### March 18 , 2014

Director Wendy Cleland

- Hamnett

U.S. Environmental Protection Agency

Director

— Office of Pollution Prevention and Toxics 1200 Pennsylvania Avenue, N.W. Washington, DC 20460

Dear Director Cleland

- Hamnett :

I had the privile ge of discussing with Mr. Hiroshi Dodohara the potential opportunity for Nation Ford Chemical (NFC) to import Chloranil (CAS # 118

- 76

- 2) and extremely appreciate his help. Currently, under the Dioxin/Furan Test Rule (D/F T est R ule) which is codified in Title 40 CFR 766, it requires extensive, pre

- approved testing before Chloranil can be imported. The intent of this test rule was for the EPA to gain enough technical knowledge to be able to produce a Significant New Use Rule (SNUR) for Chloranil. Based o n the information supp lied by the current importers as well as discussions with various end

- users of Chloranil in the early 1990s , the EPA determined that one manufacturing process produced dioxins at extremely low levels. At that time, the EPA deemed tha t Chloranil produced in this manner

would be called “ L ow D ioxin Chloranil (LDC) ” and that the maximum concentration o f dioxins would be 20 ppb TCDD TEQ. Each existing US Chloranil consumer at that time signed a

M emorandum of U nderstanding (MOU) that he wo uld consume only LD C. NFC , under its previous name RM Industries, signed this MOU

.

In the case of NFC’ s consumption of Chloranil, our company historically has converted this

raw material into crude P igment V iolet 23 (PV 23). However, in 2006 NFC stopp ed using

Chloranil as the primary manufacturing route to mak e PV23 and

, in 2007

, started converting a downstream intermediate, Dianil (CAS # 80546

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- 9) , into PV 23. This is the primary way that we synthesize the crude pigment today

. However, d ue to the ever increasing cos t pressure arising from the Far East , NFC is in serious jeopardy of losing the PV 23 business

which is a very significant part of our operations. From this pressure, NFC is reviewing all options to help us remain competitive and in bus iness . One such option is for NFC to import

Chloranil to be used to manufacture PV 23 as our primary synthesis route

. Changing m ar ket

conditions now make it possible for NFC to convert the Chloranil to PV 23 in a more efficient

manner than sta rting with Dianil. This action will move jobs from China back to the US. It will create 5 jobs in our local economy and will save an additional 6 position s ! Moreover, the return to using Chloranil will help NFC continue to operate as a going concern just as it ha s done so for over 35 years. If our company were to cease to exist, not only would our approximately 90 employees become unemployed, but also several contractors and local support companies could fail as a direct result. In addition, NFC is a very strat egic partner to

the US Military in the area of smoke dyes for the M18 grenades. In fact, NFC is the only company able to supply this very important material to our military. For these reasons , NFC ’sChloranil

March 18 , 2014
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being able to import Chloranil is very important to our local economy as well as to our national

defense.

NFC identified two manufactures of LDC Chloranil in China several years ago . These manufactures are Jiangyin Yuhua Chemical Co., Ltd. and Xiangshuixian Yuanda Chemical Co., Ltd. Jay Dickson, NFC’s President

, has recent ly visited e ach manufacturing site while

he was in China in September 2013 . Both of these manufacturers currently supply Chloranil to the Chinese manufacturer of Dianil which NFC uses to make PV23. Both suppliers routinely test for dioxins using SGL in G ermany

, and all of the tested lots are always at least one order of magnitude below the required maximum of 20 ppb TCDD TEQ.

In the Test Rule regulations, spe cifically in 40 CFR 766.32 (a) (2) (ii), the regulations allow for a waiver from testing if “ in t he judgment of EPA, the cost of testing would drive the chemical substance off the market, or prevent resumption of manufacture or import of the chemical substance, if it is not currently manufactured, and the chemical substance will be produced so

that no unreasonable risk will occur due to its manufacture, import, processing, distribution, use, or disposal. (In this case, the manufacturer must submit to EPA all data supporting the determination.) ”

.

The scenario proposed in the above regulation could not be more applicable to the Chloranil situation at NFC. To conduct the required testing under the strict requirements of the Good Laboratory Practices (GLP), the cost is estimated at well over $200,000. However, failing to receive approval to i mport Chlora nil will prevent the manufacture or import of this chemical

substance unequivocally

. Moreover, since the two Chloranil manufacture r s that NFC would like to use are already supplying their product to the Dianil producer in China, there is no

unreasonable r isk due to its use. Additionally, NFC already uses Chloranil from Clariant when we start from this route which means that NFC knows how to properly handle Chloranil ; all of these Chloranil sources (Clariant, Yuhua and Yuanda) are LDC forms of Chloranil

. Last, the only major use of Chloranil in the US is the manufacture of PV 23 at our site , so the exposure to the environment is mostly limited to our Fort Mill, SC facility. This situation also illustrates another important fact. Currently, the Clariant s upplied material, which is synthesized in India, is the only approved source of Chloranil for the US market . If this source were to become unavailable, the supply of PV 23 could be affected. If this shortage were to occur, extreme disruptions would be cr eated in the ink, paint and plastic supply

chains.

NFC does believe that testing is important, and NFC conducted rigorous testing of 3 random

lots (computer generated picks) of Chloranil produced by Jiangyin Yuhua in 2005 using a sophisticated , well train ed US la b

— A nalytical Perspective s

— in Wilmington, NC (now part of SGL). This lab has extensive experience in Dioxin testing. After completion of the testing, a
400 + page report was prepared by Analytical Perspectives. This report listed the test results

for all 3 lots to be well below the maximum limit. The actual results of the three lots were

0.137 , 0.122, and 0.132 ppb TCDD TEQ; the testing summary is attached.

If we cannot receive a waiver from the D/F Test Rule

, then we request that the proposed

S NUR be finalized. Originally, this SNUR was proposed in 1993 and now

, 20 years later, the final rule has not been promulgated into law even though the EPA in 2001 accepted the final

test rule data. The most recent update in 2011 in the Federal R egister s tates that the EPA is working on formulating the final rule. The Color Pigments Manufacture r s Association, Inc. (CPMA) has made this same request based on the fact that PV 23 could be imported into the US made from high dioxin Chloranil (HDC). Currently, there is no law that prevents a non

-Chloranil

March 18 , 2014
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signatory of the MOU to manufacture PV 23 using HDC and then import the PV 23 into the US. Passing the proposed SNUR would prevent this from happening as well as help NFC to

continue to manufacture PV 23 in an environme ntally responsible fashion at a competitive

cost.

We appreciate you r conside ration of this request and understand that all levels of government

are bei ng force d to do more with less money, resources, time and people . This fact is true for

small business es all around the country as well . In fact, this reality is the reason for this
request. NFC is constantly trying to find more efficient ways to synthesize materials. Not only does this efficiency help us financially, but it assists us to be better ste wards of the environment. In particular, we have discovered that we can increase the yields dramatically if

we start with Chloranil in lieu of starting with Dianil. This means that less natural gas will be burned, less waste will be generated, and fewer emissions will be release d per lb of PV 23 produced

— all factors that positively a ffect both economics and the environment.

If you have any questions or concerns regarding this request , please contact me at your

earliest convenience

.

Sincerely,

Phillip McCarter

Vice President

encl: chloranil sampling results

cc: Jay Dickson, Nation Ford Chemical John Dickson, Nation Ford Chemical Steve Schmidt, Sun Chemical Hiroshi Dodohara, US EPA