Document rxxY4wEqnqpek7oZBgddBp5xG

2- - Our CPC blue product line is competitive, with several strong specialty products for paints, inks and plastics. The CPC green line is deficient to competition and contains no specialty products. Our other organic products (Dalamar and "Watchung") are generally equal in quality to similar competitive products but our product line as a whole is weakened by not having the lead replacement pigments for automotives and plastics being offered by Hoechst, Bayer, BASF and Ciba-Geigy. Process Du Pont has a strong process position in guinacridones and inorganics. We are the low cost producer of quinacridone due to large-scale operation and backward integration to a Petrochemical Department by-product. Our CPC processes are not competitive due to high fixed costs and under-utilization of capacity. Our azo processes are not unique although we do have a basic raw material position in our "Watchung'' line which impacts favorably on profitability. B&D Programs R&D programs on quinacridone are focused On new and improved product development and process cost reduction to maintain our competitive position as product patents expire and automotive end use technology changes, CPC programs will emphasize cost reduction to improve the cash flow and profitability of the business, Inorganic programs will be focused on reduction of invest ment needed to comply with environmental regulations and development of new product forms and packages that minimize dust exposure for customers. Our other organics program will emphasize development of new yellow and orange pigments (in conjunction with CR&DD) as lead chromate replacements for the plastics and automotive markets. Several programs, cutting across product lines, will be initiated to develop higher value-in-use products, such as high solids dispersions and resin extended pigments for plastics, automotives and trade sales industries. P. A. Wriede :mpn November 26, 1980 JV 26954 Business Du Pont's Colored Pigments business is divided into four distinct product categories; quinacridone (QA), copper phthalocyanines (CPC), inorganics and other organics. Du Pont currently has a strong business position in quinacridones and Krolor'' ' t a specialty inorganic, but copper phthalocyanine, especially CPC green, is in a poor cost condition, Du Pont is low cost producer of conventional inorganic pigments because of a large-scale, continuous manufacturing unit, but the future of the inorganics business is clouded by environmental regula tions on lead dust and chromium effluent which affect our ability to manufacture and our customers' ability to use the product. The Colored Pigments business plan calls for optimizing the cash flow of the business and improving its overall profitability. Strategies to accomplish these objectives include: Reducing CPC blue manufacturing costs while marketing a larger portion of the more profitable specialty blue products * withdrawing from the inorganics business (except Krolor (R) by 1984 if investment required to meet regulatory requirements cannot be reduced to acceptable levels * maintaining our competitive position in quinacridone and # developing new products as lead chromate replacements for automotives and plastics. Products Du Pont has a broad line of durable quinacridones for the automotive industry that is unmatched by our major competitors, Sun, Bayer and Hoechst. Some of our solid solution patents expire in 1981 but important gold products will continue to be protected through the late 1980's. Our inorganics are generally equal to competition in the ink and paint markets, but our proprietary silica encapsulated Krolor' ' pigments are superior products for high temperature plastics applications. Some foreign competitors are marketing similar products which we feel infringe our patents. DUP050146070