EPA-B30/1-73-001
SEPTEMBER 1973
ECONOMIC ANALYSIS
OF
PROPOSED EFFLUENT GUIDELINES
THE ASBESTOS RRODUCTS
MANUFACTURING INDUSTRY
QUANTITY
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Planning and Evaluation
Washington, D.C. 2046O
£
\
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This document is available in limited quantities through the
U. S. Environmental Protection Agency, Information Center,
Room W-327 Waterside Mall, Washington, D. C. 20460.
The document will subsequently be available through the
National Technical Information Service, Springfield, Virginia
22151.
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ECONOMIC ANALYSIS
OF
PROPOSED EFFLUENT GUIDELINES
ASBESTOS PRODUCTS MANUFACTURING INDUSTRY
Report to
U.S. ENVIRONMENTAL PROTECTION AGENCY
September 1973
U.S. EnvircTrnenta:! Protection "Agency,
faff* ''< " , '""" '; ' "'f^-lo)
.^O'./. LJ.,.^ .'..-' oet. Ro°m 1G7°
iL 60604
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This report has been reviewed by the EPA, and approved for
publication. Approval does not signify that the contents necessarily
reflect the views and policies of the Environmental Protection Agency,
nor does mention of trade names or commercial products constitute
endorsement or recommendation for use.
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PREFACE
The attached document is a contractors' study prepared for the Office of Planning and
Evaluation of the Environmental Protection Agency ("EPA"). The purpose of the study is
to analyze the economic impact which could result from the application of alternative
effluent limitation guidelines and standards of performance to be established under sections
304(b) and 306 of the Federal Water Pollution Control Act, as amended.
The study supplements the technical study ("EPA Development Document")
supporting the issuance of proposed regulations under sections 304(b) and 306. The
Development Document surveys existing and potential waste treatment control methods
and technology within particular industrial source categories and supports promulgation of
certain effluent limitation guidelines and standards of performance based upon an analysis
of the feasibility of these guidelines and standards in accordance with the requirements of
sections 304(b) and 306 of the Act. Presented in the Development Document are the
investment and operating costs associated with various alternative control and treatment
technologies. The attached document supplements this analysis by estimating the broader
economic effects which might result from the required application of various control
methods and technologies. This study investigates the effect of alternative approaches in
terms of produce price increases, effects upon employment and the continued viability of
affected plants, effects upon foreign trade and other competitive effects.
The study has been prepared with the supervision and review of the Office of Planning
and Evaluation of EPA. This report was submitted in fulfillment of Contract No.
68-01-1541, Task Order No. 4 by Arthur D. Little, Inc. Work was completed as of August 8,
1973.
This report is being released and circulated at approximately the same time as
publication in the Federal Register of a notice of proposed rule making under sections
304(b) and 306 of the Act for the subject point source category. The study has not been
reviewed by EPA and is not an official EPA publication. The study will be considered along
with the information contained in the Development Document and any comments received
by EPA on either document before or during proposed rule making proceedings necessary to
establish final regulations. Prior to final promulgation of regulations, the accompanying
study shall have standing in any EPA proceeding or court proceeding only to the extent that
it represents the views of the contractor who studied the subject industry. It cannot be
cited, referenced, or represented in any respect in any such proceeding as a statement of
EPA's views regarding the subject industry.
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TABLE OF CONTENTS
Page
List of Tables and Figures ix
SUMMARY 1
BACKGROUND AND OBJECTIVES 3
PARTI: INDUSTRY STRUCTURE 7
TYPES OF FIRMS 9
TYPES OF PLANTS 14
NUMERICAL AND PERCENTAGE DISTRIBUTION
OF PLANTS, EMPLOYEES, AND PRODUCTION 24
FINANCIAL PROFILE 28
COST STRUCTURE 36
Johns-Manville Corporation 39
Armstrong Cork Company 39
GAF Corporation 42
National Gypsum Company 43
Certain-Teed Products Corp. 43
Flintkote 44
Jim Walter Corp. 44
PART II: ECONOMIC IMPACT ANALYSIS 47
A. PROPOSED EFFLUENT QUALITY STANDARDS 49
B. EFFLUENT TREATMENT TECHNOLOGIES 49
C. CURRENT LEVELS OF POLLUTION
ABATEMENT 50
D. WATER TREATMENT COSTS 52
1. Capital Investment Costs 53
2. Annual Treatment Costs 54
3. Specific Plant Costs and Projected Industry Costs 54
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TABLE OF CONTENTS (Continued)
Page
E. ECONOMIC IMPACT ANALYSIS 63
1. Methodology 63
2. Impact of the BPT Standards 64
a. Price Effects 64
b. Financial Effects 67
c. Production Effects 69
d. Employment Effects 71
e. Community Effects 71
f. Balance of Payments Effects 72
3. Impact of the BAT Standards 73
a. Price Effects 73
b. Financial Effects 73
c. Production Effects 75
d. Employment Effects 76
e. Community Effects 76
f. Balance of Payment Effects 76
4. Impact of New Source Performance Standards 77
a. Impact on Industry Growth 77
b. Impact on Prices 77
c. Impact on Plant Location 78
d. Balance of Payments Effects 78
APPENDICES 81
A Water Effluent Quality Standards 83
B Present Pattern of Effluent 84
C Representative Manufacturing Plants Used 86
D Asbestos Cement Sheet Products 87
E Asbestos Paper Plants 88
F Asbestos Millboard Plant 89
G Asbestos Roofing Plant 90
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TABLE OF CONTENTS (Concluded)
Page
APPENDICES (Continued)
H Asbestos Floor Tile Plant 91
I Annual Water Treatment Costs 92
J Annual Water Treatment Cost 93
K Annual Water Treatment Cost 94
L Annual Water Treatment Cost 95
M Annual Water Treatment Cost 96
N Annual Water Treatment Cost 97
0 Annual Water Treatment Cost 98
P The Asbestos Products Industry 101
Q Asbestos Cement Pipe 104
R Asbestos Cement Sheet 105
S Asbestos Paper Manufacturing 106
T Asbestos Millboard MFG 107
U Asbestos Roofing 108
V Asbestos Floor Tile 109
W Asbestos Cement Pipe 110
X Asbestos Cement Sheet 111
Y Asbestos Paper 112
Z Asbestos Roofing 113
AA Asbestos Floor Tile Manufacturing 114
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LIST OF TABLES
Table No. Page
I Distribution of Asbestos Products Manufacturing
Facilities by Legal Organizational Form 10
II Distribution of Asbestos Products Manufacturing
Facilities by Types of Operation 10
III The Major Asbestos Manufacturing Firms and Plants
in the United States 12
IV Asbestos-Based Activity of the Major Asbestos
Manufacturing Companies 14
V Trends in the Number of Asbestos Products
Manufacturing Companies 15
VI Proportion of Shipments Accounted for by the
Largest Companies 15
VII Specialization and Coverage Ratios for the Asbestos
Products Manufacturing Industry 16
VIII Captive Fiber Sources for the Major Asbestos
Products Manufacturing Firms 17
IX Asbestos Products Manufacture: Distribution
of Plant Sizes 25
X Asbestos Products Manufacturing: Total Employment
as a Function of Size of Facilities 25
XI Asbestos Products Manufacturing: Total Payroll as a
Function of Size of Facilities 28
XII Asbestos Products Manufacturing: Value Added by
Manufacture as a Function of Facility Sizes 29
XIII Asbestos Products Manufacturing: Value of Shipments
Versus Plant Size 32
XIV Asbestos Products Manufacturing: New Capital
Expenditures Versus Plant Size 33
XV Synthetic Income Statement and Balance Sheet for the
Asbestos Products Manufacturing Industry (CIRCA 1971) 37
XVI Financial Status of Major Companies in the Asbestos
Products Industry - 1972 38
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LIST OF TABLES (Concluded)
Table No. Page
XVII Recent Trends in Materials and Payroll Costs for the
Asbestos Products Manufacturing Industries 38
XVIII Overall Corporate Profit Margins (%) of the Major
Asbestos Product Manufacturing Firms 40
XIX Capital Expenditures (as a Percentage of Gross
Plant) by the Major Asbestos Product Manufacturing
Firms 40
XX Johns-Manville Corporation: Net Sales and Earnings
before Income Taxes by Major Business Segments 41
XXI Asbestos-Cement Pipe Plants: Water Treatment
Capital Investment as a Function of Treatment Capacity 53
XXII Estimated Total Costs to the Asbestos Products
Manufacturing Industry of Meeting the BPT
Water Effluent Standards 61
XXI11 Estimated Total Costs of the Asbestos Products
Manufacturing Industry of Meeting the BAT Water
Effluent Standards 62
XXIV Water Treatment Costs, to Meet the BPT and BAT
Effluent Standards 62
XXV New Water Treatment Costs (by Major Asbestos
Products Manufacturing Firms) as a Proportion of
Annual Capital Expenditures 63
XXVI C & EN Quoted Price Trend for 6-Inch and 12-Inch
Asbestos-Cement Pipe (Carload Lots) 65
XXVII Water Treatment Costs to Meet Proposed Standards
in Asbestos Products Manufacturing 67
XXVIII Financial Impact of the BPT Standards on the Major
Asbestos Products Manufacturing Companies 68
XXIX Recent Trends in Value of U.S. Exports and
Imports of Manufactured Asbestos Products 72
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LIST OF TABLES
Table No. Page
I Distribution of Asbestos Products Manufacturing
Facilities by Legal Organizational Form 10
