Document rBm95g19YynMXZda0Xg94vk5J

B2SC Cumming Paton June 9, 1972 Monthly Report May 1972 T. L. GOSSAQE B2SC B2SC B2SC B2SF B2SF B2SF bcc J. J. Roder D. E. Roush P. a. Bonignus F. H. Langenfeld J. H. Da vldBon R. E. Hatton a. f. Fague May Sales Budget Estimated YTD Budget Estimated Aviation Dielectrics* Industrial Process PCB/PCT $148 M 556 189 385 0 12718 $227 M 6l4 268 489 283 T88T $588 M 2636 509 1887 1111 573T 2867H 508 2053 2712 muu "Excluding PCT Pydrauls 0 included under PCB/PCT. Financial Performance AprSl BaleB were $603M over budget or $320M over when unbud geted PCB/PCT sales are subtracted. All areas were well over budget. We are running into price pressure on our new Pydrauls from Stauffer and Houghton. Problem Areas 1. We seem unable to oommand the anticipated premiums for our straight P.E, Pydrauls on the basis of technical superiority. Difficulties also exist in product cost due to the processing necessary to pass emulsion tests and in getting free pheno11o levels that are down to the levels of competition. The free phenolic situation is further complicated by test method difficulties, solubilities in water and oil and new versus used fluids. Nevertheless it is a troublesome prob lem in today's pollution-conscious environment. 2. Competition to Thermlnol 66 in off-shore platforms continues strong with Coastal Chemloal's Chemtherm 65 entering the fray alongside Dowtherm Q. 3. A Mnew" producer of 99.7# biphenyl appeared in the dye car rier market at allegedly lower prices. However, latest information Indicates this could be Dow upgrading their own by-product streams and the aloud could turn out to have a silver lining for MICC. plaintiffs EXHIBIT TRAN 002593 WATER PCB-SD0000076773 4. pydraul 312 failed Bureau of Mines Schedule 30 fire tests. This Is unexplainable and we are now doing test work to prepare for discussions with the Bureau. Based on our test work and fluids now approved under Schedule 30j we will probably demand retesting at no charge. Growth & Development Programs 1. In heat transfer, two candidates for a -65? pour, point fluid have been Identified and look good on our testing. A fluid with an A.I.T. 100F above Therminol 66 has been identified which would be attractive from both a market Introduction and a manufacturing position. More work is needed before these candidates can be taken to the field. 2. Military qualification procedures on Turblnol 1223 to MIL-H-19^57B are progressing as fast as government red tape allows. Although we are not qualified, we bid on about 50,000 gallons for delivery in August. Stauffer received the contract as lowest rcsoonsive bidder (our prices were 2-Ay(/gallon higher). was declared'hon- responsive" since they asked for later delivery dates and Houghton withdrew their bid. 3. Formulations for our all phosphate ester Turbinols are nearly firm and calls will be made over the next three months to major OEM's to obtain evaluations, field tests, and approvals (or at least "no objection" statements). The Sky lube 4 50 test program at received a large boost forward this month following the inspection of two flight test engines. One engine had 5^00 flight test hours while the other had 6000 hours. Both were In excellent condi tion as rated by . This should complete our test obligation to to qualify for approval of Skylube 450 in JT3D and JT4 engines. As a note of Interest, an engine flown on the advanced Mobil Type II lubricant was also Inspected. It was heavily coated with coke and was regarded as a test failure by . Everyone now feels Mobil must reformulate to compete. Business Outlook - Good We should meet budget in June. The outlook for dielectrics looks brighter now that the PCB Task-Force has issued a report which essentially vindicates Monsanto's actions. Ex cellent progress has been made in getting signed warning letters from overseas dielectric customers. tran 002594 SUB WATER PCB-SD0000076774 -3 Aviation 1. placed an order with us for 1,000 gallons of Skydrol 500C, They are shifting to 500C based on the product Bucces's at .' 2. A two year Skydrol contract was extended at 3. A Skydrol contract was submitted to for their next two year requirements. 4. have completed preliminary test work on 2300V/ and Hyjet III and see little or no advantage to using these products. They now are studying the possibilities of changing their fleet to Skydrol LD or 500C. 5. accepted our proposal to supply Coolanol 25 ($25,000 over next 12 months). This 1b the first time in several years we have won a competitive bid over Chevron Flo Cool l8o. We expect requests for bids from other locations in the near future. 6. The Coolanol 20 quality problem (flocculent solids) must be resolved to maintain the busi ness in their current radar system. They have several new systems in design and desire to use Coolanol 20 if the fluid performs well In their current system. 