Document yrKVqLZ7O4Q72O7N9zOXe7M6d
REQUEST AND AUTHORITY FOR CAPITAL
EXPENDITURES / RETIREMENTS
DIVISION OR COMPANY
Organic Chemical Division
LOCATION
4*0. CONTROL POINT
Chicago Plant
JOB TITLE
sm_____
REPORTING CLASSIFICATION
DATE APPROVED
D-3
1SUMMARY OF AMOUNTS
PC 3007 ftl
DESCRIPTION
LOCAL CURRENCY
U.S. OOLLARS
ESTIMATED PROJECT COST
"207,137
DISMANTLEMENT EXPENSE
TT000
TRANSFER EQUIPMENT
216.137
GROSS AMOUNT FOR APPROVAL
Airborne Lead Dust Abatement
LESS TRANSFER EQUIPMENT LESS SALVAGE OR TRADE-IN ALLOW.
NET CASH REQUIRED (o o f .302?)
216.137
RETIREMENT DATA
AMOUNT
COST DISMANTLEMENT
34,850 9 .000
LESS SALVAGE
ECONOMIC JUSTIFICATION
6*YEAR AV6.
NET SALES
4.181.000
NET SAVINGS BEFORE TAXES
587.000
NET AFTER TAXES
aef. 000
% ROI (ON TOTAL INVEST.)
9.9?'
REV.
2
3 4
REVISION4 DETAIL <c"oss AMTS.)
OATE
AMOUNT
CUM. AUTHORIZATION
sg.nnn
778 T 37
TOTAL- CHARGE RESERVE
43.850
PAYOUT YRS.
.7 5
6
DESCRIPTION AND REASONS REQUIRES
OOF- 902T RCV.
DETAIL SHEET
SHEBT MO.
JOB OROER NO.
COMPANY
American Cyanamid Company
ITEM OR
CODE NO.
t
DESCRIPTION
701 Ventilation Hood and Ductwork Bldg. 19
704 Ventilation Hood and Ductwork Bldg. 20
705 Dust Collector Bldg. 20
706 Ventilation Hood and Ductwork Bldg. 24
708 Dust Collector Renovation Bldg. 19
710 Vac-u-max pneumatic Litharge Charging Bldg. 20
712 Central Vacuum System Bldg. 20
714 Central Vacuum System Bldg. 24
750 Stack Emission Testing
760 Plant Clean up
898 [llinois Sales & Use Tax 890 Dismantlement
LOCATION
Chicago,
DATE
August 4,
Illinois
1977
EQUIPMENT OR
MATERIAL*
LABOR
ENG. MECH.
SVC.
TOTAL
22,042. 44,083.
66,125.
16,675. 8,325.
6,057.
1,500.
5,237. 10,491.
15,237. 20,272.
7,895. 2,500.
7,817. 7,542.
7,817. 7,542.
13,360. 37,420.
20,000. 102,137. 1 59,675.
4,325.
9,000. 106,462 1 68,675.
25,000. 7.557
15,728.
35,509. '
10,395. .
15,359. 15,359. 50,780. 20,000. 4 61,812.
4,325. 9,000. 4 75,137.
Dismantlement Ventilation Hood and Ductwork Elevator and Screw Conveyor
Acg. Date Acg. Cost Disposit:
6/71 32,050. Scrap
6/71
2,800. 34,850.
Scrap
N14`168.01
CYWI 24-0006861
CYAJVAMID
Additional Funds Recuest
Approval is requested for a $59,000 supplement to the $216,000 approved for OC-3007, for reducing airborne lead dust concentration at the Chicago Plant.
There are three major causes of the overrun.
Item 750 Stack Emission Testing (EPA)
Original estimate - $24,000
Updated estimate - $50,780
Increase
- $26,780
Neither the outside contractor engaged to sample the stack emissions nor the Chicago Plant personnel foresaw the complexity of the testing, roof and stack modifications required by EPA to compile acceptable data.
Item 712 & 714 Central Vacuum System (OSHA) Bldgs. 20 & 24 - Cowles - Sulfate Areas
Original estimate - $19,484
Updated estimate - $30,718
Increase
- $11,234
The purchase price escalated $1013 but the installation costs exceeded the estimate by $10,221. Although estimates of installation costs were obtained from vendors and the costs of similar installations at other Cyanamid locations, these proved to be too low when compared with the actual installation costs.
