The Chemical World This Week
CHEMICAL EARNINGS TO BE EVEN HIGHER THAN EXPECTED Business continues to be good for chemical producers. That's the message that security analysts have been hearing recently from industry executives, several of whom are revising upward already optimistic forecasts for sales and earnings this year and are cautiously looking for continued growth through 1975. "At this point, our June forecast of 1974 earnings per share in excess of $5.25 appears to be a conservative one," Diamond Shamrock president C. A. Cash told security analysts in San Francisco late last month. (The company netted $2.67 a share last year.) "Product demand is strong across the board," he adds. "In fact, in many cases we lack the capacity to satisfy it." Major expansions of the company's chlorine-caustic soda and polyvinyl chloride capacity are expected to add about $68 million to next year's sales, output of a new chloralkali plant to be completed next year near Houston is already sold out, and PVC customers are on allocation. Agricultural and specialty chemicals also will do well for the company through 1975, according to executive vice president W. H. Bricker, with operating profits from that line this year expected to be double those of 1973. And operating profits from specialty chemicals, he adds, should more than triple this year, despite raw material shortages. Koppers president Douglas Grymes is similarly cheerful. He told security analysts in Minneapolis that Koppers expects to report third-quarter earnings double the $1.72 a share it netted in last year's like period. Improved prices and increased capacity utilization are more than offsetting rising costs, he says. And he adds that he is optimistic about his company's major segments of business, where "demand is quite good, prices appear to be firm, and backlogs are high/" In Detroit, Vulcan Materials president Bernard A. Monaghan told analysts that Vulcan's earnings for the 12 months ended Sept. 30 probably will be $5.50 a share, up 52% from the year before. And the company expects sales and earnings to continue to improve next year. 4
C&ENOct. 7, 1974
Speaking to security analysts in Philadelphia last month, Allied Chemical vice president Walter H. Sykes said that this year's sales and earnings are up for all major product areas, with strong gains for chemicals somewhat eclipsed by even higher gains in both energy and fiber product areas. Earnings from agricultural chemicals are particularly strong, he says, thanks to rising prices due to a worldwide fertilizer shortage. Allied's major capital expenditures are presently in the energy area, including oil and gas field exploration and development and participation along with General Atomic in a major nuclear fuel reprocessing facility being built at Barnwell, S.C. In chemicals, major expenditures include further expansion to 2.2 million tons per year of its soda ash mining and processing operations at Green River, Wyo., and a major caprolactam plant expansion at Hopewell, Va. Overall, Allied chairman John T. Connor expects earnings for the first three quarters of 1974 to rise to $4.50, a 73% increase over the same period last year, despite a switch to the last-in, first-out method of accounting for inventories. (Koppers is considering a similar accounting switch.)
Small science role at inflation summit Manufacturing, materials, and energy; health services; and agriculture and food are three areas in which science and technology have the greatest potential leverage for helping to combat inflation. This was the thrust of the threeminute presentation allowed Dr. H. Guyford Stever, Presidential science adviser and director of the
National Science Foundation, during President Ford's day-and-a-half summit on inflation. His comments were a distillation from a hastily called minisummit on science, technology, and the economy held Sept. 18 in Washington, D.C. In short, Dr. Stever said that in manufacturing, technology can be used to enhance productivity without inflation. Specifically, he said that this could be done by only funding research and development programs that have the "greatest leverage on obtaining significant productivity improvements," and by removing institutional barriers and worker resistance to technology. Other opportunities for improving industrial productivity include application of new processes that reduce costs by using less capital, energy, and materials. In the health care area, Dr. Stever again focused on productivity improvement. He suggested treating health care as a "system for delivery" and added that creation of health care institutes, regional centers, and other centralization techniques would provide modern medical technology at a lower cost to the public. In the agriculture and food area, Dr. Stever noted "phenomenal" productivity resulting from the use of biological and chemical knowledge and "ingenious machinery" and called for continuing the trend. He called for similar efforts in other areas of the food system, particularly in food preservation, distribution, and marketing. Wrapping up his remarks at a time when Mr. Ford was not attending the conference, Dr. Stever said, "Mr. President, in short, we recommend that every piece of legislation and every executive action be examined beforehand to be sure that it does not impede and indeed encourages the generation and use of beneficial technology. And Mr. President, finally you and the Congress must ensure that we continue to excel in science so essential to the long-range economic well-being of the nation."
Three areas in which science and technology can help fight inflation
