koppers gets a new $8.5 million lab
TRANSCRIPT
I N D U S T R Y & B U S I N E S S
Koppers Gets a New $8.5 Million Lab New research center at Monroeville, Pa., points up Koppers7 growing stake in the chemical industry
Koppers Co.'s new $8.5 million research center in Monroeville, Pa., points up the fact that Koppers, now an important chemicals producer, intends to increase its stake in the chemical industry in the future.
Koppers' sales are widely diversified, ranging from coke plants to fence posts to polystyrene. But the major part of Koppers' ST.5 million research budget is spent on chemical projects.
Koppers* research effort is clearly aimed at putting the company into profitable areas of chemicals and plastics. In the polymer field, for instance, a good deal of research is concentrated on modified polymers that sell at higher prices than general purpose resins. One example is an expandable polystyrene that Koppers introduced commercially last year for extrusion of foamed insulating board.
The company is keeping its eye on other plastics that would fit into its existing line. Koppers already has a foothold in polypropylene. The com
pany leased half of its Port Reading, N.J., polyethylene plant to AviSun, which converted the plant to make polypropylene. Koppers personnel run the plant for AviSun. The lease is due to end this November, and Koppers is considering switching the plant back to polyethylene. It does not want to pull out of polypropylene completely, however, and may market material made by another firm.
Plastics Research. The largest single research group at the Monroeville center is in plastics. One of the key projects is a continuing effort to develop new polymers with high impact resistance and thermal stability. The company is also looking for ways to increase the use of plastics in automobiles and to improve the properties of plastic pipe. A good deal of effort goes into packaging applications. One of the most interesting prospects under study, the company says, is the use of low density polyethylene in blow molded shapes for packaging.
Koppers' chemical research is mainly focused on specific areas- that fit the company's experience, such as coal tar products, organic boron compounds, pharmaceutical polymers, and high temperature synthesis. The company points out that while coal tar contains hundreds of organic compounds, fewer than a dozen have widespread use. One of Koppers' hopes is to find profitable ways to use phenanthrene, a coal tar chemical second in abundance only to naphthalene. At present, the research department is studying diphenic acid, a derivative of phenanthrene. The acid has potential use in alkyd coatings, synthetic lubricants, and as a plasticizer.
Last year, Koppers' research came up with a successful synthesis for butadiene dioxide. The company feels the compound should be useful as an intermediate. It is highly reactive but can be mixed with water, has low viscosity, and does not discolor during reactions.
One of the newest projects is the study of chemical synthesis at high temperature. Koppers is working with a plasma gun that produces a stream of gaseous ions and electrons at temperatures up to 25,000° F.
In addition to divisional work, Koppers' research has an exploratory section that moves into areas unrelated to present product lines. Probably one of the most promising projects
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Steady Growth of Chemical Sales Contrasts with
The Up$ and Downs of Koppers' Total Sales Pattern Millions of Dollars
1946 1948 1950 Source: Koppers Co.
1952 1954 1956 1958 1960 RESEARCH. Koppers' new lab should help boost its chemical sales. Here, a wood preserving chemical is tested
26 C & E N S E P T . 4, 1961
Congress to Look at Depletion Law Legislators have introduced bills to clarify legal problems in percentage depletion laws
under way at the moment is the company's hydrate process for removing salt from seawater (C&EN, Dec. 12, 1960, page 60). Shortly, Koppers expects to move the process into the pilot plant stage with a unit that can make 10,000 to 15,000 gallons of desalted water a day.
The Start. Koppers began in 1908 as a builder of chemical-recovery coke ovens. This soon led the company into the chemical business. But chemicals took a back seat to engineering and construction until about 15 years ago. Then the firm's management decided to put a major push behind chemicals and plastics.
Since 1946, Koppers' chemical sales have grown by more than five times. In the same period, total sales increased about threefold. Sales of the plastics division, which includes styrène monomer, polystyrene, polyethylene, and styrene-butadiene latexes, were $52.6 million in 1960. The chemicals and dyestuffs division had sales of $15.6 million; tar products sales came to $63.1 million.