II Distribution of Asbestos Products Manufacturing
Facilities by Types of Operation 10
III The Major Asbestos Manufacturing Firms and Plants
in the United States 12
IV Asbestos-Based Activity of the Major Asbestos
Manufacturing Companies 14
V Trends in the Number of Asbestos Products
Manufacturing Companies 15
VI Proportion of Shipments Accounted for by the
Largest Companies 15
VII Specialization and Coverage Ratios for the Asbestos
Products Manufacturing Industry 16
VIM Captive Fiber Sources for the Major Asbestos
Products Manufacturing Firms 17
IX Asbestos Products Manufacture: Distribution
of Plant Sizes 25
X Asbestos Products Manufacturing: Total Employment
as a Function of Size of Facilities 25
XI Asbestos Products Manufacturing: Total Payroll as a
Function of Size of Facilities 28
XII Asbestos Products Manufacturing: Value Added by
Manufacture as a Function of Facility Sizes 29
XIII Asbestos Products Manufacturing: Value of Shipments
Versus Plant Size 32
XIV Asbestos Products Manufacturing: New Capital
Expenditures Versus Plant Size 33
XV Synthetic Income Statement and Balance Sheet for the
Asbestos Products Manufacturing Industry (CIRCA 1971) 37
XVI Financial Status of Major Companies in the Asbestos
Products Industry - 1972 38
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LIST OF TABLES (Concluded)
Table No. Page
XVII Recent Trends in Materials and Payroll Costs for the
Asbestos Products Manufacturing Industries 38
XVIII Overall Corporate Profit Margins {%) of the Major
Asbestos Product Manufacturing Firms 40
XIX Capital Expenditures (as a Percentage of Gross
Plant) by the Major Asbestos Product Manufacturing
Firms 40
XX Johns-Manville Corporation: Net Sales and Earnings
before Income Taxes by Major Business Segments 41
XXI Asbestos-Cement Pipe Plants: Water Treatment
Capital Investment as a Function of Treatment Capacity 53
XXII Estimated Total Costs to the Asbestos Products
Manufacturing Industry of Meeting the BPT
Water Effluent Standards 61
XXIII Estimated Total Costs of the Asbestos Products
Manufacturing Industry of Meeting the BAT Water
Effluent Standards 62
XXIV Water Treatment Costs, to Meet the BPT and BAT
Effluent Standards 62
XXV New Water Treatment Costs (by Major Asbestos
Products Manufacturing Firms) as a Proportion of
Annual Capital Expenditures 63
XXVI C & EN Quoted Price Trend for 6-Inch and 12-Inch
Asbestos-Cement Pipe (Carload Lots) 65
XXVII Water Treatment Costs to Meet Proposed Standards
in Asbestos Products Manufacturing 67
XXVIII Financial Impact of the BPT Standards on the Major
Asbestos Products Manufacturing Companies 68
XXIX Recent Trends in Value of U.S. Exports and
Imports of Manufactured Asbestos Products 72
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SUMMARY
The water treatment technologies for achieving the "Best Practicable Technology"
(BPT) and "Best Available Technology" (BAT) effluent standards in the asbestos products
manufacturing industry (asbestos-cement pipe, asbestos-cement sheet, asbestos paper,
millboard, roofing, and floor tile) were proposed in the industry Effluent Guidelines
Development Document. In accordance with the scope of this study, these have been
accepted for the present analysis, along with the respective "typical plant" capital
investments and "annualized" water treatment costs, without independent verification. The
costs have been extrapolated to a large sample (60-100% coverage) of the manufacturing
facilities associated with each product category. Concurrently, a determination has been
made of the "annualized" water treatment cost (for meeting the BPT and BAT standards)
for each surveyed plant as a proportion of its estimated annual sales of each asbestos
product. The value of this parameter is subsequently used as a criterion for assessing the
severity of the water treatment costs on each plant.
Impact of the BPT Standards -- The "annualized" aggregate costs to the respective
segments of the asbestos products manufacturing industry for achieving the BPT effluent
standards amount to the following percentages of the annual sales ( 1972) of each product
'0
Asbestos-cement pipe . . . 0.2%
Asbestos-cement sheet . . . 0.4%
Asbestos paper . . . 0.2%
Asbestos millboard . . . 1.0%
Asbestos roofing . . . 0.8%
Asbestos floor tile ... 0.1%
It is concluded that these additional costs, assuming they are totally passed-on to the
consumer, would not exert a significant impact on the prices and the market
competitiveness of the respective products viz-a-viz imports and substitute materials. In fact,
it is probable that, in general, manufacturers of these products may tend to absorb these
costs not only because they are relatively negligible, but also because the above products
have, in recent years, been confronting stiff market competition from other competitive
substitute products. If the costs are absorbed, the effect of such action on overall corporate
profitability is expected to be minimal, especially in light of the fact that virtually all the
asbestos products manufacturers are extensively diversified into apparently more profitable
non-asbestos manufacturing.
However, three plants, one sheet and two millboard, were identified, solely on the
basis of these additional costs and without evaluation of other factors that may impinge on
this decision, as potential candidates for shut-down. If shut-down should indeed occur,
the resultant loss of employment would amount to about 2% (275 employees) of the total
industry workforce. In spite of the fact that the impacted sheet plant is located in an area of
"substantial unemployment" and one of the millboard plants is in an area of "persistent
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unemployment," no significant adverse community impacts would result, although laid-ol'f
individuals would have to contend with personal adverse impacts and inconveniences.
In terms of the national balance of payments it is expected that the past trend in favor
of the United States would continue, essentially unaffected by the BPT standards, but with
the gap narrowing with time as indigenous manufacturing capability is developed in foreign
countries.
Impact of BAT Standards The average per-annum aggregate costs required by the
various segments of the industry to comply with the BAT standards, expressed as a
proportion of their estimated annual sales, are as follows:
Asbestos-cement pipe . . . 0.4%
Asbestos-cement sheet . . . 1.0%
Asbestos paper . . . 0.6%
Asbestos millboard . . . 1.0%
Asbestos roofing ... 1.1%
Vinyl-asbestos floor tile ... 0.1%
A survey of the water treatment needs of the various manufacturing plants shows that
one asbestos paper plant, in addition to the three facilities identified as potentially
impact-sensitive by reason of the BPT guidelines, is expected to be adversely impacted by
implementation of the BAT standards. The total loss of sales potentially relatable to the
BAT effluent standards would equal about 0.6%, with the loss of employment amounting to
2.4% of the work-force. No adverse community impact is anticipated and neither is a
substantial effect on the national balance of payment to be expected.
Impact of New Source Performance Standards - The analysis based on these standards
indicates no adverse effects on the growth of the industry as a direct consequence of the
proposed new source standards. Even in the absence of these standards, growth would at
best be slow. The additional capital and operating costs arising from the BPT and BAT
effluent guidelines should not significantly affect the price structure and market
competitiveness of the respective products; nor is it expected that these costs, of themselves,
would constitute a significant inducement for U.S. manufacturers to preferentially locate
new facilities at foreign sites, with its consequent potentially adverse effects on the national
balance of trade and payments (and loss of related domestic employment).
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BACKGROUND AND OBJECTIVES
The purpose of this report is to present an analysis of the potential economic impact on
the asbestos products manufacturing industry of pollution abatement requirements under
the Federal Water Pollution Control Amendments of 1972 for each of three levels of effluent
treatment:
Proposed best practicable technology (B.P.T.)
Proposed best available technology (B.A.T.)
Proposed new source performance standards (N.S.P.S.)
The segments of the asbestos products manufacturing industry covered within the
scope of the present report are largely contained within SIC 3292 and consist of the
following product categories:
- Asbestos-cement pipe
Asbestos-cement sheet
- Asbestos millboard
- Asbestos paper
Asbestos roofing
Vinyl-asbestos floor tile
The report is pros"ii(eel in two principal parts. Part I is a characterization of the
asbestos products manufacturing industry based in part on the U.S. Bureau of the Census
statistics for SIC 3292. In applying these data, it is recognized that SIC 3292 contains such
other asbestos-based products as textiles and friction materials which do not fall within the
scope of the present analysis. This fact is not expected to detract significantly from the
major conclusions from the analysis.
Part II analy: es ii,e probable economic impacts on the industry arising from
promulgation ui the abo>v effluent treatment guidelines.
Following is a summary of the specific items covered in both the industry
characterization and impact analysis sections, arranged in compliance with a format
proposed by the EPA.
