(an important factor), economics, marketing potential, social and environmental impact, and the functional requirements for systems. GE found, for example, that an estimated 4.5 million buildings could use supplementary solar heating and cooling by the end of this century, and this would reduce air pollution emissions by 430,000 tons annually. The Westinghouse study predicts that supplementary solar energy systems can be cost-competitive with conventional heating and cooling as early as the late 1980's, while heating-only systems will be competitive within the next five years. And TRW says its findings show that the public—which ultimately will be paying for the solar systems as part of building costs—is favorable toward the concept, with 53% of those surveyed indicating that they would consider buying a solar unit even if the cost was greater compared with a conventional unit.
popular with investors. Nalco occurred. The subcommittee is also shares sold as high as $41.75 last "concerned about the expansion of year and recently have been trading exports in the industry . . . while doat about $28 a share. Lawter, which mestic shortages continue, despite is traded over the counter, went to removal of price controls." a high of about $34 in 1973. Just In the first phase of the investibefore the merger proposal was an- gation, the subcommittee staff will nounced this month, it closed at send a detailed questionnaire to the $23.25 bid. It dropped to $20.75 bid larger petrochemical producer-supthe following trading session but pliers requesting information such has since recovered part of the loss. as sales, production, exports, and Nalco says that Robert T. Powers allocation of products made with will continue as its president and feedstocks covered under the federchief executive officer. But Daniel al mandatory allocation program. J. Terra, chairman and president of Meanwhile, a subcommittee staff Lawter, is expected to replace Mr. man tells C&EN that the subcomPowers as Nalco chairman when mittee is welcoming letters from the merger takes place. Mr. Terra large and small petrochemical proand members of his family own ducers alike telling of the indusabout one third of the outstanding try's problems. Lawter stock. Mr. Terra also has been a Nalco director since last April.
Specialty chemical makers plan to merge
A more or less open-ended investigation of the U.S. petrochemical industry is being launched by the House Subcommittee on Activities of Regulatory Agencies of the House Small Business Committee. Although it is by no means certain, the investigation could lead to a host of actions—such as new federal laws dealing specifically with the industry's problems, federal antitrust actions, civil litigation, new regulatory sanctions, and Congressional hearings—or maybe nothing. The investigation has been prompted, according to the subcommittee's chairman, Rep. John D. Dingell (D.-Mich.), by numerous complaints to members of Congress from businessmen about the adverse impact of the petroleum and petrochemical feedstock shortage and the competitive tactics of large petrochemical producer-suppliers. Rep. Dingell says that the investigation is to "ascertain the nature and scope of problems of small petrochemical companies and to discover the extent to which these problems may be attributed to federal laws or agency regulations." It is also to determine "whether major petrochemical producers and suppliers have attempted to utilize the present shortages to destroy their small business competitors and to extend themselves into new marketing areas." Areas of special interest to the subcommittee include the extent to which tying arrangements, concerted refusals to deal, and both horizontal and vertical extensions have
Two Chicago-area specialty chemical firms with better than average growth records, Nalco Chemical and Lawter Chemicals, plan to merge. If the deal is approved by directors and stockholders of both firms, Nalco will issue about 6.4 million shares of its common stock, worth about $178 million, in exchange for Lawter's 7.7 million. Each Lawter shareholder would get 0.825 share of Nalco. (Nalco now has about 19.9 million shares outstanding.) Lawter would then operate as a Nalco subsidiary. Nalco makes and sells specialized chemicals and services for water treatment and pollution control, oil production and refining (including tetraalkyllead antiknock compounds), steelmaking and metalworking, agriculture, papermaking, and other industrial processes. In 1973 its earnings jumped 24% to $25.0 million ($1.25 a share) on a sales increase of 12% to $218.2 million. Its sales have more than doubled since 1966. Lawter specializes in producing and marketing printing ink vehicles, synthetic resins, fluorescent pigments, and other products largely for use in graphic arts. Its sales were up 30% last year to $31.6 million; earnings increased 29% to $5.1 million (66 cents a share). Last year's sales were more than double those of 1968. Stocks of both firms have been
House unit to probe petrochemical firms
Fuller disclosure of R&D costs urged
Spending for research and development would have to be treated as a current expense. And companies would be required to fully disclose their R&D costs in reporting to stockholders. This is the gist of a proposed accounting standard now being circulated for comment by the Financial Accounting Standards Board (FASB). Although most major chemical companies now charge off R&D outlays as incurred, policy as to disclosure is by no means uniform. The FASB proposal would require that financial statements show, for each period, total R&D costs, the amount directly reimbursable by others, and the resulting amount of nonreimbursable costs charged to expense during the period. If adopted by the board, the new standard would become effective next Jan. 1, with R&D costs capitalized previously to be written off against results of prior periods. FASB is an independent organization, supported by several associations of accountants and financial analysts, set up last year to establish accepted principles. In issuing its "exposure draft' for the R&D standard this month, it noted that future benefits of R&D costs are highly uncertain, that spending on particular projects can rarely be related to specific future revenue, and that projects often fail. Hence, R&D costs "do not satisfy the conditions for accounting recognition as an asset. Nor can they be deferred and 'matched' against revenues on any sort of cause and effect basis." Instead, "they should immediately be recognized as expenses." June 24, 1974 C&EN
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