The Chemical World This Week
FTC CLAIMS DU PONT ATTEMPTED TI0 2 MONOPOLY A long awaited U.S. government move is under way to break open an alleged attempted monopoly by Du Pont in titanium dioxide, the most widely used white pigment and second in use among all pigments after carbon black. Last week the Federal Trade Commission issued a complaint accusing Du Pont of "unlawfully attempting to monopolize the production of titanium dioxide pigment (Ti0 2 ) in the U.S. through unfair means." Two alleged practices cited in the complaint are that Du Pont may capture all U.S. T1O2 industry growth at least through the 1980's with capacity expansions and that the company has used a pricing policy to frustrate smaller producers and bar entry by newcomers. FTC says that Du Pont accounts for more than 40% of U.S. annual T1O2 production, which was valued at more than $600 million in 1976. The four largest T1O2 producers account for more than 80% of production, and barriers to new entrants are high. FTC adds that Du Pont's T i 0 2 business in 1976 yielded sales of more than $265 million and pretax earnings of about $40 million. If FTC wins its case, the agency says that Du Pont would have to do at least two things to ease its grip on the T1O2 business. First, Du Pont would have to divest two plants, one still being built in DeLisle, Miss., and another either in New Johnsonville, Tenn., or Edge Moor, Del. Also it would have to start royalty-free licensing of all its T1O2 technology. Du Pont issued an immediate statement responding to the complaint, in which chairman Irving S. Shapiro says, "The complaint is wholly without basis. There are six domestic manufacturers of titanium dioxide, and Du Pont has become the leading producer in this industry as a result of proprietary technology developed by the company in the 1950's. We will contest the allegations in the complaint and will ask the commission to expedite hearing of this matter so that this issue can be settled on its merits as promptly as possible." FTC has set hearings on the T1O2 case for May 30 in Washington, D.C. The FTC action relating to T i 0 2 pricing has been one of the major worries for T1O2 producers in the past 6
C&EN April 17, 1978
Shapiro: wholly without basis
year (C&EN, June 13,1977, page 12). It was known that the agency was looking into T1O2 and might start an action tying up the business for possibly years. However, the T1O2 industry has numerous other problems as well that
have frustrated hopes for strong new growth in the past year after a smart recovery in 1976. T1O2 production sagged 5% in 1977 in thé U.S. to 678,000 tons, according to preliminary Commerce Department figures. By C&EN's latest capacity use survey, T1O2 plants started 1978 close to the chemical industry's weak overall capacity use rate of 77% of official nameplate capacity. T i ( V s U.S. market growth in the past decade has been way below average for large-volume commercial chemicals. Production growth has averaged just 1.5% per year, with -0.4% per year since 1972. The sluggish pace comes in part from vigorous efforts to cut the percentage of T1O2 in major end products, coatings and paper. This campaign results not only from normal productivity efforts by producers and customers. There is T K V s price. It is expensive for a large-volume chemical, priced in the upper 40 cent-per-lb range. Π
Airco merger settled; KG ipers begins another One merger fight ended last week and another began. The battle between Airco and the British firm BOC International for control of the New Jersey-based industrial gases company ended earlier this month with both sides the winner. BOC will gain total control of Airco and Airco will get the sfock price that it wants. BOC raised the price it will pay for Airco stock to $50 per share, thus matching the offer that Martin Marietta had made for Airco. In addition to the $50 per share that BOC will pay for the 46% of Airco that it did not previously control, it will pay each stockholder who tendered Airco stock in early January for $43 per share an additional $7.00 per share in cash. These shares were tendered in an offer by BOC for 1.8 million shares—an offer that was tremendously oversubscribed. It is not known at this time if BOC also will pay an additional amount to shareholders from whom BOC bought 841,500 Airco shares for $44.125 per share in late March (C&EN, April 3, page 9). BOC's tender offer will be made, according to the company, "at the
earliest practicable date." BOC's payout under the new proposal will be about $133.4 million. Airco and BOC also have agreed to discontinue a lawsuit over the 1.8 million shares that BOC bought in January upon completion of the tender offer. The only loser in the game seems to be Martin Marietta, but this compa ny's chances were severely limited from the start. It was offering to buy in as a minority partner to what probably would have been a very un friendly BOC. It even has been sug gested that Klartin Marietta's offer was merely a vehicle that Airco could use to force BOC to offer a higher price. If this was the case, it worked very well. In other merger news last week, Koppèrs has started a move to buy into Cutler-Hammer, an electronics firm in Milwaukee. Koppers purchased an entire offering of 650,000 shares of a Series A convertible voting preferred stock issued by CutlerHammer. This represents about 10% of the outstanding stock of CutlerHammer. Koppers is opposed in the merger battle by Tyco Laboratories, a small
New Hampshire electronics firm that last week increased its interest in Cutler-Hammer to about 15%. Koppers had profits of $66.2 million in 1977 on sales of $1.4 billion. Cutler-Hammer's 1977 profits were $24 million on sales of $517 million. Tyco in the last four quarters, which includes nine months of fiscal year 1978, had sales of $166.2 million and profits, excluding an extraordinary gain of $5.7 million, totaling $3.2 million. The extraordinary gain was realized from the sale of stock in Leeds & Northrup to Cutler-Hammer. •