PARTI: INDUSTRY STRUCTURE
A. Industry Segments
1. Types of plants in the industry
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a. Types of firms
size
level of integration
number of plants
number of products
level of diversification
b. Types of plants
size
age
- location
level of technology
efficiency
- level of integration (production)
2. Number of plants and employees in each segment
3. Percent of total industry for each segment
by number of plants
by production
- by employment
4. Identification of segments likely to be significantly impacted
B. Financial Profiles
1. For plants in each segment:
Annual profit before taxes
Annual cash flow
Market (salvage) value of assets
Cost structure
fixed costs
variable costs
2. The likely distribution of the above financial parameters within the industry segments.
3. Constraints on financing additional capital assets for any of these segments.
4. Price effects:
Price determination process in the industry
Likely price changes and secondary effects
PART II: ECONOMIC IMPACT ANALYSIS
A. Impact Analysis
1. Price effects:
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Price increases
- Secondary effects
2. Financial effects:
- Profitability
Capital availability
3. Production effects:
- Production curtailment
Plant closings
Industry growth
4. Employment effects:
From production curtailment
From plant closings
From changes in industry growth
5. Resultant community effects:
Location of plant closings or production curtailments
Number and location of impacted communities
Probability of building new plants in the area
Probability of dislocated employees being absorbed in local workforce
Secondary effects resulting in further unemployment in impacted areas
B. Limits of the Analysis
1. Accuracy
2. Range of error
3. Critical assumptions sensitivity to overall conclusions.
4. Questions remaining to be answered
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PART I: INDUSTRY STRUCTURE
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TYPES OF FIRMS
According to the 1967 U.S. Census of Manufacturers, 81 firms (operating 138
establishments) were involved in asbestos products manufacturing, (SIC 3292). The
distribution of these facilities as a function of the legal organization structure of the
controlling firms is shown in Table 1. It is evident that corporations dominate the asbestos
manufacturing industry, controlling about 84 percent of the physical facilities and about
99.5 percent of the workforce in the asbestos products sector. It is not certain what
proportion of these firms are public corporations. The participation of the individual owner
or partnerships is negligible.
Shown in Table II is a grouping of the facilities in terms of the types of operations.
Multi-unit corporations dominate the asbestos products manufacturing industry and provide
most of the employment, accounting for about 96 percent of the total employment.
In evaluating the asbestos products manufacturing industry, one easily arrives at the
conclusion that it is disproportionately dominated by a few giant firms. These are listed in
Table III, along with the estimates of their total number of employees, annual sales,
principal asbestos-related products, and major asbestos manufacturing facilities. Note that
the total employment and sales shown do not necessarily reflect only asbestos-based
manufacturing since these large firms are generally diversified into other product lines. Table
IV shows the proportions of the major manufacturers' product lines that are related to
asbestos.
It is estimated that there are presently about 80 firms engaged in asbestos products
manufacture. The historical trend in the number of firms is shown in Table V and Figure 1.
To illustrate the intensive domination of the industry by a few select firms listed in
Table III, Table VI shows the historical trends in the percentages of the industry's shipments
accounted for by the largest companies. The four largest producers have historically
accounted for well over 50 percent of the industry (value of) shipments. For the eight
largest firms, the figure is consistently about 75 percent. It is believed that these
distributions are still viable in 1973.
A useful yardstick for measuring the level of plant and product diversification of the
asbestos manufacturing industry is the "specialization ratio" which is a measure of the
extent to which plants classified in this industry specialize in making asbestos products. To
derive this factor, the value of shipments of asbestos products by plants in this industry
segment is expressed as a ratio of the total shipments of all products made by these plants.
Another useful criterion is the "coverage ratio" which measures the extent to which all
shipments of asbestos products are made by plants classified in this industry, as
distinguished from secondary producers elsewhere; in other words, the value of shipments of
asbestos products made by plants classified in this industry is expressed as a ratio of the
total shipments of asbestos products made by all producers, both in and out of the asbestos
products manufacturing industry.
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TABLE I
DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING
FACILITIES BY LEGAL ORGANIZATIONAL FORM
Industry Sector
Form of
Organization
No. of Facilities
with 20 Or
Total more employees
Total Number
of Employees
Asbestos Products
Corporate 116 99
Noncorporate 6
Administrative
21,200
< 50
< 50
Total
138
99
-21,300
Source: 1967 U.S. Census of Manufacturers
TABLE II
DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING
FACILITIES BY TYPES OF OPERATION
Industry Sector
Asbestos Products
Type of
Operation
Multi-unit
corporations
Single-unit
corporations
Single-unit
non-corporations
Administrative
Records
Total
No. of Facilities
Total
89
27
16
138
of 20 or more
employees
84
15
99
Total Number
of Employees
20,400
800
< 50
< 50
21,300
Source: 1967 U.S. Census of Manufacturers
10
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I
8
f
z
200
150
100
100
50
1947
1954
1958
1963
1967
1973
Sources: 1947-1967-1967 U.S. Census of Manufactures.
1973 - Contractor's estimates
FIGURE 1 HISTORICAL TREND IN THE NUMBER OF COMPANIES INVOLVED IN ASBESTOS
PRODUCTS MANUFACTURING
11
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TABLE III
THE MAJOR ASBESTOS MANUFACTURING FIRMS AND PLANTS IN THE UNITED STATES
Company
Total Number of
Employees
Estimated Annual
Sales ($000.000)
Principal Asbestos-Based
Products Manufactured
Plants/Establishments Manufac-
turing Asbestos Products
American Biltrite Rubber Corp.
Armstrong Cork Co.
about 4,500; 20Z
involved in as-
bestos products
21,000; about 80%
involved in asbes-
tos products
161-0
550.0-600.0
Floor tiles
Gaskets & insulating
materials; vinyl asbes-
tos tile
14 plants involved to some degree
in asbestos manufacturing
Fulton, N. Y.
Jackson, Miss.
Kankakee, 111.
Lancaster, Pa.
South Gate, Cal.
Certain-Teed Products Corp. 7,600
The Flintkote Company 11,300
332.0
441.0
Roofing products; asbes-
tos-cement pipes & fit-
tings
Asbestos-cement pipe;
vinyl asbestos tiles;
roofing products
Santa Clara, Cal.
Riverside, Cal.
Ambler, Pa.
Hillsboro, Texas
St. Louis, Mo.
Los Angeles, Cal.
Chicago Heights, 111.
New Orleans , La.
Ravenna, Ohio
Chillicothe, Ohio
GAF Corporation
20,000
Its subsidiary,
Ruberoid, is probably
the snle producer of
asbestos products
768.0
Asbestos-cement products;
vinyl asbestos tiles;
roofing products; asbes-
tos paper
Mobile, Ala.
Long Beach, Cal.
Joliet, III.
Millis, Mass.
St. Louis, Mo.
South Bound Brook, N. J.
Vails Gate , N. Y.
Erie, Pa. (two plants)
Whitehall, Pa.
Houston, Texas
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TABLE III, continued
Company
Total Number of
Employees
Estimated Annual
Sales ($000.000)
Principal Asbestos-Based
Products Manufactured
Plants/Establishments Manufac-
turing Asbestos Products
Jim Walter Corp.
1,000 in asbestos 882.0
products manufacture
Roofing materials
Johns-Manville Products Corp. 25,200
796.0
Asbestos-cement products;
asbestos roofing; asbes-
tos insulating materials;
millboard
Nicolet Industries, Inc.
National Gypsum Co.
350
14,500
15.0
519.0
Asbestos paper;
asbestos millboard
Asbestos-cement products;
asbestos roofing; insulat-
ing board
Perth Amboy, N. J.
Linden, N. J,
Memphis, Tenn.
Lockland, Ohio
Miamisburg, Ohio
Wilmington, Del.
Houston, Texas
Tampa, Fla.
Cincinnati, Ohio
Nashua, N. H.
Manville, N. J.
Pittsburg, Cal.
Stockton, Cal.
Waukegan, 111.
Marrero, La.
Long Beach, Cal.
Los Angeles, Cal.
Green Cove Springs, Fla.
Savannah, Ga.
Billerica, Mass.
Tilton, N. H.
Denison, Texas
Forth Worth, Texas
Ambler, Pa.
Norristown, Pa.
Hamilton, Ohio
New Orleans, La.
Millington, N. J.
Mobile, Ala.
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TABLE IV
ASBESTOS-BASED ACTIVITY OF THE MAJOR
ASBESTOS-MANUFACTURING COMPANIES
Company Estimated Annual Sales Percent of Product Line
($000,0001 Related to Asbestos
American Biltrite Rubber Co. 161 5
Armstrong Cork Co. 600.0 50
The Flintkote Co. 441.0 20
GAP Corp. 768.0 5
Johns-Manville Corp. 796.0 30
National Gypsum Co. 519.0 10
Jim Walter Corp. 882.0 12
Source: Company and Trade Reports and Contractor's Estimates
The historical trends in these ratios are shown in Table VII. It is evident that plants in
this industry tend to be very specialized, with about 90 percent of their shipments
accounted for by asbestos products. The coverage ratio indicates that asbestos products
manufacturers historically capture over 90 percent of the market for their primary products.
A review of the sources of primary asbestos fiber indicates that some of the major
asbestos manufacturers are integrated backwards to the mines. These are firms of the
vertical type which exercise substantial control over their raw materials sources. The mines
owned and/or operated by asbestos manufacturers are shown in Table VIII.
TYPES OF PLANTS
As discussed previously, asbestos products manufacturing facilities are characterized by
very high specialization ratios (90 percent). Thus the typical plant (especially of the minor
manufacturers) is apt to be a single-product operation whose product is geared to service a
specific industry within a restricted geographical region.
