Wyandotte sheds conservatism with expansion, new financing

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<ul><li><p>cyclical factors are involved. These basic factors will continue to dampen the rate of economic growth in western Europe beyond the short term and for as much as five to 10 years in the fu-ture. </p><p>"Reconstruction is much easier than expansion," Mr. Schoellkopf explains. The pentup demand of the postwar years has been satisfied. The high in-flation rate, the rapid growth in ex-ports, and large capital spending pro-grams that characterized western Eu-ropean economies during the past 15 years will not continue. Further re-ductions in trade barriers between countries will also not give a fillip, equal to their initial impact, to western Europe's output of goods and services. </p><p>A serious labor shortage, increased competition, and lower profitability are the clouds darkening the outlook for the coming five years in western Europe. The labor shortage poses the most serious threat. The postwar low birth rate is a factor. And increases in work force like those that resulted from refugee movements from East to West and Algerians to France won't re-occur. Also, about 20% of the work-ers who came from Italy, Spain, and other less industrialized nations to West Germany have returned home. </p><p>Mr. Schoellkopf expects competition to increase as a result of the free move-ment of goods across national bound-aries and growing foreign investment in western Europe. Profitability or re-turn on investment will decline as growth slows and services account for more of the gross national product. </p><p>On the brighter side, he predicts that interest rate difference between the U.S. and western Europe will con-tinue to narrow, that corporate cash flow will increase as a result of higher depreciations, and that capital will be easier to borrow overseas. </p><p>The present situation has already caused some U.S. firms to have second thoughts about investing in western Europe. Opportunities will still exist, Mr. Schoellkopf says, but more care will have to be taken than has been true in many cases in the past before a decision is made to go to Europe. </p><p>Ti02 secrets case dismissed, as Du Pont agrees with Ampot </p><p>After four and a half years, Dr. Donald E. Hirsch is no longer under a court injunction restraining him from telling his new employerAmer-ican Potashthe trade secrets of his old employerDu Pont. But he is under an "obligation," in the words of a joint press release issued by the two companies, "not to divulge any Du Pont trade secrets." The press re-</p><p>Dr. Donald E. Hirsch Obligation not to tell </p><p>lease announced that Du Pont had agreed to American Potash &amp; Chemi-cal's request that the 1962 lawsuit started by Du Pont and involving trade secrets related to the chloride process for making titanium dioxide pigment be dismissed. </p><p>In the Court of Chancery in Wilmington, Del., Vice Chancellor William Marvel signed the order dis-missing the suit "with prejudice." Dismissing the suit with prejudice means that Du Pont cannot start another suit against Ampot and Dr. Hirsch on the same matter. The order also dissolved and vacated the tempo-rary restraining order enjoining Ameri-can Potash from utilizing Dr. Hirsch and enjoining him from being utilized in matters relating to a new chloride-process titanium dioxide plant Amer-ican Potash was then planning to build. </p><p>With removal of the injunction, Dr. Hirsch is now free to work at Ampot's titanium dioxide plant at Hamilton, Miss., but the company isn't likely to use him there. (For half of his 12 years at Du Pont, Dr. Hirsch worked on the chloride process.) According to the Du Pont-Ampot announcement, the Mississippi plant has been making specification material since the last quarter of 1965. Du Pont had con-tended in early arguments over the lawsuit that its engineers experienced many problems in making the chlo-ride process work on a commercial scale and that knowledge of how Du Pont engineers solved the problems would be invaluable to Ampot. </p><p>When the lawsuit began, in 1962, Ampot was planning to build a tita-nium dioxide plant in California that would use a chloride process devel-</p><p>oped by England's Laporte Indus-tries, Ltd. Dr. Hirsch was to have been manager of technical services for that plant. </p><p>Dr. Hirsch, a chemical engineer, is now working as manager of plant technical services for Ampot's opera-tions at Trona, Calif. According to the joint announcement, he has had no contacts with the titanium dioxide plant development or operation dur-ing his employment with Ampot. </p><p>Dismissal of the Hirsch case lays to rest some of the problems it raised for businessmen and attorneys. But for the engineers and scientists employed in modern corporations, the suit's dis-missal means that some of the prob-lems it raised in the area of profes-sional ethics and professional free-dom (C&amp;EN, Jan. 18, 1965, pages 80-94) will not be aired in a court-room. </p><p>Wyandotte sheds conservatism with expansion, new financing </p><p>"This may surprise those of you who have thought us overconservative," president Robert B. Semple of Wyan-dotte Chemicals Corp. told the New York Society of Security Analysts. The long-timesince 1949company chief referred to an aggressive growth-mindedness at Wyandotte that has re-sulted in a combined $50 million capi-tal investment forecast for 1967 and 1968. </p><p>Sustained capital spending at Wy-andotte, about $90 million from 1965 through 1968, has called for a new financial tack since the start of this period (when the company had no long-term debt) . Wyandotte is cur-rently negotiating for a private place-ment of $20 million. This follows a previous $20 million in bank financing arranged last year. "Equity financing may be down the road for us," adds vice president and treasurer Donald R. Hibbert, "but we have not chosen that course to date." </p><p>Some investment benefits, Mr. Hib-bert states, showed up in 1966 sales and earnings. Then, in the first quarter of this year, Wyandotte's net earnings, unlike those of many chemi-cal