P.1 

OAR Box 1872 

Prepped by Keeia Richards 

Document Number: 

18) II-I-67 

Docket Number: 

A-90-19 

Printed 11/26/2008 8:51:49 AM Sheet 18 of 204 
P.2 

AMPACET COtOfl CONCENTRATES PLANT: At T.rT. Haul-, hxJ. The company', n w unit al this 

art* totals 200,000 square '••! and produces color and other additive* lor the plasties Induatry. 

Ampacet Eyes World Market 

With Big Terre Haute Plant 

Ampacet Corporation has dedicated a 

newly enlarged color concentrate plant 

at Terre Haute. Ind., billing it the world's 

largest and expressing hopes to move 

with the new capacity into new markets 

overseas. 

The $20 million expansion at Terre Haute, 

plus previously existing lines at the site, 

gives the facility capacity lo produce 225 

million pounds of color and additive concentrates annually, making Terre Haute by far 

Ampacet's largest production site. 

Existing lines have been at Terre Haute 

since 1972 That older capacity, company officials say. accounts for about 90 million 

pounds of today's nameplate. 

Overall, with the re-dedication of Terre 

Haute. Ampacet now has a worldwide concentrate capacity of 310 million pounds, says 

Martin Fernandi. vice-president for marketing, a figure that reasserts the company's 

position as the world's largest supplier 

Rationalization, however, is in the works, 

as Ampacet officials note the likelihood that 

the company's 30-mlllion-pound Mt Vernon, 

N Y . plant will be shut down Dating from 

1965, Mt Vernon is Ampacet s oldest facility. 

Steps have already been taken to decommission Mt Vernon, including the transfer of 

one of three additive production lines from 

Ml Vernon lo DeRidder. La , where Ampacet 

operates a 2S-million-to-30-million-pound 

plant commissioned in 1977. Plans may call 

for the other two lines lo be shut down permanently. 

Ampacet's other capacity — not subject to 

shut down — consists of the plant it dedicated 

in Messancy, Belgium, in 1986. That 30-million-pound facility is seen as the forerunner 

technology-wise of Terre Haute. 

The Terre Haute expansion incorporate* a 

greater level of statistical process control 

(SPC) than in other Ampacet plants, possibly 

with the exception of Messancy, the company 

says. 

The need for a more high-tech approach to 

concentrate manufacture stems from increased demand for exact specifications in 

concentrate formulations, Mr Fernandi 

says. This is especially the case where the 

highest degree of end-product consistency is 

sought; consumers, for instance, which manufacture diapers or medical films or food 

containers. 

Computerized SPC Terre Haute'a two new 

automated production lines will keep track 

of production, then store data for use later to 

manufacture a virtually identical batch for a 

particular customer 

Officials say the new equipment will be 

able to produce Ampacet's full product line 

when it is operational in October. The company's largest concentrates by volume are 

Continued on Page 32 

Ag Chemicals Group Seeks 

To Ward Off Over-Reaction 

A spokesman for the far m chemicals 

industry has told the House Agriculture 

Committe e tha t i t should consider 

adding innovative technology incentives 

in the agricultural and conservation titles of legislation to reauthorize federal 

far m programs. The committee was 

also urged to avoid "onerous ag environmental provisions." 

Jay J Vroom. executive vice-president of 

National Agricultural Chemicals Association, testified on behalf of the chemical industry as the committee's agriculture panel began deliberations on the 1990 farm bill 

"The agricultural chemicals industry is 

nothing without our farmer customers and 

tiieir customers," Mr. Vroom told the committee "Our industry' recognizes the critical 

need to address environmental and food 

safety issues in a scientific and responsible 

way Those actions are in our interest and in 

all of our ultimate consumers' interests, and 

we understand that many of those environmental issues will be debated in the course of 

the 1990 farm bill evolution." 