A survey of selected facilities shows that nearly all the large plants employing in excess
of 100 workers belong to the major firms within the industry, such facilities also often
generating relatively minor proportions of non-asbestos products.
The locational characteristics of asbestos products manufacturing facilities correspond
to the major markets served automotive and construction industries. Thus, plants tend to
14
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TABLE V
TRENDS IN THE NUMBER OF
ASBESTOS PRODUCTS MANUFACTURING COMPANIES
Product
Asbestos Products
Year
1947
1954
1958
1963
1967
1973
Number of Companies
85
74
69
73
81
80
Sources: 1947-1967 1967 U. S. Census of Manufacturers
1967-1973 Contractor's Estimates
TABLE VI
Product
PROPORTION OF SHIPMENTS ACCOUNTED FOR
BY THE LARGEST COMPANIES
Year Percent of Value of Shipments Accounted for By;
Asbestos Products
1954
1958
1963
1966
1967
4_
60
59
56
56
55
8.
Largest
77
76
76
74
75
IP-
Companies
NA
95
95
NA
94
_50
NA
99
99+
NA
99+
Source: 1967 U.S. Census of Manufacturers
15
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TABLE VII
SPECIALIZATION AND COVERAGE RATIOS
FOR THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY
Product Year Primary Product Coverage Ratio
Specialization Ratio
Asbestos Products 1947 87 90
1954 87 93
1958 89 92
1963 95 91
1967 93 90
Source: 1967 U. S. Census of Manufacturers
be concentrated near the major metropolitan centers of the United States. The geographical
distributions of the plants of the major manufacturing firms are shown in Figures 2 to 7 for
each of the six product categories of interest.
It is fair to state that the asbestos manufacturing industry in the United States is very
mature, with most of the larger plants well over 25 years old and employing well-established
technologies. For instance, asbestos-cement pipe manufacture was introduced in the United
States about 1928 by the Johns-Manville Corporation at its Waukegan, Illinois, plant.
Except for incorporation of sophisticated controls and materials handling systems, it is
doubtful whether the technology, similar in principle to that employed in the manufacture
of flat or corrugated sheeting, has changed to any fundamental extent since then. Similar
comments may be applied to the manufacture of vinyl asbestos tiles. In light of the
domestic market position of asbestos products, viz-a-viz competitive materials, it is not
expected that any major new facilities or technologies will be instituted during the
remainder of this decade.
16
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TABLE VIII
CAPTIVE FIBER SOURCES FOR THE
MAJOR ASBESTOS PRODUCTS MANUFACTURING FIRMS
Company Captive Mlne(s) Fiber-Producing Capacity
(short tons/year)
The Flintkote Co. Flintkote Mines, Ltd.
Quebec (wholly owned
subsidiary) 33,000
GAF Corp. Captive mines in
Vermont 40,000
ASARCO (through CAPCO, Lake Asbestos of
40% owned by ASARCO) Quebec, Ltd. 150,000
Johns-Manville Canadian Johns-Manville 835,000
Products Corp. Co., Ltd. Coalinga
Asbestos Corp., Cal.
(80% interest) 15,000
National Gypsum Co. National Asbestos*
Mines, Ltd. 60,000
Jim Walter Corp. Carey -Canadian
Mines,Ltd. 200,000
H. K. Porter Co., Inc. Pacific Asbestos Corp. 50,000
Raybestos-Manhattan, Cassiar Asbestos Corp.
Inc. (partial interest) 110,000
General Dynamics Corp. Asbestos Corp., Ltd.
(54% interest) 500,000
Union Carbide Corp. Union Carbide Mines,
California 10,000
*
National Gypsum is negotiating the sale of its assets to Lake Asbestos
of Quebec, Ltd. Sale is expected to be consummated in September 1973.
17
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' N DAKOTA \
L r i
\ ?l **'«** -t-us.^.
FIGURE 2 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS-CEMENT
PLANTS IN THE UNITED STATES
18
-------
FIGURE 3 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS-
CEMENT SHEET PLANTS IN THE UNITED STATES
19
-------
S DAKOTA
FIGURE 4 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS
MILLBOARD PLANTS IN THE UNITED STATES
20
-------
M°NT^,
1 COLORADO 1
| NEBRASKA'
I
' N DAKOTA \ ' -^b.
I y MINNESOTA
' I
I \
S DAKOTA ^ \ WISCONSIN
I I 1X
I ' ",
I IOWA *v
^\ SN, 1LL«VrNO-^-5STo .
* > ! I. lu
\ I .
\MISSOURI I I ''
I KANSAS \ N
I
I
^L-_ __' ^ _ -
»---, OKlAHOMA ArA-A-NS-s^--TENNESSE6^^^
I I i r ^Ti "^
I
J,
FIGURE 5 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS
PAPER PLANTS IN THE UNITED STATES
21
-------
FIGURE 6 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS
ROOFING PLANTS IN THE UNITED STATES
22
-------
FIGURE 7 GEOGRAPHICAL LOCATION OF THE MAJOR VINYL- ASBESTOS
FLOOR TILE PLANTS IN THE UNITED STATES
23
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NUMERICAL AND PERCENTAGE DISTRIBUTION OF PLANTS, EMPLOYEES
AND PRODUCTION
The numerical distribution of the establishments by size (expressed in terms of the
number of employees) as given by the 1967 Census of Manufacturers is shown in Table IX
and depicted graphically in Figure 8.
This distribution is even more skewed when viewed in terms of the total and cumulative
employment per size category. This is illustrated in Table X and shown graphically in Figure
9. A comparison of Figures 8 and 9 shows that whereas facilities with less than 100
employees account for 55 percent of the number of asbestos products manufacturing
establishments, these facilities employ only about 9 percent of the workforce.
The relatively minor contributions of the less-than-100 employee facilities in the
industry are further illustrated in Tables XI and XII, and Figures 10 and 11 which show the
distribution of total payroll and value-added-by-manufacture as functions of facility sizes.
The segment with less than 100 employees per establishment contributes only 8.1 percent
of the payroll and generates only 7.4 percent of the value added by manufacture. These
figures again underline that in terms of economic impact, those segments of the industry
employing less than 100 workers per facility exert relatively little influence. The economic
punch appears clearly to rest with the major manufacturing units.
Other economic indicators that support the same thesis are the value of shipments and
the new capital expenditures for the various size categories - Tables XIII and XIV and
Figures 12 and 13. Operations with fewer than 100 employees account for 8.6 percent of
the shipments and a mere 8.3 percent of the new capital investments.
It should be observed that although the preceding data imply that a certain number of
facilities are in the under-50-employees category, such small facilities are more apt to be
involved in the manufacture of products outside the scope of the present study, i.e. friction
materials. In fact, in view of the relatively low unit value of the products studies -
asbestos-cement pipe and sheet, asbestos millboard, paper, and floor tile, coupled with the
fact that large throughputs are necessary to economically justify the continued operation of
any facility manufacturing these specific products, it can justifiably be stated that virtually
all the facilities of any consequence employ in excess of 50 workers.
There is the additional consideration that, for a given asbestos product, the
manufacturing equipment tends to be of a given standard capacity. Differences in plant
capacities are therefore determined approximately by the number of installed machines, and
capacity differences therefore occur in multiples of one standard machine capacity, As such,
since a machine requires over 50 men to keep it in operation, it becomes evident why, for
the specific products assessed, plants with less than about 50 employees are the exception.
Since the plants manufacturing a given product may thus be regarded as relatively
large, size considerations appear inadequate as a criterion for assessing plant sensitivity to
impact arising from the proposed effluent guidelines. Therefore, the impact analysis will be
based on plant-by-plant assessment of a significant cross-section of the facilities generating a
given product.
24
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TABLE IX
ASBESTOS PRODUCTS MANUFACTURE:
DISTRIBUTION OF PLANT SIZES
Average Number
of Employees
1 to 4
5 to 9
10 to 19
20 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1000 to 2499
TOTAL
Total No. of
Establishments
20
7
12
14
23
36
18
6
2
138
Cumulative
Percent of Total
14.5
19.6
28.3
38.4
55.1
81.2
94.2
98. 6
LOO.O
Source: 1967 U. S. Census of Manufacturers
TABLE X
ASBESTOS PRODUCTS MANUFACTURING:
TOTAL EMPLOYMENT AS A FUNCTION OF SIZE OF FACILITIES
Average Number Total No. of Cumulative
of Employees Employees Percent of Total
1 to 4
5 to 9
10 to 19
20 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1000 to 2499
TOTAL
*Contractor's Estimate
Source: Unless where otherwise indicated,
1967 U.S. Census of Manufacturers
40*
45*
200
400
1,700
5,600
6,100
7,300
4,200*
0.2
0.3
L.I
2.7
9.3
31.2
55.1
83.6
100.0
25,585
25
-------
OS
1-4
5-9
10-19
20-49 5099 100-249
Average Number of Employees
250-499
500-999
1000-2498
Source: 1967 U.S. Census of Manufactures.
FIGURE 8 CUMULATIVE DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING FACILITIES
AS A FUNCTION OF PLANT SIZE
-------
1-4
5-9
10-19
20-49 50-99 100-249 250-499 500-999 1000-2499
Average Number of Employees
Source: 1967 U.S. Census of Manufactures.