Item 708 Dust Collector Renovation (OSHA) Bldg. 19, Litharge Building
Original estimate - $15,220
Updated estimate - $35,509
Increase
- $20,289
The four building 19 dust collectors have been in service 35 to 44 years. As the renovation progressed, it became necessary to upgrade the dust collectors to the original
condition.
N14468.02
CYWI 24--0006S62
ECONOMIC JUSTIFICATION
OC 3007 R1
Net Savings Before Taxes (OC 3007) Less: Add P.P. & E R1 $^T,000 @ 7 1/4%
59
Net Savings After Taxes (OC 3007) Less: 50% Addition P. P. & E.
fCuS--^ C
Six Year Avg $591,000 #,000 $58J,000
$299,000 a, 000
$29Sree0
ROI Payout
9. TA .7 years
N14468.03
CYWX 24-0006S63
/f^EQilEST AND AUTHORITY FOR CAPITAL u t o u t ih s ewMirtwrioH io *h *mv w
' EXPENDltURES/RETIREMENTS__________
D-3 .
1 8/12/76
ij o o q c * mo . | QC-3007
DIVISION OM COMMAMV
Organic Chemical Division
LOCATION
J.O. CONTROL AOINT
r.hiceo Plant
JOS TITLE
097
Airborne M t Lead Dust Abatement
SUMMARY OF AMOUNTS
OC9CRIPTI0N
LOCAL CUftftCNCY
ESTIMATED PROJECT COST
DISMANTLEMENT EXPENSE
TRANSFER EQUIPMENT GROSS AMOUNT FOR APPROVAL
LESS TRANSFER EQUIPMENT LESS SALVAGE OR TRAOE-IN ALLOW.
NET CASH REQUIRES) Is o f -3027)
U.*. OOLLAAS
207,137. 9,000.
2X5,137 .*
2l. 137.1
RETIREMENT DATA
AMOUNT
COST
3L.850.
DISMANTLEMENT
q.ooo.
LESS SALVAGE
TOTAL* CHANGE RESERVE 43,850.
ECONOMIC JUSTIFICATION
a.VCAft AVO.
*cv.
NET SALES
4,itfryouTT 1
NET SAVINGS BEFORE TAXES
591,000 z
NET AFTER TAXES
299,000 3
% ROi (ON TOTAL INVEST.} PAYOUT YRS.
9.6% 0.7
4
s 6
REVISION DETAIL
OATC
AMOUNT
a mt s .) CUM. AUTMOmZATIOM
' -' -
OC3CHI.TIO* AMO MCAONS *CQO>fttO
See Attached
CYWX 24-0006864
*
B3 P&C Dept. -
orriCE
TO: Mr. B. H. Loper
LOCATION: .Bound Brook
Julv 28._ 19.76
OATE
c o py t o :
FROM: Mr. H. H. Hofmaler
SUBJECT: REFERENCE:
CHICAGO PLANT - INDUSTRIAL HYGIENE - LEAD DUST ABATEMENT
OC-3007 8/12/76 Page 2 of 16
Approval is requested for $216,000 to abate airborne lead dust in the Chicago Plant.
Air sampling in the three manufacturing buildings over
the past five years affirms that airborne lead levels
3
range from five to ten times the OSHA limit of 0.2 mg lead/m"3
air (8-hour time-weighted average), with peaks 50 times that
level.
OSHA conducted an in-depth inspection of the Chicago
plant December, 1975. A resultant citation demands
abatement of high lead-in-air concentrations-with full
compliance by March. 1, 1977.
faoxsWT*
OCT.
All operating personnel at the Chicago plant wear dust
respirators for the entire work day. With present plant
conditions, continuous use of respirator protection is
mandatory in order to control operator blood lead levels
below prescribed levels. Since the 1971 acquisition of
this plant by Cyanaraid, the blood lead levels have been
improved substantially through strong measures in personal
hygiene practices and improved equipment maintenance. These
efforts continue with constant vigilance. Respirator use,
however, is not acceptable as a primary means of employee
protection. OSHA requires that engineering controls be
implemented wherever feasible*
Inadequate exhaust ventilation, dust collection and materials handling equipment are the main sources of the high airborne lead dust concentrations in the Chicago plant.