Mr. Vroom encouraged tbe committee and 

its constituents to approach the 1990 farm 

bill with a flexible and open minds "We advocate that this committee keep in mind the 

basic essentials of farm production from 

which we benefit today. 

"A recent USDA report showed that yield 

increases resulting from weed control, 

thanks to modern herbicides, for the US corn 

crop is equivalent to 47 percent of tbe national output." Mr. Vroom claimed. 

The NACA spokesman cautioned against 

legislative action that may over-react to perceived ground water problems Fuller investigation may reveal no problem exists be 

said. 

"It would be easy for the 1990 farm bill 

environmental titles to over-react to perceptions," he said. "We need more fact about our 

ground water and the presence therein of 

man-made compounds." 

Mr.Vroom said an example to consider is 

the Big Spring watershed monitoring study in 

Iowa "Early reports on this study were the 

basis of enormous hand-wringing by environmentalists when data collected and reported 

in the years 1982 lo 1985 showed an increasing trend of detection levels of certain agricultural chemicals in ground water at Big 

Spring," he noted. 

"However, when the last three years of 

data were unveiled, the trend was shown to 

reverse, and the preliminary hue and cry was 

muffled." Mr.Vroom concluded. 

A-90-19 

II-I-67 

Cyclohexylamine Seen 

Reaching Fair Value 

Afte r six consecutive quarter s of 

price increases, cyclohexylamine marketers say the product is finally commanding what it is worth, and they are 

now looking ahead to steady growth coupled with some potentially big volume 

new uses. 

After price erosion in tbe mid-1980's, and 

failed increase attempts in 1987, CHA producers were finally able to put through a hike 

April 1 of last year. With the momentum 

begun, five others followed,taking list pricing up a total of 35 cents per pound, lo today's 

11.30 for bulk shipments. 

For much of the past two or three years, 

producers have been plagued by rising costs 

for both possible raw materials-CHA can be 

made from aniline or cyclohexanol. However, what finally worked to their advantage 

was an overall lightening of production from 

the multi-purpose amine units where CHA is 

made: although nominal CHA capacity is 

well in excess of US demand-estimated at 10 

million to 12 million pounds per year-in 

practice, capacity must be shared with other 

amines made in the same facilities 

Producers attribute the tightening largely 

to a sharp increase in demand for agricultural chemicals, many of which are amine 

based, following the drought of 1988. 

However, other specialty amines are also 

taking up plant time. In May, Air Products & 

Chemicals Inc. completed a retrofit of it% 

Pace, Fla., amines unit, allowing It to produce up to 10 million pounds of CHA there via 

the cyclohexanol route This move doubled 

Continued on Page 14 

RUBBER BUSINESS: This II on* of the Import 

derablej for CHA, with a move aimed at reducing possible toxic exposures in synthetic rubber 

manufacture offering potential for CHA-d»rtv»d 

accelerators 

Acid Rain's Adverse Impact 

Assessed for Southern US 

Environmental Protection Agency's 

acid rain researchers Thursday offered 

evidence that if sulfur emissions are not 

reduced in the future, aquatic systems in 

the South wil l suffer damage fro m acid 

rain. Evidence also indicates that reductions in sulfur emissions could improve 

the health of damaged lakes in the 

Northeast. 

"This study makes a compelling statement 

about the future effects of acid rain on water 

quality in the Northeast and the Southern 

Blue Ridge Province." said F. Henry 

Habicht, EPA deputy administrator "The 

scientific data reinforce President Bush's 

proposal to reduce annual sulfur dioxide 

emissions by 10 million tons We encourage 

the Congress, upon its return, to take prompt 

action on the Clean Air Act," he said 

Tbe study, "Future Effects of Long-Term 

Sulfur Deposition on Surface Water Chemistry: The Direct/Delayed Response Project." developed 50-year projections of watershed quality under three plausible acidic deposition, or acid rain, scenarios 

Throe areas wrre studied — the Northeast, 

comprising all of New England and parts ol 

N.Y. and Pa., the Mid Appalachian Region, 

covering much of Pa , Md., Va and W. Va; 

and the Southern Blue Ridge Provlnctf. ao 

area covering parts of NC , Tenn, SC and 

Ga The study Is a key element In tbe closing 

months of the 10-year National Add Precipitation Assessment Program 

Results of the study were made available 

today for the Northeast and the Southern 

Blue Ridge Province Preliminary results for 

tht Mid Appalachian region are presented 

but the final results will not be available until 

next year. 