FIGURE 9 ASBESTOS PRODUCTS MANUFACTURING INDUSTRY - CUMULATIVE EMPLOYMENT
VERSUS SIZE OF FACILITIES
-------
TABLE XI
ASBESTOS PRODUCTS MANUFACTURING:
TOTAL PAYROLL AS A FUNCTION OF SIZE OF FACILITIES
Average Number Payroll Cumulative Percent
of Employees ($106) of Sector Total
1 to 4 0.2 0.1
5 to 9 0.3 0.3
10 to 19 1.0 0.9
20 to 49 2.6 2.4
50 to 99 10.0 8.1
100 to 249 36.9 29.4
250 to 499 42.2 53.7
500 to 999 50.8 83.0
1000 to 2499 29.4* 100.0
TOTAL 173.4
*Contractor's estimates on the basis of average payroll per
employee of $7,000
**Contractor's estimates on the basis of average payroll per
employee of $6,300
Source: Unless where otherwise indicated,
1967 U. S. Census of Manufacturers
FINANCIAL PROFILE
The Bureau of the Census data indicate a definite stability in several important
economic indicators for the asbestos products manufacturing industry over the past decade.
The exceptions are the increases since 1967 in the value of shipments and the value of
shipments per employee, and the decline in industry employment. There has also been a
reduced inventory turnover over the last several years, although the industry's turnover still
remains well above the average for manufacturing in general.
As discussed previously, the products of concern in this study account for over 80
percent of the total value of shipments of SIC 3292. Furthermore, the eight largest firms
involved in the manufacture of the subject products currently account for over 80 percent
of the value of sales. The distribution of the total sales of these products among these eight
largest manufacturers are estimated as follows:
28
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Percent of Total Value
Company of Shipments*
Johns Manville Corporation 30-35
Jim Walter Corporation 14-17
Flintkote Company 9-11
Certain-Teed Products Corporation 6-8
Armstrong Cork Company 6-8
GAP Corporation 3-5
National Gypsum 3-5
Nicolet Industries 3-5
Subtotal 80
All Others 20
TABLE XII
ASBESTOS PRODUCTS MANUFACTURING:
VALUE ADDED BY MANUFACTURE AS A FUNCTION OF FACILITY SIZES
Average Number Cumulative Percent
of Employees Total Value of Sector Total
1 to 4 0.4 0.1
5 to 9 0.5 0.2
10 to 19 2.4 0.8
20 to 49 5.0 2.1
50 to 99 19.4 7.4
100 to 249 84.2 30.2
250 to 499 98.2 56,9
500 to 999 97.9 83.4
1000 to 2499 60.8* 100.0
TOTAL 368.8
*Contractor's estimates on the basis of (1967) value added per
employee of $14,470
Source: 1967 U. S. Census of Manufacturers
'Includes only shipment of products within the scope of this report.
29
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U)
o
1-4
5-9
10-19
20-49 50-99 100-249 250-499 500-999 1000-2499
Average Number of Employees
Source: 1967 U.S. Census of Manufactures.
FIGURE 10 THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY - PAYROLL DISTRIBUTION
AS A FUNCTION OF FACILITY SIZES
-------
te
N)
O
Cumulative Percent of Value Added by Manufacture
§888
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Since the above companies represent such a high proportion of the value of product
shipments, they were chosen for more detailed financial analysis. Tables XV to XVII
summarize the salient financial statistics for these companies (where such statistics are
available).
TABLE XI11
ASBESTOS PRODUCTS MANUFACTURING:
VALUE OF SHIPMENTS VERSUS PLANT SIZE
Value of Cumulative
Average Number
of Employees
1 to 4
5 to 9
10 to 19
20 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1000 to 2499
TOTAL
Shipments
($106)
0.6
0.9
4.2
11.3
40.6
169.3
186.4
161.7
92.4*
667.4
Percent of
Total
0.1
0.2
0.9
2.5
8.6
34.0
61.9
86.2
100.0
Contractor's estimates based on value of shipments
per employee of $22,000
Source: 1967 U. S. Census of Manufacturers
32
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TABLE XIV
ASBESTOS PRODUCTS MANUFACTURING:
NEW CAPITAL EXPENDITURES VERSUS PLANT SIZE
Average Number Capital Expenditures Cumulative
of Employees ($10°) Percent of Total
1 to 4
5 to 9
10 to 19
20 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1000 to 2499
TOTAL
0.04*
0.03*
0.2*
0.1*
1.1
4.2
6.6
3.9
1.6*
17.77
0.2
0.4
1.5
2.1
8.3
31.9
69.0
91.0
100.0
Contractor's estimates based on capital expenditure per
employee equivalent to 1.25 times 1963 Census values
Source: 1967 U. S. Census of Manufacturers
33
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Cumulative Percent of Value of Shipments
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Cumulative Percent of Capital Expenditures
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-------
COST STRUCTURE
Recognizing that manufacturing costs are very sensitive to, among other factors,
capacity utilization, scale of production, degree of mechanization, productivity, etc., all
of which vary in turn with specific products and plants - it would be meaningful to
synthesize a cost structure for the asbestos products manufacturing industry (S.I.C. 3292)
on the basis of Bureau of the Census data for 1971 and generalizations developed by
examining financial data for the major companies.
The following definitions are necessary to facilitate understanding of the synthetic
costs:
Materials Includes the costs of raw materials, supplies, semi-finished
goods, fuels, and electric energy.
Payroll All forms of compensation such as salaries, wages, commissions,
bonuses, etc.
Capital Expenditures of the type chargeable to fixed asset accounts,
Expenditures and for which depreciation charges are normally made.
A review of these definitions indicates that they together incorporate the important
manufacturing cost parameters, except certain elements of general administration and sales
costs as well as interest payments. These have been estimated in the synthetic costs shown in
Table XV. The resulting 9% apparent pre-tax profit margin is roughly comparable to the
overall average of companies in Table XVI. (However, it must be borne in mind that these
companies produce a variety of products in different industry segments, as will be illustrated
in the next section, "Company Profiles.")
To derive the capital depreciation, the new depreciable capital investment made by the
industry from 1957 to 1971 ($278.4 million) has been determined and, to a first
approximation, a 15-year straight-line depreciation has been applied.
Also shown in Table XV is a synthetic balance sheet for asbestos products
manufacturing. The balance sheet is derived by generalizing industry financial data into the
assumption that total assets are about 0.80 times sales, that year-end working capital is
typically about 20% of annual sales, that current assets are twice current liabilities, and that
debt is 20% of shareholders' equity.
The above figures applied to the Census data indicate a pre-tax return of $57 MM,
equivalent to an 18% pre-tax return on equity for the asbestos products manufacturing
industry (S.I.C. 3292) circa 1971.
Asbestos products manufacturing may be characterized as a business with relatively
low fixed costs and relatively high variable costs: Table XVII shows that materials and
supplies in 1971 accounted for nearly 50 percent of the sales dollar. An additional 25
percent is contributed by payroll. The trends in the cost of these items for the period 1968
to 1971 are shown in Table XVII. Payroll cost per unit of sales appears to have remained
36
-------
stable over this time span, presumably due to a combination of higher product prices,
reduced manpower requirements, and increased productivity. Materials costs, on the other
hand, have increased steadily. As raw materials, utilities, and fuel costs escalate, it can
reasonably be expected that the materials cost trend shown in Table XVII will continue,
further squeezing the apparent pre-tax profit margin of 9 percent deduced for the industry
as a whole. A pretax margin below 9 percent is typically not considered particularly
attractive in manufacturing, especially with an indicated pre-tax return on investment below
20%, as in Table XV. If this truly represents the industry average, some product lines and/or
plants obviously may be operating at margins well before this figure. Any external pressures
that threaten to reduce this margin could then conceivably endanger these segments of the
industry.
TABLE XV
SYNTHETIC INCOME STATEMENT AND BALANCE SHEET
FOR THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY*
(CIRCA 1971)
INCOME STATEMENT
Cost Item
Materials
Payroll
Depreciation
General Adm. & Sales
Interest & Other Charges
Total
Apparent pre-tax profit
Pre-tax return on stockholders' equity
BALANCE SHEET ($MM)
Assets
(Value of Shipments: $633MM)
Amount per Dollar Sales
$0.46
0.26
0.03
0.13
0.03
$0.91
$0.09
$ 57MM
18%
Current
252
Plant,
Equip.,
Etc. 254
506
Current
Long Term
Debt
Stockholders'
Equity
Liabilities
125
64
316
506
Source: Contractor's estimates based on Census data and generalized financial data.
*S.I.C. 3292
37
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TABLE XVI
FINANCIAL STATUS OF MAJOR COMPANIES IN THE
ASBESTOS PRODUCTS INDUSTRY - 1972
Company
Johns-Manville
Flintkote
Armstrong Cork
National Gypsum
GAP (Ruberoid)
Jim Walter
Certain-Teed
Nicolet Industries
1972
Approx. No. Sales & Net Pre-tax Net Working
Employees Revenues Operating Prof it Cash Flow Cap'l (yr.end)
Long-
Term
Debt
Total (as%of)
Assets Equity
$MM $ Millions
25,000
9,300
22,500
15,000
22,000
26,000
8,600
450
796
440
685
519
768
885
393
N.A.