N14468.05
CYWI 24--0006865
k Hr. B. H. Loper
-2-
OC-3007
8/12/76 July 28, 1976 Page 3 0f
In the 1974-76 period, the lead dust problem has been studied by engineers from QCD, ECD and by the Arthur G. McKee Engineers and Constructors. In recent months, two industrial hygienists from Cyanamid's OccupationalEnvironmental Services Section conducted an in-depth survey and prepared specification drawings for upgrading the ventilation, ductwork and dust collection systems. The subject request for S216H funds will permit implementation of the necessary corrective programs.
It Is proposed to construct new ventilation hoods and ductwork in all three manufacturing buildings, reactivate two dust collectors, overhaul two dust collectors, add one dust collector, and install a pneumatic litharge charging system and a central vacuum cleaning system.
Cyanamid's OES and Central Medical Department (see attached support memo) have reviewed the plans and "they concur. The proposed engineering improvements will substantially reduce the airborne lead levels. fcTe cannot be certain*, however, that the engineering upgrading wi) 1 reach OSHA's stringent limits for dust exposure. We are confident that the combination of these feasible engineering controls, improved administrative controls and the plant's* continuing personal hygiene, personal protection and medical surveillance programs will provide a healthier environment for our employees and will be acceptable to OSHA.
The lead stabilizer product line is a Quadrant IV business. Over the next ten years (1977-86), the annual sales of lead stabilizers and Willow Island's use of litharge will average $4,333M, the profit on sales$1,154M at 26.6% of sales; the NAT S338M at.7.8% of sales.
Considered as an industrial hygiene, non-revenue project, the internal rate of return is 26.7%.
Contingent future commitments in the Chicago plant are possible expenditures for replacement of two dust collector's (S50M) for outside environmental control, installation of a sewer-line filteru($25M) to meet regulatory standards for lead in effluent and installation of a new blender ($75M) for added capacity about 1981. These were included in calculating the IRR.
Approval of this job order is recommended to solve a serious industrial hygiene problem.
hr Att.
CYWI 24-0006S66
COMHSRCIAL FACTORS:
OC-3007 8/12/76 Page 4 of 16
Cyanamid acquired the MacGregor Lead Company in 1971 in order to expand and broaden our plastics additives use base.
Our CYASTAB line of lead stabilizers are comprised of carbonate, sulfate, phthalate and phosphite types. .Only Cyanamid produces a full line of products. NL Industries, the market share leader, produces all types except carbonates. Hammond Lead, in third position, does not produce the phos phite type. Varying PVC formulations and desired finished product properties dictate the type used. The major relevant market for PVC lead stabilizers is wire and cable insulation which currently consumes about 90% of the physical volume, up from about 83% in 1973. These finished products find wide application in the construction, communications, transportation, and appliance industries. The estimate of the total market for such stabilizers in 1976 is 18 million pounds, growing to about 25 million pounds by 1985.
The excellent insulation resistance and other favorable electrical properties of lead stabilizers will mitigate against product obsolescence. There is not a currently viable cost/performance nonlead-based competitive product* No imports are experienced and none are anticipated. Cyanamid^ current market share of approximately 44% is up from about 21% in 1971 when we entered the business and NL Industries led with about 75% of the market.
Table I portrays our market penetration progress expected long-term:
N14468.06
CYWI 24-0006867
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IA--OUW 8/12/76 Page 5 of
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CYWI 24-0006868
-3-
OC-3007 8/12/76 Page 6 of 16
Cyanamid's products are cost/performance competitive, and it is believed that this proposed capital expenditure will not alter that position.
Xt is known that our competitors also will be forced to expend capital in order to meet acceptable OSHA industrial hygiene standards.
The limited number of competitors is not expected to increase in this specialized market. Pricing is expected to remain stable and profit margins protected to reflect increased' costs.