companies, broke sharply upward to $1.6 million, compared to $1.1 mil-lion in the first quarter of 1966. Sales in the first quarter of 1967 rose to $30.7 million from $28.1 million at the same time last year. </p><p>However, Mr. Hibbert cautions: "That pace won't continue. We've got more than $30 million worth of new plants starting up the rest of this year. And that will be felt in the income statement." </p><p>Present market picture at Wyan-</p><p>MAY 15, 1967 C&amp;EN 21 </p></li><li><p>Robert B. Semple No longer overconservative </p><p>dotte shows emphasis on urethane ma-terials, organics, chlor-alkali, cement, and specialties. Mr. Semple says his company and Union Carbide are the largest producers of polyols (raw ma-terials for urethanes), with "each be-lieved to have in excess of 20% of the market." </p><p>In a second urethane material, tolu-ene diisocyanate (TDI ) , Wyandotte will have about 9% of industry capac-ity when its plant at Geismar, La., just starting up, reaches full production, according to Mr. Semple. In ethylene glycol, Wyandotte produces about 6% of the industry's 200 million gallons a year. </p><p>Company capacity for soda ash is about 10% of nearly 8 million tons in-dustrywide this year, according to Wil-liam H. Glick, general manager of Wyandotte's inorganic chemicals divi-sion. Mr. Glick admits that Wyan-dotte is examining the natural soda ash development in Wyoming. </p><p>Mr. Glick pegs Wyandotte's com-bined chlorine and caustic sales at about $35 million. Company capacity is about 6% of the industry total. </p><p>Modern copying to generate $1 billion market by 1970 </p><p>The equipment and supplies market generated in the U.S. by modern cop-ying methods will reach an annual sales volume of more than $1 billion in 1970, according to Arthur S. Dia-mond of Telautograph Corp., Los Angeles. The 1970 figure does not include an overseas market that al-ready has swelled to more than $300 million per year, Mr. Diamond said </p><p>last week in Washington, D.C., at the 18th coatings conference of the Tech-nical Association of the Pulp and Paper Industry. </p><p>Office copying currently is done by five major processes which depend on converting a sensitized paper coating into a permanent, visible image. They are direct electrostatics, diazo, ther-mography, diffusion transfer, and dye transfer. Xerography, or transfer elec-trostatics, does not use sensitized pa-per. But it is a major factor in the field and accounted in 1966 for more than 50% of the total annual revenue from copying materials and equip-ment. </p><p>In the past six years, technological change has affected market size and structure (see graphs). Mr. Diamond points out that some of the carefully drawn lines which originally distin-guished one segment of the office copying field from another have dis-solved. Changes in reproduction equipment and pricing policies are ob-literating these boundaries. </p><p>There has been enormous growth in direct and transfer electrostatics. Diffusion and dye transfer processes are following a decline that began in 1963 and 1964, while thermographic sales appear to have reached a plateau at $100 million. The strong position held by thermography in the low-vol-ume field is still outside the reach of electrostatics, mainly because of equip-ment costs. Mr. Diamond says that it is generally held that "this part of the picture will change in the next few years when direct electrostatic copies are made simpler and less expensive. At that time, the higher quality elec-trostatic method should begin to dis-place thermography. Barring a major innovation, it is doubtful that the nec-essary reduction can be made in the cost of xerographic equipment to per-</p><p>mit competitive entry into the low-vol-ume market." </p><p>Larger companies are beginning to recognize the cost of document copy-ing as a major business expense. Par-alleling this growing awareness among consumers is the trend in the techni-cal and trade associations to establish standards and specifications for prod-uct quality. One project now in prog-ress attempts to define print perma-nence in terms of customer needs. There might be, for example, a three-level classification for the durability of office copying papers: a "throw-away" level for short-term reference material; an intermediate level for papers that would be required on file for up to 25 years; a third level of doc-uments having a relatively long storage life beyond 25 years. </p><p>Besides these attempts at standards and paper specifications, there are other trends in the office copying field. The increase in direct electrostatic sales between 1963 and 1966, about 425%, is comparable to the growth of transfer electrostatics in 1960-63, when sales rose about 480%. Transfer electrostatics last year attained a vol-ume (at $400 million) that is 2.5 times that of direct electrostatics (at $160 million). But the percentage growth of the xerographic process in 1966 was lower (30%) than the 45% growth for Electrofax copying. </p><p>Diazo and thermographic methods continue to show strength. Diazo has a good chance of moving steadily into office applications, particularly as larger companies react to the cost of copying by other, more expensive methods, Mr. Diamond says. Oppor-tunities for development of such a trend are reflected in the availability of higher speed diazos, refinement of the more efficient metal halide lamp, improved thermal diazo processes, </p><p>Transfer electrostatics (xerography) pulls away from five other copying methods </p><p>Note: Both graphs show sales of equipment and supplies. </p><p>400 </p><p>350 </p><p>I 300 </p><p> 250 c </p><p>= 200 E 8" 150 / 3 IOO' o H </p><p>50 </p><p>/ ' / </p><p>/ / / </p><p>Diazo / J*&gt;~\ </p><p>oi 1960 </p><p>-J I L. 1962 1964 1966 </p><p>Source: Arthur S. Diamond </p><p>120, S2 ! </p><p>i ioo </p><p>S 80, o = 60 E </p><p> 40 n %n </p><p>I 20 </p><p>Thermography </p><p>'ftr . Dye transfer Diffusion transfer ..o--w *^*4XT" **, </p><p>0 1 1960 </p><p>' * ' 1962 1964 1966 </p><p>22 C&amp;EN MAY 15, 1967 </p><p>Wyandotte sheds conservatism with expansion, new financing</p></li></ul>