77.5
24.0
78.3
55.9
50.4
77.0
43.0
N.A.
81.9
38.2
68.8
49.4
52.2
65.2
35.2
N.A.
123.9
91.4
165.6
165.2
208.3
200.7
77.1
N.A.
736 9%
360 31%
511 19%
455 20%
611 37%
983 45%
273 23%
N.A. N.A.
Source: Company and Trade Reports and Contractor's estimates.
Notes: N.A. = Not Available
TABLE XVII
RECENT TRENDS IN MATERIALS AND PAYROLL COSTS FOR THE
ASBESTOS PRODUCTS MANUFACTURING INDUSTRIES
Year
Cost (Dollars per Dollar of Sales)
1968
1969
1970
1971
Payroll
0.236
0.258
0.257
0.252
Materials
0.424
0.447
0.459
0.460
Combined
0.660
0.705
0.716
0.712
Source: Annual Survey of Manufacturers U.S. Bureau of the Census
38
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Company Profiles
Presented here are brief descriptions of each of the major asbestos products
manufacturing companies, including (where available) an analysis of their sales by principal
lines of business, recent acquisitions, and other data considered pertinent to an
understanding of their financial status. Salient company financial statistics are shown in
Tables XV11I and XIX.
Johns-Manville Corporation (J-M)
J-M is a diversified manufacturing, marketing, and mining company. It is the largest
asbestos mining and asbestos product manufacturing company and the second largest
producer of fiberglass products in the United States. It is also an important producer of
non-metallic underground pipe systems and lighting fixtures and components.
J-M's sales and earnings by principal product line are presented in Table XX. Each
category contains some contribution from asbestos; overall, approximately 30% of J-M's
revenues are derived from sale of asbestos and asbestos products in general, and 20-25%
relate to S.I.C. 3292 in particular.
J-M earns proportionately more on its sales of fiberglass products and asbestos fibers
than on its other products. In fact, in recent years, approximately 25% of J-M's total sales
and 40% of its pretax profits have come from sales of fiberglass products and asbestos fiber;
asbestos fiber sales alone (both United States and abroad) accounted for about 7% of 1972
sales and 18% of pretax operating earnings.
J-M's principal asbestos mine is located at Asbestos, Quebec, Canada. Based on drilling
results to date, the company estimates that its proven reserves of asbestos are sufficient to
maintain a future average rate of production of up to 600,000 tons of asbestos fiber per year
for more than 70 years. The company also has interests in other asbestos mines and
properties.
J-M's operating profit was $77.5 million on net sales of $796 million in 1972,
compared to $69.5 million on sales of $696 million in 1971. The trends in sales and profit
margin are indicated in the industry financial data tables.
J-M typically has a year-end current asset position equal to about twice current
liabilities. The company still has relatively little long-term debt ($41 million out of about
$520 million debt plus equity capital), although it added $38 million of this in the last two
years.
Reported capital expenditures were $78 million in 1972 and $68 million in 1971.
Depreciation and depletion contributed $21 million to reported cash flow in 1972, and $ 18
million in 1971. Net earnings provided $49 million in 1972 and $46 million in 1971 ($11
million additional came from gain on sale of timberland).
Armstrong Cork Company
Armstrong Cork's sales are concentrated in building products and home furnishings,
including resilient flooring, ceiling systems, carpeting, and household furniture along with
39
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TABLE XVIII
OVERALL CORPORATE PROFIT MARGINS (%)*
OF THE MAJOR ASBESTOS PRODUCT MANUFACTURING FIRMS
Company (Principal Segment) 1971 1970 1969 1968 1967
Armstrong Cork
Certain-Teed
Flintkote
Jim Walter
Johns Manville
National Gypsum
U. S. Gypsum
"Operating Income before depreciation, depletion, and federal income taxes 4- sales.
Source: Standard & Poor's Industry Survey
TABLE XIX
15.5
12.1
10.8
13.0
12.5
12.5
14.8
11.3
7.3
9.4
10.8
11.1
10.1
10.7
14.6
9.1
10.5
11.8
14.5
14.0
14.6
16.0
10.3
10.7
11.9
15.0
18.1
18.1
15.1
6.9
11.6
16.0
14.4
18.2
17.7
CAPITAL EXPENDITURES (AS A PERCENTAGE OF GROSS PLANT)
BY THE MAJOR ASBESTOS PRODUCT MANUFACTURING FIRMS
Firm 1971 1970 1969 1968 1967
Certain-Teed 9.1 7.3 12.2 5.8 5.1
Flintkote 7.1 8.3 5.9 5.7 5.0
Johns-Manville 8.4 8.4 7.7 5.6 7.8
National Gypsum 2.2 3.4 4.5 2.8 3.1
U. S. Gypsum 4.8 6.3 7.3 5.0 5.7
Armstrong Cork 8.8 10.6 16.3 10.9 11.1
Source: Standard & Poor's Industry Survey
40
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TABLE XX
Commercial ;
Construction
Industrial Sp<
Pipe Products
Non-metallic
Non-Product
Income
NET SALES AND
and Industrial Insulations . .
Materials
jcialties .
; and Systems
Minerals
Related (Expense)
TOTAL
JOHNS-MANVILLE PRODUCTS CORPORATION:
EARNINGS BEFORE INCOME TAXES BY MAJOR BUSINESS SEGMENTS
(In millions of dollars)
1972
$122.4
347.5
91.0
147.3
88.1
S796.3
1971
$118.8
301.2
72.3
126.2
77.7
$696.3
Net Sales
1970
$111.7
249.3
64.7
107.9
86.9
$620.4
Earnings Before
Income Taxes and Extraordinary Items
1969
$106.5
267.7
83.0
117.9
73.1
$648.3
1968
$ 94.8
247.8
73.3
108.6
64.8
$589.3
1972
$ 5.0
39.6
3.8
15.1
19.8
(1-1)
$82.2
1971
$ 5.3
33.5
3.0
13.5
19.7
2.9
$77.9
1970
$ 7.8
14.5
.8
8.8
25.8
4.5
$62.2
1969
$11.4
22.7
6.0
18.6
24.5
5.2
$88.5
1968
$11.9
20.7
5.7
17.3
24.7
4.3
$84.6
NOTES:
(1)Includes the results of companies acquired in poolings of interests.
(2) In 1971, the Company adopted the equity method of accounting for certain investments in other companies. The years 1972 through 1970 reflect
the equity in undistributed earnings of such companies. In 1969 and prior, only dividends from such companies are included.
(3)The years 1969 through 1972 reflect the inclusion of foreign subsidiaries in the consolidated financial statements of the Company. In 1968, only
dividends received from foreign subsidiaries are included.
(4)Sales and earnings of all major business segments except Non-metallic Minerals were unfavorably affected by major work stoppages in 1970.
Source: Johns-Manville Form 10-K Annual Report, March 28, 1973.
-------
industrial and other products and services. Floor coverings accounted for 53.1'/r of 1972
sales, ceilings 18.4%, furniture 16.5%, and industrial and other 1 1.9%. Home improvement
and refurbishing accounts for about 50% of total sales, new home building 25%,
nonresidential building 20%, and industrial markets 5%. Foreign sales represent 15% of the
total.
Major building products include a full line of smooth-surface resilient floor materials,
acoustical and other ceiling materials, exterior siding, and insulating materials. The company
is also a national manufacturer of tufted and woven carpets, primarily as a result of the
acquisition of E & B Carpet Mills in 1967. The carpet business has been expanded sharply in
recent years.
Industrial specialties produced by the company include gasket materials, adhesives,
textile machinery supplies, industrial felts and fibrous materials, shoe cushioning products,
and other items.
Thomasville Furniture Industries, a subsidiary, is a leading producer of traditional and
contemporary household furniture.
About 5% of Armstrong's sales are related to asbestos products-principally
vinyl-asbestos floor tile.
GAP Corporation
GAF, primarily known for its chemical products and consumer photographic supplies,
has broadened and diversified its product line through a series of acquisitions. In 1972
sales and pretax income broke down as follows: chemicals 20% and 24%, respectively, photo
products 27% and 11%, business systems 12% and 3%, building materials 34% and 51%, and
industrial products 7% and 12%. Foreign operations contributed 13% of sales.
The company established its position in building products through the acquisition of
Ruberoid Co. in May, 1967. The line includes asphalt roof shingles, roofing and siding
materials, building and roof insulations, asphalt and vinyl asbestos resilient floor tiles, sheet
vinyl floorings, floor finishes, and cleaners for residential and commercial uses.
Chemicals include high-pressure acetylene derivatives, specialty chemicals, dyestuffs
and pigments, surfactants and textile chemicals.
Photo products include the GAF line of films, cameras, projectors, and viewers;
professional products, x-ray products, and graphic arts materials. Perfect Photo, which was
merged at the end of 1971, operates photo finishing plants in 17 cities and distributes a line
of photographic equipment. (In April, 1973 GAF filed an antitrust suit against Eastman
Kodak Co., charging Kodak with monopoly of the photographic industry and asking that
Kodak be divided into 10 separate businesses.)
The business systems line consists of electrostatic copiers, papers and toners, diazo
reproduction products, audio-visual products, microfilm and Shelby business forms.
