical to our process at Texas City; but all of the HC1 made from 1,2 dichloroethane cracking is used_in their ethyl chloride plants. Reports sayjheir plant, -designed for 90 M lbs/yr of VCM, has a capacity near 130 M_ lbs/yr. Their major equipment, we believe, would bottleneck at about 160 M lbs/yr. The manufacturing capital of their plant is estimated at $6.8 M ( 30%). The manufacturing cost was_$6.438/100 lbs of VCM. Comparative figures for Monsanto's plant at 200 M lbs/yr of VCM were $10.1 Mof capital and $7,244/100 lbs of VCM for manufacturing cost. Table I shows a summary of comparative cost. For the evaluation we assumed: (1) That the asset value of the plant will be the same in 1963 as it was in 1958. Capital was figured on manufacturing facilities only -- battery limits and product storage. CBY 1020417 RSV0031294 Page 2. (2) That the plant's capacity_will still be at 130 M lbs/yr of VCM. If the capacity were near 160 M lbs/yr, the unit price would change little. However, for any investment returns you may work up for comparison the difference could be sizable. (3) That their yields and conversion co^s were the same as for our plant. Inventory standards were used for yields, and the predicted prices for 1963 were used for conversion. Yields were: EDC from ethylene, 94.0%; EDC from chlorine, 95.0%; VCM from EDC, 95.0%; HC1 from EDC, 96.0% . (4) That their raw material and by-product costs would be the same as we predicted for 1963 and used in the evaluation of our plant. Prices were: ethylene, 5.2/lb; chlorine, 2.6/lb;HCl credit, 2.6^/lb. (5) That all HC1 was credited to the VCM plant at 2.6^/lb. A breakdown of the manufacturing cost for.* EDC and VCM is shown in Tables II and HI, respectively. hi L. B. Bullock CBY 1020418 RSV0031295 TABLE I Estimated Cost Comparison for 1963 Capacity, M lbs/yr EDC, Unit Cost $/100 lbs VCM, Unit Cost $/100 lbs Capital, Total For EDC For VCM Monsanto Texas City 200 3.822 7.244 $10,054,536 2,567,271 7,487,265 Ethyl Corp. Baton Rouge 130 3.816 6.438 $ 6,800,000 1.700.000 5.100.000 7-29-60 [CBY 1020418.01 RSV0031296