In the study. EPA examined scenarios of 

decreased, constant, and Increased deposition It is generally accepted that acidic deposition is related to emissions of sulfur dun 

Ide Thus, changes in emissions of sulf ui 

ide will lead lo changes In levels of < 

deposition on watersheds 

EPA measured surfare-water chemistry 

Continued on Page 21 

Mallinckrodt Acquires a Base 

For APAP Business in Europe 

International Minerals & Chemical 

Corporation's Mallinckrodt Specialty 

Chemicals Company has signed a definitive contract with RTZ Chemicals Ltd. 

to acquire RTZ's Staveley p-aminophenol (PAP) and acetaminophen (APAP) 

business unit in Derbyshire, England. 

Terms of tbe acquisition were not disclosed. 

The transaction has been approved by the 

boards of directors of IMC and RTZ and is 

expected to be completed by August 31 

The Staveley plant's primary product is 

p-aminophenol, the key intermediate in the 

production of acetaminophen Staveley. a 

Mallinckrodt licensee, has been producing 

PAP using Mallinckrodt's technology since 

1979. 

Mallinckrodt Specialty Chemicals claims 

to be the leading supplier and low-cost producer in the estimated 1250 million worldwide APAP market In the US, the APAP 

market Is estimated to be $90 million The 

company recently completed a 20 permit 

APAP/PAP capacity increase at its Raleigh. 

N C. facility. 

IMC says acquisition of Staveley's PAP/ 

Continued on Page 48 

LCP Explosion 

Disrupts Solvents 

The LCP Chemicals division of Hanlin 

Group Inc suffered an explosion on August 

20 at Its Moundsville, W Va . chemicals 

plant, leading It to declare force maj> 

chlorinated solvents products until the plant 

is restarted 

No Injuries occurred, and no one outside 

tbe plant was affected. LCP reports The 

plant also produces chlorine caustic tod*, 

bleach and hydrochloric acid, but these products were not involved The solvents that are 

out are carbon tetrachloride, chloroform, 

methyl chloride and methylene e_tf_ 

August 28,1989 CHEMICAt MARKETING REPORTER 
P.3 

/ -•' 
V-»JP.4 

juality... 

ONP) 

(OAP) 

>ion«? Poulenc. 

derivatives. 

>ntact 

emicals. 

X N J 08543 

Ties: 

Alsace , 92400 

O N 610500F 

NC 

AROMATIC ORGANICS 

Cyclohexylamine Continued from Page 5 

tbe company's capacity by matching a 

10-million-pound unit in Wichita, Kan., 

which is based on aniline. 

A spokesman says Air Products' next CHA 

campaign will be at Pace, but that Wichita is 

still very much in the cards for future production, depending on feedstock costs and 

overall plant economics. He notes that the 

availability of Pace frees up Wichita to carry 

out work with specialty amines. 

One industry source says Air Products' 

chief motivation in retrofitting Pace was to 

make room at Wichita for production of bis(-

paraaminoeyclohexyl)methane (PACM), an 

amine intermediate it introduced In April for 

use in polyamide, epoxy and polyurethane 

applications At the time. Air Products said it 

has "multimillion-pound manufacturing capabilities to become a major merchant supplier of PACM ." 

Start-up at Pace also gives Air Products 

the CHA feedstock flexibility its US competitor. Hoechst Celanese Corporation, has in its 

10-million-pound Bucks, Ala., plant. Cyclohexylamine is also supplied by importers 

The predominate importer is BASF Corporation, which also has flexibility at its parent's 

plant in West Germany. 