CEQ optimistic on solar energy outlook The President's Council on Environmental Quality was nothing if not enthusiastic and optimistic last week as it issued a report on the outlook for solar energy. If it tries hard enough, the report says, the U.S. can meet up to one quarter of its energy needs through solar technology by the year 2000. And "for the year 2020 and beyond, it is now possible to speak hopefully and unblushingly of the U.S. becoming a solar society." A national goal of providing significantly more than half of U.S. energy from solar sources by the year 2020 should be achievable, the report says, if the nation's commitment to that goal and to energy conservation is strong. For its report, CEQ made an extensive literature review and held numerous discussions with solar experts within and outside government. "No one's crystal ball works very well in examining energy futures," says council member Gus Speth, "but the consistently grim views reported by some people and the overoptimistic
views reported by others convinced us to take a look for ourselves." CEQ's conclusion, Speth says, is that although there are economic and institutional hurdles still ahead, "the prospects for solar energy are brighter than most imagine." The CEQ report examines suggestions in a variety of areas that have been offered as ways to stimulate the federal effort to promote solar energy. Among them are to expand financial incentives and eliminate institutional barriers, adopt needed changes in the federal solar R&D program, institute price reform for competing fuels, develop the solar market available in less developed countries, and improve government programs for the purchase of solar equipment for federal use. With the proper commitment to solar energy, CEQ estimates, its contribution to U.S. energy demand by the year 2000 could be 20 to 30 quads (quadrillion Btu). Current annual U.S. energy demand is 76 quads, with estimates of demand for the year 2000 ranging from 80 to 120 quads and for 2020 from 70 to 140 quads. The optimistic note of CEQ's report doesn't necessarily contradict the more cautious and studied tone of a report issued a week earlier by the Department of Energy's Solar Working Group (C&EN, April 10, page 7). That group looked at the balance of DOE's solar R&D program and recommended some changes in emphasis. The DOE group's study focused on the balance among the several solar technologies and the relative amount of resources and attention each received. It didn't consider the total solar energy program in relation to the size of nonsolar energy programs. Nor did it go very deeply into matters other than R&D—for example, incentives and subsidies, loan guarantees, and taxes. The CEQ report, "Solar Energy: Progress and Promise," is available from CEQ, 722 Jackson Place, N.W., Washington, D.C. 20006. D
Industry In space charted by NASA study
Heating panels are among the mote practical initial uses of solar energy
Like space itself, the economic impact of industrialization of space is hard to get hold of. One of the chief proponents of space industrialization, the National Aeronautics & Space Administration, has made an attempt in a recently completed study, giving a timetable of costs and benefits for industrialization of space. Sales of services originating from space already are producing gross
revenues of more than $1 billion a year, according to the study prepared by Rockwell International & Science Applications Inc. Some 111 nations actively participate in space industries. At least five now sponsor space materials processing research and at least three organizations or nations are actively conducting launches. By the end of the century, gross revenues from space will have grown to $10 billion to $20 billion with only minor advances in preserit technology, the study predicts. And with technological progress, space industries eventually could earn $40 billion or more per year. Nearly all of the present income from space ventures is in information services, where commercially owned satellites provide communication as well as information on earth resources and weather conditions. But there are three other areas of space industrialization awaiting development— products, energy, and people in space. The study divides its projections into three 10-year periods—the 1980's, 1990's, and 2000's. For the 1980's, information services will continue to dominate space utilization, but there will be important experimental systems such as the space shuttle and low-earth-orbit power modules. By the 1990's, a space materials factory and a global weather and resource base could be in use as well as initial operation of a satellite power system. Beyond the year 2000, materials from the moon could be processed in space stations, and space installations could become a worldwide energy source. D
Allied settles nearly all Kepone suits Allied Chemical announced last week that it has settled "virtually all" personal injury suits against it stemming from Kepone manufacturing operations, now discontinued, in Hopewell, Va. At least two other suits against the firm are still outstanding. Although the firm refuses to disclose the total size of the settlements, a company spokesman says that outof-court agreements have been reached with 30 workers who had helped produce Kepone, a chlorinated and highly toxic insecticide, for Life Sciences Products Co. before the plant was forced to close by Virginia authorities in July 1975. Life Sciences was not much more than a tolling operation for Allied: It received the ingredients to make Kepone from Allied, manufactured the compound, and returned it to the April 17, 1978 C&EN
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