MCA Defends Dual Distribution System - C&EN Global Enterprise

Nov 6, 2010 - Bills designed to correct the problems of dual distribution at the retail level could cause serious harm to the chemical industry. As Mo...
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gain of 230 million pounds over the 360 million pounds that were consumed in 1965. From a technical point of view, Dr. Powers says, polyester seems to have the characteristics of the all-purpose fiber. Its dyeing problems have been gradually solved, and its resilience and recovery seem to assure it a great future. He points out that in 1965 acrylic fiber consumption was well ahead of that of polyester fiber. But he feels that by 1970 this situation will be reversed. Durable press garments, he believes, will be the major factor behind polyester's increased consumption. Consumption of rayon in 1970 will reach 1.2 billion pounds, compared with the 1.1 billion pounds consumed in 1965. Dr. Powers says that for a time rayon acetate seemed to have reached a peak and was being replaced by newer synthetics. But, with the advent of improved rayons, especially the high-wet-modulus types, rayon is now staging a comeback in blends. And it has not lost the original equipment tire-cord market. Tire Cord. Dr. Powers expects rayon to lose out somewhat in the filament yarn business, which is heavily affected by the tire-cord market. Consumption of rayon filament yarn will drop from 436 million pounds in 1965 to 300 million pounds in 1970. However, during that time, consumption of nylon will jump from 780 million pounds to 1.1 billion p o u n d s evidence of its increasing penetration of the tire-cord market. Dr. Powers says also that the role of new finishes may become less and less important. In 1925, when there were four fibers—cotton, rayon, silk, and wool—the problem was to modify these fibers to get a range of properties. But by 1945 it was evident that new and better fibers could be built to satisfy any really important largevolume market. "Today," Dr. Powers says, "a synthetic exists that is superior to any natural fiber in any important quality." No really new fiber introduced after 1965 will make a profit by 1975, Dr. Powers contends. There are too many problems involved—spinning, dyeing, weaving, pricing, and, finally, selling the new fiber. However, he says, with 14 classes of fibers to blend and to modify mechanically and chemically, imaginative designers will have enough to keep them busy, not for 10 years, but for 50. 28

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11, 1966

MCA Defends Dual Distribution System Proposed legislation would cause serious harm to chemical industry Bills designed to correct the problems of dual distribution at the retail level could cause serious harm to the chemical industry. As Monsanto's Edwin J. Putzell, Jr., appearing on behalf of the Manufacturing Chemists' Association, told the Senate antitrust subcommittee: "We submit that competition within the chemical industry is as dependent on dual distribution as are the industry members dependent on one another as a source and outlet for chemical products. The proposed legislation, therefore, threatens the jugular of chemical industry competition." A producer who sells a product to an independent firm and who also sells the same product to the same customers as the independent is engaged in dual distribution. Problems arise when the producer, through devices unavailable to the independent, sells at a lower price than the independent. The subcommittee is considering three bills, all introduced by Sen. Russell Long (D.-La.), which are designed to maintain competition in dual distribution situations. S. 1842 would prohibit vertically integrated companies from engaging in discriminatory practices against independent producers and distributors. S. 1843 would require companies engaged in dual distribution to disclose separate annual operating data on each of their establishments. S. 1844 would prohibit vertically integrated companies from engaging in anticompetitive pricing. According to Mr. Putzell, most of the problems connected with dual distribution occur at the retail level. He points to hearings on similar bills in the House at which "at least 90 rA of the complaints had to do with dual distribution of an end product to the detriment of independent retailers." The problems considered did not extend back into the processing and intermediate product stages. These bills cover every economic activity involving dual distribution and thus encompass far more than the alleged areas of harm, he says. In the chemical industry, there is a complex interdependency of products, by-products, and coproducts. This

Edwin J. Putzell, Jr. Legislation threatens competition

requires companies within the industry to be both customer and competitor of one another. Most companies must buy starting materials—primary chemicals or intermediates—from their competitors. "The chemical industry is a massive personification of dual distribution. Dual distribution may or may not be harmful to individual competitors at the fabricating, wholesaling, and retailing market levels, but it is clear that it is essential to the life blood of competition in the chemical industry," Mr. Putzell says. There are other flaws in the proposed legislation. For example, Mr. Putzell points to the reporting requirements of S. 1843. These reports would reveal far more than is usually revealed to competitors and third parties. "Such matters as specific costs, profits, and capital investment data have traditionally been regarded as within the most vital area of the trade secret spectrum," he says. "Manufacturers must keep cost information secure to ensure arm's length negotiations in the market place." In MCA's opinion, the proposed legislation would seriously threaten the economic benefits which flow from hard competition at all levels of the market place. As the hearings came to an end, Sen. Philip A. Hart (D.-Mich.), chairman of the subcommittee, opined that the chemical industry because of its peculiar nature might be exempted from the legislation. However, he sounded more confused than convinced.

