finished rather than bulk products. Additionally, Monsanto has a merchandising division which promotes the sale of such consumer products as All detergent, Krilium soil conditioner, Folium water-soluble fertilizer, D-Leet selective lawn herbicide, and Bogey multiple-purpose pesticide-fungicide. • Chemstrand. Monsanto is also a substantial consumer of ammonia, Merger will produce company with sales of $ 5 0 0 principally through its associated company, the Chemstrand Corp. which will million; identity o f interest covers broad fields have an annual ammonia requirement of approximately 39,000 tons after comA N ALL probability, stockholders of to combine Monsanto phosphorus and pleting its nylon expansion t o a capacLion Oil Co. and Monsanto Chemical Lion ammonia into concentrated ferti- ity of 88 million pounds. I t is b e Co. "will agree on Sept. 2 3 to a merger lizers which can b e marketed in solid lieved that the greater part of that requirement is supplied by other proof the two into a single corporation or liquid form. having total assets of approximately Monsanto is a major producer of in- ducers than Lion. The stockholders' notice provides a $550 million and a current annual sales secticides, herbicides, and other agrivolume of about $500 million. Each cultural chemicals, and will shortly current statement of Chemstrand's share of Lion's capital stock will b e formulate and sell these products under financial position. The nylon plant was changed into one and one-half shares of the Monsanto label. Lion sells sub- completed on Jan. 3 1 , 1955, although Monsanto stock, so that the surviving stantially all its production of prilled operations had begun on a limited scale corporation will have outstanding 20,- ammonium nitrate, nitrate solutions, almost a year earlier. As of Dec. 3 1 , Chemstrand had an accumu488,270 shares of common stock, a and ammonium sulfate to fertilizer 1953, small preferred issue of 150,000 shares, manufacturers, while anhydrous am- lated deficit of $15.3 million, repremonia is sold both for agricultural use senting start-up costs of which some and funded debt of $142,950,000. • Reasons for Merger. The notice in direct application and to industrial portion may b e attributed t o the product difficulties with Acrilan. During of special meeting sent to all stock- users. It follows that the new company will 1954, a further loss of $2.3 million was holders oudines several obvious reasons for the merger, as: to facilitate develop- have broad representation in the agri- incurred as costs exceeded sales of alment of new products; to provide a cultural chemical and fertilizer fields most $35 million, so that the accumuwider diversification of products; and t o and may be expected to further that in- lated deficit increased to $17.6 million. combine financial resources. Over and terest by moving into the manufacture Chemstrand turned t h e corner in late above these advantages, however, spe- of ammonium phosphate, presumably summer last year, however, and for the cific reasons for the merger would in- using electric furnace phosphoric acid, first six months of 1955, sales of $ 4 8 clude the ability of the new company and by emphasizing the distribution of million produced a profit of $14.3 mil-
i
BUSINESS
Monsanto-Lion Oil Merger
F
2X^7 C&EN CHARTS
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JFEfQiC E S S
INOUSTRII fT^EMOS I I 1 1 1 1 Î I I 1 I I I i 1 I i i I I I I I 1953 1954
1955
VEGETABLE OILS
CIGARETTES
NEW CONSTRUCTION
Factory Consumption of Crude Oils, Millions of Pounds
Consumption, Use of Tax-Frt And Tax-Paid, in Billions
All Types Billions of Dollars
50 40
.
lJIIV
— •JUNE38.4
20.
I I I I I I I I I I I 1 I I I I I I I I I I I I
1954
3834
C&EN
SEPT.
12, 1 9 5 5
1955
1954
1955
lion not subject to income taxes. As of July 3, 1955, the accumulated deficit was reduced to $3.3 million, and at this writing, it has proba"bly vanished altogether. Gross profit revealed in the six-month statement equaled $27.3 million before depreciation, or 57 °fo of sales, thus indicating the remarkable profitability of nylon. • Further Reasons. Along with the community of interest in agricultural chemicals and fertilizers, petrochemicals are the cement that bind the two companies. Lion comtributes not only its resources in the field of petrochemicals but also crude o i l and natural gas reserves available from its properties, totaling 88 million barrels and 237 billion cubic feet, respectively. Lion's stockholders were told that Monsanto's research could be counted on to take advantage of Lion's basic petrochemicals position. Implications of this statement are fairly hroad, but it serves to emphasize the importance of ammonium phosphate i n planning the integration of the two companies. Quite possibly, Monsanto plans other industrial uses of ammonia and certainly expanded use in the manufacture of acrylonitrile. For several years past, Monsanto has surveyed numerous possible sites for ammonia plant construction, but probably determined that the return on a new plant investment was not attractive versus the low cost position of depreciated wartime ammonia plants, as Lion's El Dorado, Ark., plant. With the new ammonia plant a t Luling, La., Lion has an investment at original cost of about $50 million in ammonia and derivative products; replacement cost would perhaps exceed $80 million. • Scope of Combine. For some years, Monsanto has broadened its operating scope by integrating backward to the production of its own raw materials (half of which are natural gas and petroleum fractions), and forward into the marketing of consumer products. The merger with liion advances this program through securing a petroleum raw material base a s well as Lion's expansion program in direct marketing facilities for such refined products as gasoline. It reinforces the trend today toward conversion of greater amounts of petroleum hydrocarbons into chemicals; it introduces Monsanto t o the petroleum additives field through Lion outlets for such chemicals as TCP; it broadens Monsanto's .interest in the fields of agricultural chemicals and fertilizers; it neutralizes t h e economic threat posed by oil company invasion of chemical markets, utilizing hydrocarbons priced into chemical plants at waste values; it provides Monsanto with another raw material at low cost and the opportunity to exploit the use of ammonia.
Here's money-saving news from the laboratory of a major west coast r e f i n e r y * Di-tertiary-butyl-para-cresol is the most economical, most effective antioxidant for use in both regular and premium gasolines. That's the conclusion reached by the research department of a west coast refinery after several years of exhaustive tests on various types of gasoline inhibitors. This outstanding additive actually prevents the formation,.of gum in gasoline, resulting in a cleaner gasoline and a cleaner engine. In addition, production costs can be considerably reduced by diverting distillates to less expensive and less severe finishing operations, since ditertiary-butyl-para-cresol c a n be added early in the process to gasoline streams before the unstable components come in contact with air. This insures the maximum protection at least cost. Further protection is afforded in that it effectively retards deposit formation in the automotive engine. Koppers is a r>ajor manufacturer of di-tertiary-butyl-para-cresol, which is sold under the trade name of dbpc.® dbpc is available in two grades:
TECHNICAL GRADE—
finds additional application as an economical antioxidant in aviation fuels, transformer oils, lubricating oils, plastics and rubber. FOOD GRADE—
protects foods containing fats and oils from rancidity due to oxidation. Effectively stabilizes these edibles in texture, odor, color and flavor for as little as 1 part dbpc to 10,000 parts food product. Also finds use in food packaging materials. •'Name supplied on request
KOPPERS C O M P A N Y , I N C . Chemical Division, Dept. CEN-95, Pittsburgh 19, Peimsyhrania
KOPPERS
Koppers Chemicals SALES OFFICESx N E W YORK · BOSTON · PHILADELPHIA ATLANTA · CHICAGO · DETROIT · HOUSTON · LOS ANGELES
SEPT. 12.
1955
C&EN
3835