Stabilizer sales and profits for the period from 19721976 are as follows:
TABLE XI
(000)
Sales Quantity Net Sales $ Gross Profit Expenses (%) Expenses NAT NAT %
1972 10 ,211
Actual
1973
1974
9,618 7 ,860
1975 4,854
Budget 1976
6,750
5 Kos. Estimate
1976
1976
3,477 7,977
$2 ,281 $2,382 $2 ,800. $1,936 $-2,591 $1,325 $3,192
719
762
752
471
678
427 1,006
15. 2
9.9
11.5
12.9
14.9
11. 5
11.
347
235
322
249
387
152
370
186
263
215
111
145
137
318
8. 2
11.0
7.7
5.7
5.6
10..3
10.C
CYWI 24-0006869
-4-
0C-3007 8/12/76
Page 7 of 16
ECONOMIC JUSTIFICATION:
This proposed expenditure is nonrevenue. To determine if this project exceeds the corporate guideline of a 12% internal rate of return, all other anticipated capital expenditures against the product line have been projected for the next ten years. These projects total$2Q0M. The internal rate of return for the period 1976-85 is 26.7%.
PRESENT MANUFACTURING SITUATION:-
Operations performed in the production operations which create the lead-in-air hazards are:
a. Dust at the ball mill feed and discharge.
b. Dust from screw conveyors transporting product from the ball mill to.the kiln, and feed to secondary kiln.
c. Discharge from secondary kiln.
d. Litharge bagging, drumming, and tote bin filling.
e- Charging litharge to the sulfate, phthalate and phosphite reactors.
f. Dumping of lead stabilizers from dryer pans to mill hopper.
g. P & S belt dryer - dry end discharge.
The OES survey in the second quarter 1976 affirmed that duct velocities are well below the recommended minimum dust transport velocities of 4,000 PPM. The total air requirements in the three manufacturing buildings exceed the total capacity of the 12 operating dust collectors. Existing hoods are poorly designed. The duct systems are routed with imbalanced,- ineffective loading to the various dust collectors. The two major dust collectors in the litharge building require overhaul. Cleanup of floors, walls and equipment in the Cowles and Sulfate buildings are' performed with ineffective portable vacuum cleaners. The overhead areas in all three manufacturing buildings are contaminated with lead dust which has accumulated* over the years.
CYWX 24-0006870
-5-
OC-3007 8/12/76 Page 8 of 16
BLOOD LEAD LEVELS:
Through administrative controls and strong personal hygiene and.respiratory protection programs, the employee's blood lead levels have declined steadily since 1971* The majority now has below 0.06 mg lead/100 g blood. The Cyanaraid guideline has been 0*03; the proposed new OSBA and Cyanamid limit is 0.06. A few employees are above 0.07 with an occasional excursion above 0.03. One employee (now back at worfe) may be classified as lost time if his recent anemia illness is attributed to high
lead absorption.
DETAILS OF PROPOSAL: Litharge Building:
1. Reactiviata two. abandoned Pangborn dust collectors.
2. Overhaul two Norblo dust collectors. 3. Add rotary air loch valves on dust collectors. 4. Install new hoods and ductwork. 5. Relocate kiln drop-out box outdoors.
Cowles Building: 1. Install new hoods and ductwork. 2. Install tray dumper for discharging lead stabilisers from dryer trays to mill hopper. 3. Enclose discharge of Hicro-Pulsaire (blending system) with adequate access to collection drum.
Sulfate Building: 1. Install Vac-U-Max pneumatic system for charging litharge to the.reactor. 2. Install new 2000 CFH dust collector. 3. Install new ductwork and hood's.
COWLES/SULFATE AREAS
Install a central vacuum cleaning system for more effective daily dust removal from floor, walls and equipment.
CYWI 24-0006871
' --6--.
0C-3G07 8/12/76 Page 9 of 16
Upon completion of all engineering controls, an outside contractor will be engaged to remove from all overhead areas in the three manufacturing buildings the lead dust accumulation of many years.
In April 1976, lead was addad to the EPA list of air pollutants fbr which air quality criteria must be established. When promulgated, the Chicago plant will be required to sub mit stack data on lead emissions. The plant is operating under licenses issued by Chicago and Illinois for atmospheric emissions. Emission data, however, has never been developed by actual sampling. Part of this job order is to have an outside firm run isokinetic samplings on all of our 12 discharge stacks to measure the effectiveness of particulate matter removal by the dust collectors.