Other import factors in the US market 

have traditionally been Imperial Chemical 

Industries PLC and Bayer AG. One source 

says that ICI is still a presence "from time to 

tune" but that Bayer seems to have exited 

the market altogether. 

BASF is said to have picked up most of 

Bayer's business, although overall. CHA imports are thought to be down to 15 or 20 

percent of the market from a high of close to 

30 percent three years ago This is attributed 

to the weakening of tbe dollar and the poor 

returns cyclohexylamine was bringing 

GROWTH TRACKING ECONOMY 

On the demand side, CHA's main end usein boiler water treatment-is called stable, 

with growth more or less tracking the economy One producer notes CHA is relatively 

resistant to at least minor recessions, since 

manufactures' boilers must continue to run. 

even if demand for their products is on the 

wane. 

Customers in this market are the water 

treatment service companies like Betz, 

Nalco. Calgon and Drew which formulate 

CHA with other amines into corrosion inhibitor products. Not surprisingly, such companies are considered good stock picks when 

recession fear, arise. 

Boiler water treatment commands about 

two-thirds of CHA output, and while it will 

always provide a stable base for demand, 

producers are looking at developments in 

three smaller end markets for more significant future growth. 

One definite development is the impending 

start-up of a herbicide intermediate plant by 

E.I du Pont de Nemours & Co Du Pont produces and markets the final product, "Velpar," in the US, but. according to sources, has 

been buying a necessary cyclobexylaminebased isocyanate raw material from Bayer 

AG in West Germany. 

Later this or early next year, however, Du 

Pont is expected to begin production of the 

intermediate in the US. based on captively 

produced isocyanate and purchased CHA Although world demand for CHA is not going to 

change, it's expected that the bulk of Du 

Pont's requirement-estimated to be as high 

as 1 million pounds per year-will shift to US 

producers 

US producers are also watching developments in Europe regarding the toxicity of 

some amine-based rubber chemicals. Secondary amine rubber accelerators, including 

morpboline-based ones, bave been under for 

scrutiny for several years as potential carcinogens, and legislation has been set in West 

Germany to phase some of these products 

out 

Alternatives to morpholine accelerators 

are based either on CHA-_pecifically N-cyclohexyl-2-benxothiazole sulfenamide-or oo 

t-butytamine In Germany, moat of the market uses the CHA-based product already, so 

tbe legislation has not had significant impact, says a source. However, in the US. morpholine-based products dominate, and a legislated move away from them could have a 

positive impact on CHA as well as on t-butylamine 

Only BASF produces all three of tbe base 

amines, at plants m the US or West Germany. 

In the US, Monsanto Chemical Company is 

PRICE TRENDLINES 

WEEK ENDING AUG. 25. 1989 

CHANGES/UP 

Non# 

CHANGES/DOWN 

D-xyten*, I'-JC par gal. 

AROMATICS INDEX 

The Aromatic Organics index reflects 

the prices of 14 representative materials 

in this sector and the quantity of each 

produced ini 988. 

Aug. 25,1989 '223.18 

Aug. 18,1989 211.88 

July 28,1989 222.01 

Aug. 26,198 8 209.79 

tla-arta upawad produefcn aguraa rtquiad lor I H i 

Chemie*! Price* Start on Pag, 36 

the only producer of t-butylamine, Air Products makes CHA and inorpholine. and Texaco 

Chemical Company makes morpholine. 

While it's still not known if, when and bow the 

shifting will occur, cyclohexylamine can 

only benefit, producers note 

The third potential market gain is in the 

cyclamate area. Earlier this year Food & 

Drug Adnunstration said it had made a mistake when it banned the artificial sweetener 

20 years ago and that it expects to reapprove 

it sometime during 1990. 