42
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Industrial products are primarily felts for filtration and polishing, insulation products,
granules, fillers, and asbestos fibers, and precision machine parts.
National Gypsum Company
National Gypsum, (NG), the second largest producer of gypsum building products, also
holds a prominent position in other building products. In addition, through the DMH
division, it is a leading producer of mobile homes. Sales for 1972 broke down as
follows: building products (primarily gypsum products) 50%, cement 15%, glass and glass
construction 13%, manufactured housing 13%, and ceramic tile 9%. Residential construction
accounts for about one third of sales and nonresidential and non-building construction
together account for about one third; mobile homes represent about 10%, with consumer,
industrial, and remodeling and repair markets contributing roughly 20%.
National Gypsum is believed to account for about 25% of gypsum industry volume.
(Domestic gypsum reserves total close to some 300 million tons and substantial deposits are
also owned in Nova Scotia.)
Cement operations are conducted by Huron Portland Cement and Allentown Portland
Cement.
DMH Corp. is the sixth largest mobile home producer and also produces factory built
housing and travel trailers.
Tile manufactured includes glazed and unglazed ceramic tile and quarry tile. Other
important products are asbestos-cement siding and roofing, latex and oil-base interior and
exterior paints, fibre insulation boards, metal lath. Subsidiaries, acquired in the last few
years include Multicolor Corp. and Binswanger Glass.
Certain-Teed Products Corp.
Certain-teed produces and distributes a variety of building products and materials.
Sales for 1972 broke down as follows: Certain-teed Saint Gobain Insulation 21%, Pipe and
Plastics 18%, Shelter Materials 27%, Gustin-Bacon 3%, and Distribution 31%.
Shelter Materials include the manufacture of roofings, sidings and sheathings,
acoustical ceiling systems, vinyl building products, architectural products, and millwork.
Fiber glass insulation produced by CSG is also marketed.
Certain-teed Distribution Group includes The William Cameron Co., serving the
Southwest, and Middle Atlantic Millwork Co., serving the Middle Atlantic states. The
company also distributes pipe and related equipment.
The Pipe and Plastics Group produces asbestos-cement pipe (the main product line) of
both pressure and non-pressure variety for water systems,sewer, irrigation, air duct and other
applications along with PVC pipe for various building and industrial markets.
Gustin-Bacon produces a wide range of products used in the construction, automotive,
transportation, mining, petroleum and reinforced plastics industries.
43
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Certain-teed Saint Gobain Insulation Corp., now wholly owned, operates six plants and
produces fiber glass insulation and products along with fiber and mechanical products. In
1972, Certain-teed acquired the remaining 18% interest in CSG and also acquired certain
patents of Saint-Gobain-Pont-a-Mousson.
Real estate operations are conducted by four majority-owned subsidiaries whose
activities include land selection and development, engineering and architectural services,
manufacturing, construction, property management, and financing. Valley Forge Corp., now
66%-owned, is included in this group.
Cie. de Saint-Gobain-Pont-a-Mousson, the large French glass, steel and construction
group, recently acquired 30% of the stock of Certain-teed Products Corp. In accordance
with previously reported agreements, Saint-Gobain will hold about 35% of Certain-teed's
stock by the year-end.
Other holders in Certain-teed include Turner & Newall, Ltd., of Britain, with 10%,
Mellon National Corp. of Pittsburgh, with 5%, and INA Corp., the Philadelphia insurance
group, 3%. INA also owns about 9% of Cie. Financiere de Suez, the French holding
company which owns, in turn, about 19%, of Saint-Gobain.
Flintkote
Flintkote, one of the major factors in the asbestos products industry, manufactures
building materials and a wide range of related industrial and consumer products. The
company's sales break down approximately as follows: gypsum products 11%, roofing and
insulation 17%, flooring products 11%, industrial products 3%, pipe products 5%, contract
construction aggregates and concrete products 33%, lime products 4%, cement 9%, and
miscellaneous 1%. Residential building accounted for 23% of 1972 sales, non-residential
construction 32%, non-building construction 23%, repair and modernization work 13%, and
other markets 9%.
The Building Products Group produces gypsum board, lath and plaster; partition
systems; asphalt and vinyl asbestos floor tile and composition flooring; roofing and
insulation products; ceiling tile; and prefabricated chimneys. The group's pipe products
include ultra high density polyethylene plastic pipe and tubing and asbestos pipe. The Stone
Products Group furnished non-residential construction markets with aggregates and concrete
products such as ready mixed and dry concrete and crushed stone. The Cement Products
Group produces the basic types of portland cement at five cement plants with annual
indicated capacity of 2.5 million tons.
In June, 1972, the company sold its packaging operations, discontinued asbestos
mining in Quebec, Insulrock manufacturing in Virginia, and fiber pipe manufacturing in
New York and California. (Discontinued operations contributed sales of $37 million in 1972
and $60.1 million in 1971.)
Jim Walter Corp.
Jim Walter Corp. (JWC), a major building materials producer and the leader in shell
(partially-finished) housing, has substantially enlarged its base of operations in recent years
44
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through acquisitions. These included Celotex, U.S. Pipe, and most recently Panacon.
Panacon is a leading asbestos products company, which in turn owns Philip Carey, a
producer of asbestos roofing and paper products.
In fiscal 1971-2 JWC acquired Panacon Corp. for about $73 million. The company
also acquired four other smaller building materials producers and sold its Style Mar Homes
subsidiary.
JWC's $882 million revenues for 19712 broke down as follows: mineral and fiber
products, including hardboard, gypsum products, insulation products, fibreboard, roofing
and carpeting, 31.4%; pipe and related products (including cast iron, concrete, steel and
plastic pipe and fittings), 24.7%; home building (partially-finished Jim Walter homes), 9.9%;
metal and wood products, 16.6%; stone and concrete products, including architectural stone
and concrete products, 4.6%; paper distribution and conversion, 7%; sugar operations
(reflecting operations of the South Coast division), 3.6%; oil and gas operations, including
on-shore and off-shore oil and gas exploration and development, 0.6%; and other 1.6%.
Markets divide as follows: residential, 23%; nonresidential, 14%; renovation, 16%.; water
and sewer distribution, 14%; homebuilding (Jim Walter homes), 8%; industrial, 11%; and
other 14%..
First Brentwood Corp., a Los Angeles savings and loan company (now combined with
Aetna Savings and Loan which was acquired in November, 1971) is unconsolidated.
JWC has agreed to acquire Christian Wood Products, a lumber producer; and
Johns-Manville's Crown Tuft carpet operations (annual sales of $18 million).
About 90% of the company's partially finished homes are sold on credit. On August
31, 1972, JWC held installment notes receivable of $470,388,000, with $415,996,000 due
after one year.
45
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PART II: ECONOMIC IMPACT ANALYSIS
47
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A. PROPOSED EFFLUENT QUALITY STANDARDS
To carry out the objectives of the Federal Water Pollution Control Act Amendments of
1972, the asbestos products manufacturing industry is required to achieve by July 1, 1977,
effluent limitations consistent with the "best practicable" control technology (B.P.T.); and
by July 1, 1983, effluent limitations consistent with the "best available" technology.
(B.A.T.)
The water effluent quality standards and the applicable technologies and costs for
attaining these standards by that segment of the asbestos products manufacturing industry
that constitutes the subject of this study are described in the appropriate Effluent Guideline
Development Document. The specific product categories for which effluent guidelines were
developed are:
Asbestos-cement pipe
Asbestos-cement sheet products
Asbestos paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
Appendix A shows for each product category, the raw waste characteristics and the
effluent quality that satisfies the BPT and BAT standards. In all cases, zero-discharge is the
only standard applicable to BAT. Thus, fresh water taken into plants equals the sum of
water incorporated in wet product and any evaporative losses. Among the benefits thus
realized is a 100 percent reduction of all pollutant constituents, including suspended and
dissolved solids, alkalinity, and where applicable, the biological and chemical oxygen
demands (BOD and COD).
B. EFFLUENT TREATMENT TECHNOLOGIES
The technologies described below have been advanced in the Guideline Development
Document as suitable for meeting the standards set forth in Appendix A. Standards were
not developed for pretreatment of discharges to municipal treatment plants; accordingly, no
technologies were proposed for effluent pretreatment.
In all cases, the standards and technologies applicable to new sources any sources
constructed after January 16, 1974, the publication date of the proposed standards at
least equal those proposed for BPT levels.
49
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Product Category
Applicable Technologies to Satisfy:
Asbestos-cement pipe
Asbestos-cement sheet
Asbestos paper
Asbestos millboard
Asbestos roofing
Asbestos floor tile
BPT Standards
Sedimentation and
PH control
Sedimentation
and PH control
Sedimentation
100% process
water recycle
Sedimentation
Coagulation and
sedimentation
BAT Standards
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
New Source Standards
Sedimentation and
PH control
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
C. CURRENT LEVELS OF POLLUTION ABATEMENT
To facilitate discussion and understanding of the current state of application of the
treatment technologies discussed previously, these have been coded with respect to the
various product categories as follows:
Product Category
Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
Code
A
B
C(BPT)
D (BAT)
A
B
C(BPT)
D (BAT)
A
B(BPT)
C (BAT)
A
B
C (BPT & BAT)
A
B(BPT)
C (BAT)
A
B(BPT)
C (BAT)
Explanation
No treatment
Sedimentation only
Sedimentation and
PH control
100% recycle
No treatment
Sedimentation only
Sedimentation and
PH control
100% recycle
No treatment
Sedimentation
100% recycle
No treatment
Sedimentation
100% recycle
No treatment
Sedimentation
100% recycle
No treatment
Coagulation and
Sedimentation
100% recycle
50
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A survey of the asbestos products manufacturing plants shows, for a cross-section of
the industry, the effluent treatment pattern shown in Appendix B. The existing utilization
trend may be summarized as follows in terms of the percentages of the total number of
plants and the total effluent discharge by each product category.