Big Engines in Autos Aid Phosphorus Market 151ST

ACS

NATIONAL

MEETING

Chemical Marketing and Economics Today's booming market for cars with high-performance engines is opening up a bigger market for phosphorusbased fuel additives to combat engine lead deposits from use of premium gasolines. Paul E. Levesque of the commercial development department at FMC Corp. projects a 12 million pound increase per year over 1965 in the use of phosphorus fuel additives by 1970. This would represent a total of 35 million pounds of additives a year requiring 3.5 million pounds of elemental phosphorus. Last year, a total of 23 million pounds of phospho­ rus additives were used. The demand for more powerful en­ gines is in sharp contrast with the situ­ ation prevailing only six years ago. When compact cars with their lower compression engines were in demand, the need for phosphorus additives de­ clined. The automobile situation has since reversed with a resulting larger demand for phosphorus additives. The additives lower lead deposits on spark plugs caused by the decomposi­ tion of tetraethyllead. The lead de­ posits glow at high temperatures and prematurely ignite the gasoline. The motorist recognizes preignition as "wild ping," "rumble," or knock. Neither auto engineers nor chemists understand how phosphorus-based en­ gine additives reduce lead deposits. But they know that they work and that they have a growing market. Five companies produce phospho­ rus-based additives. FMC, Mobil, and Monsanto make cresyl diphenyl phosphate; Ethyl Corp. makes trisβ - (chloroisopropyl)thionophosphate, mixed methyl-phenyl phosphates, and trimethyl phosphate. Stauffer makes cresyl diphenyl tricresyl, and trischloroethyl phosphate. Mr. Levesque points to four vari­ ables that stimulate growth of the mar­ ket for these additives: total gasoline sales, grades of gasolines, amounts of phosphorus added, and the TEL use levels. Higher compression engines bring about a need for higher octane fuel. Higher octane fuel usually means more lead, which, in turn, means a need for more phosphorus additives.

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BORON-NITROGEN CHEMISTRY ADVANCES IN CHEMISTRY SERIES 42 which contains thirty-two papers presented at the Boron-Nitrogen Chemistry Symposium sponsored by the U. S. Army Research Office —Durham. These papers contain contributions from many subdisciplines of chemistry and emphasize the close collaboration of classical chemistry with advanced techniques and modern the­ oretical treatments. Laubengayer's synthesis of B-trichloroborazine, which tended to replace high vacuum techniques by more classical approaches, and the use of spectroscopy as a tool for explaining structures and mech­ anisms, stimulated by the work of Goubeau and his school, are two major advances which have influenced the growth of research in boron-nitrogen chemistry. Both of these leaders along with M. F. Lappert, W. N. Lipscomb, M. Kubo, and M. J. S. Dewar are repre­ sented. Principal topics discussed: Amineboranes and related compounds, 6 papers; physical chemistry of aminoboranes, 4 papers; preparative aspects of aminoboranes, 5 papers; pseudoaromatic B-N compounds, 6 papers; general B-N chemistry, 11 papers. 330 pages, cloth bound $7.50 postpaid in U. S. and Canada; plus 20 cents foreign and PUAS.

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Armour Agricultural Chemical Co. has two new plants in Chicago Heights, 111., and Baltimore, Md., for its lightweight lawn and garden fertilizers. The two plants cost more than $500,000.

Weyerhaeuser Co.'s Longview, Wash., branch of its pulp and paperboard division plans a $10 million expansion of chlorine and caustic soda production facilities. The expansion, which will increase chlorine production from 150 tons per day to 270 tons, is scheduled to be in operation by late 1967.

Heyden division of Tenneco Chemicals plans to expand facilities for benzyl chloride and benzaldehyde at its Fords, N.J., plant. The expansions should be completed by the second quarter of 1967.

Canadian Helium Plant to Triple Capacity Canadian Helium, Ltd., of Canada will have tripled its capacity for helium to 36 million cubic feet annually by next January. The plant of Canadian Helium, near Swift Current, Sask., is the only producer of helium in the western world outside of the U.S. The contract for the additional facilities has been awarded to the engineering and construction division of Canadian Liquid Air, Ltd., of Montreal. Canadian Helium, which exports to many countries, is jointly owned by British American Oil, British Oxygen Co., Ltd., of London, and l'Air Liquide of Paris.