At its peak in the late 1960s, sodium cyclamate, made by Abbott Laboratories, consumed 6 million or 7 million pounds of cyclohexylamine and was growing Producers see 

tbe reapproval as a plus, but don't expect to 

regain this kind of volume. They point out it 

will be bard to reverse two decades of bad 

press and that in the interim, the artificial 

sweetener marke t has become more 

crowded. 

A good portion of US CHA exports, which 

are estimated at 3 million to 4 million pounds 

per year, are destined to cyclamate producers in the Far East, and reverberations from 

reapproval here could have a positive effect 

on those markets as well 

Exports are currently on the weak side, 

one producer says, not because the demand 

isn't there but because high amine plant operatinp rates have made CHA availability 

ing of a problem. When this happens, 

exports are the first market to be cut back 

MICHAEL MCCOY 

BTX — Basic aromatics markets were 

quiet last week. Benzene continued to hover 

around the new $1 -per-gallon contract price 

set for September. "Buyers are offering 99c 

and sellers are asking $1.01." is how one marketer put it 

Toluene showed a little strength, with 

prices edging up over 75c per gallon into the 

upper 70's. Little in the way of mixed xylenes 

sales was reported, with quotes all near the 

August contract price of 87">c. per gallon. 

BISPHENOL- - Shell Chemical Company 

reports thai its 250-million-pound bisphenol 

A expansion at Deer Park. Tex., originally 

scheduled to come on stream early next year, 

is being delayed until the third quarter. 

Tbe expansion would have been the second 

to boost supply in a tight market. Dow Chemical Company has a 100-million-pound increase scheduled lo come on line late this 

year, itself delayed from an originally scheduled mid-1988 startup fCMR. 8/21 89. pg 5i 

Blue-Green Algae; 

Viable AIDS Uses? 

National Cancer Institute scientists say 

several chemicals derived from blue-green 

algae bave proven to be highly active against 

the AIDS virus in test tube experiments They 

say the discovery means a new class of chem -

icals can now be studied for effectiveness 

against the deadly disease 

Tests of the chemicals in humans cannot 

begin until scientists ar e able to make them 

in much larger quantities and assets their 

impact in animal laboratory studies. But Mr 

Michael R. Boyd, head of the N G research 

team, says that because of the urgent need to 

identify new drugs that might have the potential to trea t AIDS, the institute has assigned 

further tests on the chemicals a high pn. 

The new chemicals ar e combinations of 

sugars and fatty acids called glycolipids 

They were derived from algae collected in 

Hawaii and tbe Palau Islands in the South 

Pacific. Dr. Boyd says the glycolipids halt the 

growth of the AIDS virus, but researchers do 

not yet understand how. 

He says the team is "still a long way from a 

drug candidate" because it has tried for a 

year without success lo synthesize tne active 

chemicals A report by tbe NCI scientists was 

published last week in the Journal of Ihe 

National Cancer Institute 

Drug Benefit 

Continued from Page 7 

such as the prescription drug program TinHouse Ways & Means Committee began to 

roll-back the law in July by voting lo cut the 

surtax, but tbe panel wa s assuming much 

lower five-year costs 

Budget office estimates released earlier 

this month put surtax and premium rt*. I 

at about 142 billion and outlays at about 837 

billion. But under the new projections, costs 

of 845 billion would surpass revenues I 

ar e not expected to change significantly 

The Bush administration, which has consistently projected higher costs than the 

CBO, has now raised its five-year estimat e to 

more than 855 billion 

Pharmaceutical Manufacturers Association did not oppose including prescription 

drug coverage in the Medicare expansion, 

but urged Congress to limit the program to 

tbe neediest recipients to minimize added 

premiums and excessive government regulation of the marketplace 

Robert Allnut, PMA executive vice president, cautioned that underestimation of coats 

"will lead inevitably to proposals for coatcontainment measures that would restrict 

freedom of choice, diminish quality of car e 

and discourage the Investment needed for 

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