7. Texas Eastern Transmission have-decided to use Stauffer Fyrquel 150 and 220 to replace Turblnol 153 (PCB contain ing) in the first two turbines of their changeover program. All Indications are that Turbinol 1122 or 1223 will be used in later changeovers. Close contact with this customer and , the turbine builders, will be needed to insure this occurs. Dielectrics 1. PCB Task-Force issued a report confirming essential nature of PCBs in dielectrics. Report vindicates actions taken by M.I.C.C. ' 2. Presentation given to PCB Task Force on May 15 on biodegra dation of PCB homologs and steps taken by MICC to change dielectric product line to move degradable PCBs well re ceived. ' TRMt 2595 WATER PCB-SD0000076775 3, Now that Hold Harmless agreements signed MOCAN expects to be on budget by year-end as transformer manufacturers al3 have long term askarel transformer contract orders. J). PCD situation explained to Mexican customers, Mexican IEEE and government officials. We were first PCB producer to do so and results extremely favorable. Signed warning letters received and we are proceeding to implement price increases. At long last bulk shipments to Mexico seem to be getting off dead-center thanks to efforts by Prank Camargo, Paul Benignus and Lorenzo Ysasi. 5. ANSI C-107 is in the final draft stages of guidelines for handling PCBs in capacitors and transformers to minimize environmental contamination. Industrial Fluids 1. Outstanding job being done in getting A series Pydraul domestic .Inventories down to essentially zero at least ten days before June 30 cut-off date. 2. - Extremely low bids by competitors ori the 1972-73 contract have forced us to match competitive prices much lower than we have bid in the past on the Pydraul business. We will know shortly whether we keep only a token portion of our past business or whether we will keep all of our past business. Our change to straight PE fluids (like Houghton and Stauffer) has opened up the entire $350-^50M Alcoa business to intense competition. We have bid on the entire business (some of which was not open to us before) but odds are considered low that we will gain over . 30^ (&175-225M) - approximately our present volume. 3. The following major accounts are now in the fold with first orders for our new Pydraul products: Pydraul 312C $60Mpotential Pydraul 50E $50M Pydraul 50E $70M k. has committed to conversif?a to Pydraul 50E from Pydraul 312A. They will start a reclamation program (internal) which will reduce their purchases by an esti mated 50$. Dollar sales loss will be 20-25/6, however, due to conversion to a higher cost Pydraul. TRAN 002596 WATER PCB-SD0000076776 -5- 5. The following accounts have been lost: $28M Fyrquel 220 $15M Fyrquel 150 price while claimed lower phenolic content In Fyrquel was reason for switch. 6. A tank truck order at was lost to Stauffer's low cost Fyrtek 290 on price arter we had obtained the first two tank truck orders with Pydraul 230C. Process Fluids Carbonless Paper Solvents 1. First 5000 gallon T/T shipment Santosol 100 to , En capsulation has been carried out without problems. 2. rejected MCS 1296 but 1297 seems OK. 3. has agreed to terms of contract on Santosol 300 through 1973. This will also lead to MCL/Reed contract in UK. li. bought 27M lb. MIPB and 27M lb. Santosol 300. Still not clear what their plans are for the future. Biphenyl 1. Dow apparently has decided to upgrade their HDA biphenyl streams. This could cut us off as supplier of biphenyl for Dowtherm but could help us a great deal in the dye- carrier market by reducing sources for , etc. The net result could be much stronger pricing in dye carriers. 2. Excellent month at (2*J9M lb.). , came in for 3 T/Ts in spite or rumored lower price from competitor (Dow?). took 35M lb. and Dow has placed 2 T/c orders for June. Dow is 600M lb. behind budget YTD. qqZ^1 2 3 WATER PCB-SD0000076777 6- - Heafc Transfer 1. Sales were Btrong at $76m over budget. 2. Conversions to T-55/T-66 in May were worth $55M ("26m gallons final fill). ' 3. Strong competition from both Dowtherm G and Coastal Chemicals Chemtherm 65 in the offshore industry. It is reported that Dowtherm G has replaced T-66 in the speci fication for (6000-8000 gals.) and at in two systems totaling 3000-^000 gals. Chemtherm op is apparently operating in one platform and has just been ordered for a new PCB conversion (2500 gals.). Chemtherm 65 offers low toxicity, high AIT, and offshore delivery to platform is available. Jj. New business worth $21M received including (3000 gallons T-55) (2200 gallons T-55), (2300 gallons T-66). PCD/PCT 1. Through May, 172 customers have committed to convert to T-55 or T-66 with lost customers totalling 32. 2. Announcement of termination of free incineration July 1 has gelled conversion dates at many accountB. Good con version business now expected through August, Task force should be reduced to Paul Gann only on June 30.3 3. Major conversion success in May was 20,000 gallon MCS 681/ T-55 combined flush/refill Bale to who earlier had turned away from Monsanto. Cumming Paton CB WATER PCB-SD0000076778