Wood preserving, metal products, gas and coke, and engineering and construction account for the balance of Koppers' $303.7 million sales in 1960. Total sales of the company have varied quite a bit from year to year, mostly because of ups and downs in construction. The engineering and construction division brought in $62 million in 1958, $27 million in 1959, and $72 million last year.
With its research center completed, Koppers now has the physical facilities to develop research ideas into practical products as rapidly as possible. The Monroeville center is built around a series of office and laboratory modules. Each wing of the main building has labs on one side of the central corridor, offices on the other.
In addition to the usual safety precautions, all the labs are kept under negative pressure so that toxic fumes cannot escape and build up in the office areas. The offices, on the other hand, are kept under positive pressure so that air constantly flows out.
Most of the workers at Monroeville were previously located at Verona, Pa. Koppers plans to continue to use its facilities at Verona for pilot plant and semicommercial work. The new center, located on a 176-acre site about 25 minutes from downtown Pittsburgh, houses some 400 employees who handle research for Koppers' seven operating divisions.
A bill that would help clarify taxes on chemical raw materials has been introduced by Sen. Wallace Bennett (R.-Utah). ' S. 2456 and H.R. 8474, introduced earlier by Rep. Victor A. Knox (R.-Mich.), would define allowable processes for percentage depletion calculations, for which cutoff points are now up in the air.
The new Senate bill would restore crushing and grinding as allowable processes. It would also apply the Gore amendment, last year's attempt at reducing lawsuits caused by retroactive tax changes, to all producers. And it would throw out the criterion of "marketability" as grounds for disallowance. This criterion has been involved in a series of court decisions.
Limestone, gypsum, borax, soda ash, phosphate rock, beryl, and other chemical raw materials now qualify for percentage depletion. Depletion is part of the $846 million depreciation and depletion charges of the basic chemicals industry in 1960.
Key to the confusion in percentage depletion is a gradual transition in the basis for determining the products to which the percentage is applied. Gross income from mining products is covered by percentage depletion; gross income from manufactured products is not. Somewhere in the process of converting minerals in the ground into products in the consumer's hands, the mining process stops and the manufacturing process begins. This point is the cutoff point on percentage depletion. The actual amount deducted from taxable income is a percentage (set by Gongress for each mineral) of the gross value of products at the cutoff point.
PERCENTAGE DEPLETION
Under percentage depletion, a company taking out minerals is allowed to deduct from its taxable income a specified percentage of its gross income from mining. Percentage depletion is a method of allowance for consumption of an irreplaceable capital asset, i.e., the natural resources taken out of the ground.
In legislation dating back to 1926 and covering oil, metallic minerals, coal, sulfur, and other materials, Congress was quite specific in defining "mining." In 1943, Congress named the processes. This system had the advantage that the cutoff point was based on recognizable changes, such as size of particles, or concentration.
Long Standing Problem. Trouble began in 1951, when nonmetallic minerals were brought under the law but the pertinent mining processes were not defined. In 1954 the courts decided that, for clay and cement rock, even processes normally regarded as manufacturing were allowable if needed to make the product salable.
In the Cannelton case in 1960 the Supreme Court used marketability as the criterion for the cutoff point. The court decided that for fire clay used to make sewer pipe, percentage depletion must be computed on the value of raw clay, which is marketable as such, rather than sewer pipe.
The decision had wider implications than would be indicated by its application to sewer pipe. The Treasury had always cut off the depletion after the clay had been crushed and ground, an intermediate state not mentioned by the court. The status of all such processes was now in doubt.
Marketability has some shortcomings as a criterion. It cannot be determined by looking at or testing a material. A mineral in boulder-sized lumps that had been crushed and ground at mines for decades could become a "marketable" product as a result of a few sales.
In view of the Cannelton decision, Treasury ruled that (Rev. Rul. 61-17, Jan. 30, 1961) ". . . any process which is not necessary to bring such mineral to shipping form will not be considered an ordinary treatment process."
Congress tried to settle the problem by the Gore amendment to the Public Debt and Tax Rate Extension Act of 1960. Rut the status of mining processes for mineral products other than cement was left up in the air. Clarification of depletion law will have to move fast to come within this session of Congress, but the bills have good prospects for passage.
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