It is estimated that the total project can be completed within one year after approval of the capital request. We have petitioned OSHA for modification of abatement date and will seek an extension to the third Quarter 1977 for full compliance.
All construction will be done by outside firms. We will hire an engineer for the Chicago plant to serve as liaison and to implement the project.
There may be short periods of down-time in the litharge unit which may necessitate the purchase of bagged litharge for use in stabilisers and by Willow Island for pigments.
CONTINGENT FUTURE COMMITMENTS:
There may be need for three additional capital esqpenditures in the 1977-81 period:
1. Replacement of the two old Norblo dust collectors, may be required if the stack testing shows a high particulate and lead discharge from the two outside stacks--estimated $50M.
2. The plant is under citation by both the City of Chicago Department of Environmental Control and the Metropolitan Sanitary District of Greater Chicago for lead concentration in the plant water effluent above the limit of O'. 5 ppm. Through the implementation of tight administrative controls and equipment modifications, the lead concentrations presently are running only slightly above the
CYWI 24-0006872
--V-
OC-3007 8/12/76
Page 10 of 16
specification* However, should the discharge concentration of lead increase, then a filtration unit costing about S25M may be required*
3* Based on forecast sales growth, an additional blender may be required in the Cowles building ($75M> about 1981-
RISK
The proposal is considered to have negligible technical risk for substantially reducing airborne lead dust concentrations* The proposeddust collection hoods and ducts will be designed to Cyanamid standards and will give the proper capture velocity and air flow to contain the lead dust* There is no guarantee, however, that the proposed engineering changes will reduce the lead dust to the existing OSHA standard gf 0.2 rag/ta0 or to the pending more stringent level of 0*1 mg/ra * V/e will achieve feasible engineering limits and will continue to depend on administrative controls and personal protection to maintain acceptable blood lead levels--below 0*06 mg/X0Q g* Our competitors in the litharge and lead stabiliser field have similar or worse plant conditions* They, too, plan to install engineering controls and also rely on personal protection and administrative controls to achieve acceptable blood levels*
ALTERNATIVES
1. Buy- instead of make litharge
Termination of litharge manufacture would cut an estimated $100,000 from the proposed expenditure* However, an expenditure of roughly $100,000 would be required to receive purchased bulk litharge*
Based on 1976 sales activity in the lead stabiliser and lead pigments lines, the buy versus make cash penalty would exceed $250,000/year before tax* Thus, with the standoff on capital and with the buy penalty, this alternative has been rejected*
2. Sell the Chicago plant and relocate'manufacture to Willow Island
Relocation of the manufacturing facilities would eliminate the necessity to spend the $216,000 to reduce lead dust emissions, but on examination, is not economically desirable*
CYWX 24-0006873
8/12/76 Page 11 of 16
A new battery limits facility would cost roughly four million dollars; two million for lead stabilizers and two million for litharge. Based on the experience of Hammond Lead at its new plant, there is still no guarantee that a new plant would comply with the lead dust limit.
Our Chicago plant neighbor, Armstrong Containers, Inc. has offered $30014 for our facilities, excluding equipment for which they have no interest. Discontinue litharge manufacture for lead chromate pigments in Willow Island
The economic analysis calls for discontinuing litharge manufacture after 1979, There is a minor effect on the economics which are based on the differential between delivered manufactured cost of $0,266/lb and outside purchase price of $0.273/lb for 3.8 million pounds per year.
The NAT will drop by $13,000/yr when litharge manufacture for Willow Island ends.
CYWI 24-0006874
<tOP- SC37 REV.
DETAIL SHEET
SHEET NO.
7/#2
COMPANY
American Cyanamid Company
ITEM OP
CODE NO.
DESCRIPTION
JOS ORDER NO.
/ y\ ^v
_0C -3007
DATE
8/12/76
JUly 22,Page 12 of 16
LOCATION
Chicago, Illinois
EQUIPMENT OP
MATERIALS
l abo r
ENG. MECH.