BRIEFS Two sulfur producers have increased transportation and terminal charges for sulfur by $1.00 to $2.00 a ton. The exact amount of the increase depends on terminal and customer location. The increase comes from Texas Gulf Sulphur and Freeport Sulphur, but not from Pan American Sulphur and Gulf Sulphur, who increased their price for sulfur in February by $5.00 a ton. Effective date for the terminal and transportation charge increase depends on the dates of expiration of customers' contracts.

Norton Co., Worcester, Mass., will acquire the principal assets of United 30

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1966

States Stoneware Co. and all of the stock of Chamberlain Engineering Corp. U.S. Stoneware is a major supplier of ceramic, metal, and plastic tower packings; Chamberlain produces a wide range of plastic products.

NEW FACILITIES Michigan Chemical plans an 80% expansion of its magnesia capacity at St. Louis, Mich. Cost will be $1.9 million. The company is also expanding capacity of its St. Louis and Manistee, Mich., bromine plants. At Port St. Joe, Fla., it is building a semiworks plant to test a new process for making magnesia.

jGeneral Aniline has broken ground for its new multimillion-dollar, high-pressure acetylene chemicals plant at Texas City, Tex. The plant, which will be completed in the fall of 1967, will produce propargyl alcohol, butanediol, butyrolactone, pyrrolidone, and polyvinylpyrrolidone.

Chemplex Co. is building an office and research center at Rolling Meadows, 111. The building will headquarter the departments of finance, marketing, engineering, production, and research. Chemplex is a 50-50 joint venture of Skelly Oil and American Can that will make olefins and poly olefin resins.

FINANCIAL Allied Chemical has filed a registration statement with the Securities and Exchange Commission covering a proposed offering (C&EN, March 28, page 25) of $150 million principal amount of debentures, due Nov. 1, 1991. Allied says it will use the proceeds of the sale of the debentures for spending on new plants and for additions and improvements to existing plants and facilities.

American Petrochemical Corp., Minneapolis, Minn., had record sales of $6,591,949 for the nine months ended

Tenneco doesn't stop here. Even after we've finished our job on the rubber, we're still on the move. With research and product assistance. After all, it's only logical: build a better catalyst, emulsifier, solvent, tackifier, coagulant, acceler­ ator, mold release, external lubricant or internal lubricant and the rubber industry will stretch a path to your door. And the door at Tenneco is always open. Because we're always working. Tenneco Chemical Divisions and Subsidiaries active in the rubber industries include: Hey den, Newport, New York Color, Nuodex.

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Feb. 28, 1966. This is an increase of more than $1.5 million over sales in the like period ended Feb. 28, 1965. Net income totaled $313,136 (or 28 cents a share) compared with $204,875 (or 20 cents a share) in the comparable nine-month periods.

Need compounds between bench-top and tank-car quantities?

l,3-Bis(p-fluorophenyl)-l,3-propanedione FC6H4COCH2COC6H4F 4-(Iodomethyl)-2,2-dimethyl-l,3-dioxolane (CH 3 ) 2 COCH(CH 2 I)CH 2 Q

INTERNATIONAL FMC Corp. has acquired an interest in Foret, S.A., a producer of basic inorganic chemicals in Spain. Foret makes peroxygen compounds, silicates, phosphates, and other chemicals used in the production of detergents and other products.

Farbwerke Hoechst has completed the first stage of its synthetic fibers complex at Bad Hersfeld, West Germany. The first plant is a $15 million polyester fiber unit. Construction on two additional plants has started—one for technical polyester fiber filaments, and one for textile finishing. They will be completed this year. Hoechst plans to have the complex completed by 1971.

Polyolefins Industries, Ltd., a joint venture of West Germany's Farbwerke Hoechst, A.G., India's National Organic Chemical Industries, Ltd.,

and other Indian partners is building a plant near Bombay for the production of Hostalen, a high-density polyethylene. The new plant, which will have a capacity of 24,000 metric tons a year, will begin production in mid1967.

Polymer Corp., Sarnia, Ont., has completed expansion of laboratory facilities and staff in its latex market development section. The new labs double service available for new development and applications for carboxylated styrene-butadiene products being made through an agreement between Polymer and Sinclair-Koppers.

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If we haven't yet hit a certain compound you can't get from a bulk producer in the quality you need, get in touch with us. Our facilities for producing hard-to-find compounds in quantity haven't stopped improving since 1919. This week we start supplying the ones above in laboratory quantities. We could scale up fast. Distillation Products Industries, Rochester, N . Y . 14603. Phone (716) 458-4080. (Division of Eastman Kodak Company)

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Ceilcote Co., Cleveland, Ohio, will open a plant in Mexico City, Mexico, in May to make reinforced plastic process equipment and corrosion resistant materials. Ceilcote expects to announce the opening of its first European plant later this year.

ALUMINUM CERIUM · COBALT

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APRIL

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1 1 , 1966

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