ideal for use in fabricating large laminated beams and arches for exterior service and in marine applications. They are also used in making sports equipment. Resorcinol has a large number of miscellaneous uses which represent about 25 to 30% of the market. It can be used in making direct, mordant, basic, and acid dyes. Some of these appear in rouge, lipstick, fingernail polish, and in food, drug, and ink colors. With a new, small producer battling against a large, established one, pinning down capacity figures becomes a delicate problem. Neither Koppers nor U.S. Pipe wants to talk about capacity. Koppers, however, admits that its capacity at Petrolia is "substantially in excess of 15 million pounds a year." As a guest at the formal opening of the U.S. Pipe plant expressed it: "Would you believe 20 million?" Combining that figure with U.S. Pipe's capacity would bring the total to 24 million pounds a year. The worldwide market for U.S.-made resorcinal is about 25 million pounds a year. The U.S. is a net exporter of resorcinol. Most of the resorcinol exported by the U.S. goes to Europe, but a good deal of it also goes to Canada (which has no plant of its own).
R&D managers claim efficiency for precise budget controls U.S. companies are creating more precise budgetary controls for R&D departments in a time of increasing federal and managerial concern about the return of research and development on investment. Complexity and efficiency of these R&D programs absorbed chemical, electronics, metals, and other R&D managers at a seminar of the American Management Association in New York City. How much income can a company expect per dollar of research? Conferees state the answer to this ultimate question is still a guess at best and meaningless figuring at worst. Still, speakers spread out forms and graphs to show how planning and accounting lead at least to administrative efficiency and tax gains, if not as yet to mathematical project evaluation. Basis for the often controversial R&D accounting procedures was spelled out by A. J. Gallantier, manager of accounting and administration at Mobil Oil's research department. Prime tool in R&D direction, Mr. Gallantier points out, is control on amount and application of funds. In turn, the basis of such control is adequate cost data assigned to individuals and individual projects. 14 C&EN JUNE 26, 1967
Mobil's Gallantier Control the funds
Among the most thorough R&D budgets is IBM's system, outlined by John H. Stewart, manager of budgets and contracts of the company's research division at Thomas J. Watson Research Center, Yorktown Heights, N.Y. At IBM, distribution of hours worked by all research personnel allow weekly figures on actual vs. planned research cost. IBM can give a complete report comparing real expense with allocation within three days after the end of a given month. Less mechanized R&D administrations require up to 15 days. At Mobil, research now uses a real cost system of accounting for research with actual costs assigned to coded "cost centers" (programs and projects). Until this year, the company computed a standard hourly cost rate for each of 40 functional units and multiplied project hours by this rate to figure project cost. Change at Mobil allows fuller justification for tax deductions on research charged to international operations. Among chemical executives at the seminar, Dr. Oscar H. Johnson, FMC chemical vice president and research director, also sees greater controls on research through automated accounting. FMC, like Mobil, is aware of tax benefits. RCA's Edwin E. Moore, business deputy of light communications equipment engineering, says RCA's colorcoded financial report system has greatly reduced financial problem areas and project loss variance since the first full reporting month in late 1962. RCA's monthly report comes in chart form with red blocks for problem areas, yellow for possible problem spots, and green for satisfactory operations. This highly focused planning and
reporting has intensified what Dr. Earl E. Patterson, executive assistant to the executive vice president for research and development at Reynolds Metals, calls the philosophical battleground between research freedom and research control. Mr. Stewart sees the problem as one of professional contradictions which both research men and accountants must accept. Finance people find that classic rules of input-output don't apply in R&D, and technical personnel see that fiscal control must accompany millions of company dollars carried largely as corporate overhead. Actually, Mr. Stewart foresees, future computerized R&D financial systems should lead to budgetary flexibility instead of rigidity. Possible innovations could include a remote terminal computer to speed budget revisions.
Toyo Koatsu, Mitsui Chemical plan Japan's biggest merger Japan's biggest chemical merger to date—between Toyo Koatsu Industries and Mitsui Chemical Industry Co.— was agreed to in principle by the firms' presidents last week. Details have yet to be worked out, but the merger will take place either in 1968 or 1969. Toyo Koatsu is capitalized at about $36.5 million, Mitsui Chemical at about $24.5 million. Total sales of the two firms together are about $260 million, split almost evenly between the two. According to current sales figures, the new company would rank third in chemical sales in Japan after Mitsubishi Chemical ($292 million) and Sumitomo Chemical ($276 million). Merger talks involving the two Mitsui group firms, as well as other Mitsui companies, have been under way for years. A Toyo Koatsu spokesman says integration of Mitsui Petrochemical into the Mitsui Chemical combination may be destined "for the far future," and inclusion of Toyo Rayon in the "remote far future." Toyo Koatsu is a leading chemical fertilizer producer. It makes various industrial chemicals and plastic resins and has exported its urea plant technology worldwide. The company has a joint venture with American Cyanamid, called Toyo Cyanamid, for manufacturing melamine. Mitsui Chemical's products include an extensive line of plastics and industrial chemicals. The merger fits in with a general trend among Japan's chemical companies to increase their scale of operations and to streamline their organizations to strengthen positions in competing with foreign firms.