SVC.
TOTAL
701 Ventilation Hood and Ductwork Bldg, 19 704 Ventilation Hood and Ductwork Bldg. 20
22,042. 16,675.
44,083. 8,325.
66,125. 25,000.
705 Dust Collector Bldg, 20
5,360.
1,500.
6,860.
706 Ventilation Hood and Ductwork Bldg, 24
5,237.
10,491.
15,723.
708 Dust Collector Renovation Bldg. 19
8,820.
6,400.
15,220.
?io Vac-u-max pneumatic litharge Charging
Bldg. 20
7,895.
2,5p0.
10,395.
712 Central Vacuum System Bldg. 20
6,242.
3,500.
9,742.
71*+ Central Vacuum System Bldg. 24
6,242.
3,500.
9,742.
750 Stack Emission Testing
760 Plant Clean up
8,004. 86,517.
15,996.
20,000.
116,295.
24*000.
20,000.
202,812.
698 Illinois Sales & Use Tax
4,325.
4,325.
890 Dismantlement
9,000.
9,000.
90,842. 125,295.
216,137.
Dismantlement Ventilation Hood and Ductwork Elevator and Screw Conveyor
Acq. Date 6/71 6/71
Acq. Cost Disoosit: 32,050. Scrap 2,800. Scrap 3M?o.
N14468.07
CYWX 24-0006S75
proposed work to be done by the following firms:
Stack Emission Testing Poly Technic Inc. Consulting Engineers and Chemist Lincolnvood, Illinois
Sheet Metal Engineered Air Systems, Inc. Chicago, Illinois
Vac-u-aax Vac-u-max pneumatic Conveyor Systems Belleville, N. J.
Vacuum System Hoffman Air & Filtration Div. Clark Industries, Inc. Tew York, IT. Y.
Dust Collector Modifications Finnerty U Company Arlington, Heights. Illinois
plant Clean up product Lon Chemical Co. Franklin Park, Illinois
OC-3007 8/12/76 Page 13 of 16
N14468.08
CYWX 24-0006876
-
TO: F. B. Dorf l o c a t io n : Bound Brook
Wayne ... July 26, 1916
OC-30Q7 8/12/76 Page 14 of 16
COPY TO: B. H. Loper - BB
f r o m: R. M. Clyne, M.D
SUBJECT: CHICAGO PLANT: LEAD DUST ABATEMENT
REFERENCE:
The Central Medical Department supports this prospectus.
On February 17, 1976, the Chicago Plant received an OSHA citation (non-serious violation) for exposing employees to airborne3levels of lead in excess of the current standard of 0.2 mg/m . Corrective action was ordered by July 30, 1976, for one area and March 1, 1977, for another. The work des cribed in this prospectus is our response to this order. Furthermore, we believe that these measures are necessary to assure the safety of our employees.
We have requested an extension of four months of the 1976 deadline and nine months of the 1977 deadline. This pros- pectus would be the justification for granting the latter extension.
We believe that the additional engineering controls will nog reduce airborne lead levels consistently below the 0.2 mg/nr level. However, combined with personal protective measures, they should result in the reduction of blood lead levels below 60 yg/100 ml for all employees. Blood lead levels are more accurate indices of a harmful exposure than airborne concentrations. In the event that the plant should receive another OSHA inspection after completion of the work, we believe that there is better than a 50-percent chance that - it would be allowed to continue in operation^even if airborne lead levels were found in excess of 0.2 mg/m .
On October 3, 1975, OSHA published a proposal to reduce the permissible limit of lead in air to 0.1 mg/m , and to set a limit of blood lead at 60 yg/100 ml as opposed to the 80 yg/ 100 ml that has heretofore prevailed in medical judgement.
' /
Our employees currently are protected by the wearing of res- pirators. At our last survey of blood leads, about 75 per cent were below 60 yg/100 ml and the remainder were below 80 yg/ml. Maintenance of all values below 80 yg/100 ml cannot be assured under present condit<*rt
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N14468.09
CYWI 24-0006877
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Working Capital: 853
Capital Recovery (Year n)
Fixed Capita!: 502
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CYWI 24--0006878
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CVWI 24-0006879