Product Category
Asbestos-cement Pipe
(Total Discharge =
2.99 x 106gpd)
Asbestos-cement Sheet
(Total Discharge =
1.84x 106gpd)
Asbestos Paper
(Total Discharge =
5.3 x 106gpd)
Asbestos Millboard
(Total Discharge =
1.33x 106gpd)
Asbestos Roofing
(Total Discharge =
0.59 x 106gpd)
Asbestos Floor Tile
(Total Discharge =
1.96x 106gpd)
Percentage of Plants Using
Treatment Technology
Alternatives
A B C D
14 43 29 14
38 38 9 15
14 57 29
29 43 28
56 33 11
77 23 0 -
Percentage of Discharge
Treated by Technology
Alternatives
A B C D
16 43 41 0
41 51 80
21 79
38 62 -
44 56 -
61 39 -
The above breakdown may be rendered as follows to indicate the percentage of the
existing plants that do not currently meet the BPT and BAT effluent quality standards:
Product Category
Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
Percentage of Plants Not Now Meeting
BPT Standards
57
76
14
72
56
77
BAT Standards
86
85
71
72
89
100
51
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It is difficult to arrive at a realistic estimate of the proportion of the total discharge
that goes into public sewerage systems. However, for those plants with no treatment
facilities whatsoever, (alternative A plants), the following percentages are estimates of the
untreated waste Hows in each category that go to public sewers:
Asbestos-cement Pipe - 43%
Asbestos-cement Sheet - 62%
Asbestos Paper - 100%
Asbestos Millboard - 100'7r>
Asbestos Roofing - 81%
Asbestos Floor Tile - 84%
D. WATER TREATMENT COSTS
The "typical plant" cost data which constitute the basis for subsequent derivation of
the industry water treatment costs and potential economic impact have been developed on
the basis of assumptions discussed in the Effluent Guideline Development Document.
For each product category, a typical plant was selected on the basis of a relatively high
quality of the treatment facilities, the quantity of waste water discharged, the ready
availability of cost data, and the adequacy of verified information regarding the
effectiveness of the treatment facility. Waste flows were selected to reflect the condition at
the larger plants for each product category.
Specific applicable control technologies and costs were developed for plants
discharging their effluents into navigable waters. As such, plants served by sewers would
experience treatment costs lower than those estimated herein. It should also be borne in
mind that factors such as age and size of production plants, level of implementation of
in-plant process controls, and specific manufacturing processes and practices would directly
affect the quality and quantity of generated effluents and therefore the water treatment
costs at a given facility. Thus, it is acknowledged that, in fact, facilities do exist with higher
than "typical" water treatment costs. However, the technique of using a "typical" plant as
representative of a particular product category does not either reveal such high-cost plants
nor does it indicate the size of these higher costs.
Additionally, in developing the costs to various plants in a product category, it is
assumed that the only variable that significantly affects costs is the end-of-pipe volume of
waste water discharged to the treatment facility. It is further assumed that the installed
control facilities require minimum space and thus no additional land requirement beyond
that currently occupied by the manufacturing plant would be involved.
Appendix C shows the production and effluent discharge data of plants considered
"typical" of each of the product categories for which treatment costs and technologies were
developed.
52
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1: Capital Investment Costs
In the derivation of "typical plant" capital investment costs, the Guidelines
Development Document includes all capital expenditures required to bring the treatment or
control technology into operation. Included, as appropriate, are the costs of excavation,
concrete, mechanical and electrical equipment installed, and piping. In addition, an amount
equal to from 15 to 25 percent of the total of the above was added to cover engineering
design services, construction supervision, and related costs. Land costs are assumed to be
zero.
Table XXI presents the estimated capital investments (in 1971 dollars) for a range of
effluent capacities for the asbestos-cement pipe segment of the industry. Using as a basis the
capital investment of the typical plant facility, the corresponding investments for other size
treatment units within the range evaluated were derived using the "six-tenth rule," defined
as follows:
Cost of Unit X = Cost of Typical Unit
Capacity of Unit X °-6
Capacity of Typical Unit
where X is the unknown treatment facility.
TABLE XXI
ASBESTOS-CEMENT PIPE PLANTS:
WATER TREATMENT CAPITAL INVESTMENT AS A
FUNCTION OF TREATMENT CAPACITY
Effluent Treatment Capital Investment ($) To Satisfy
Capacity (IP3 Gals/Day) Level B Level C Level D
(Intermediate) (BPT Standards) (BAT Standards)
100 47,000 76,500 116,000
250 82,000 133,000 201,000
500* 124,000 201,000 305,000
1,000 188,000 305,000 462,000
1,500 240,000 389,000 590,000
"Typical Plant Capacity
Source: Based on "typical plant" cost contained in the Guidelines Development Document.
Appendices D to H show corresponding capital cost estimates for the other asbestos
product categories. The cost figures shown in these tables reflect the costs incurred in
attaining any of the specified standards, by facilities that are discharging raw effluent. Thus,
the cost to a plant that is currently treating its effluent to less than a given standard is the
additional cost of upgrading its facility to meet the said standard. To a first approximation,
53
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it is assumed that this upgrading cost equals the difference between the costs of attaining
the higher and lower levels of treatment.
It should be indicated that the decision as to whether a plant not now meeting the BPT
standards should install additional facilities to satisfy only these standards or expend more
funds now to meet the BAT standards must be made at the corporate level, taking into
account the company's planning strategy and financial position. Where funds are readily
available and where corporate policy justifies it, it may be advantageous to upgrade in one
step to the BAT standards. In other instances, corporate wisdom may dictate distributing
the costs over a time span stretching to 1983.
2: Annual Treatment Costs
The annual water treatment cost is comprised of the costs of capital, depreciation,
operation and maintenance, and energy and power.
Capital cost is taken, in all cases, as 8 percent of the capital investment, a figure which
is considered reasonably accurate for the industry. Depreciation is taken on a straight line
basis for 20 years, or 5 percent of the total investment.
Operation and maintenance costs include labor, materials (including chemicals), solid
waste disposal, effluent monitoring, added administrative expense, taxes, and insurance. Due
credit was applied in technologies involving water recycling. Power costs are based on a rate
of $0.025 per kilowatt/hour.
The annual treatment costs are shown in Appendices I to N for ranges of effluent
treatment capacities for the various product categories. In the absence of detailed cost
breakdown, the operation and maintenance and energy and power costs are assumed to vary
directly with the treatment capacity, using as a basis the costs of the so-called typical plant.
The variation of treatment cost as a function of capacity is shown graphically in Figures 14 to
19 for the product categories of interest.
3: Specific Plant Costs and Projected Industry Costs
On the basis of the projected capital and annual treatment costs shown in Appendices
D to N and knowing the treatment technologies currently being practiced by the surveyed
cross-section of the industry as shown in Appendix B, estimates have been made, for each
plant in the sampling, of its incurred capital and annual costs to bring its effluents in
compliance with the BPT and BAT standards. These are shown respectively in Appendices O
and P. Each plant's costs are based, where data are available, on its actual reported effluent
discharge rate. In a few instances where effluent statistics are not available, it has been
assumed that the costs are equivalent to those of the "typical plant" described in the
Effluent Guidelines Development Document, as defined previously.
After a careful review of the list of plants producing each product of interest, as well as
discussions with informed members of the asbestos manufacturing community, it is believed
that the listed plants account for the following proportions of the current total shipments of
each of the products evaluated:
54
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1.40
1.20
1.0
_o
CD
C 0.8 -
c
| °'6
re
£
H
w
03
+->
i
0.4
0.2
Level D Treatment
(1983 Standards)
Level C Treatment
<1977 Standards)
250
500 750 1,000 1,250
Effluent Treatment Capacity, MGD
1,500
1,750
Source: Based on "typical plant "costs in Guidelines Development Document
FIGURE 14 ASBESTOS-CEMENT PIPE PLANT: WATER TREATMENT COST VERSUS
EFFLUENT TREATMENT CAPACITY
55
-------
2.50
£ 2.00
o
O
^J
C
V
f-1
TO
£
1.50
1.00
0.50
100
-Level D Treatment
(BAT Standards)
Level C Treatment
(BPT Standards)
200
300
400
500
600
700
800
Effluent Treatment Capacity, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
FIGURE 15 ASBESTOS-CEMENT SHEET PLANT: EFFLUENT TREATMENT COSTS AS A FUNCTION
OF EFFLUENT TREATMENT CAPACITY
56
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0.8
.o
o
^
c
0>
0.7
0.6
0.5
0.4
0-3
0.2
0.1
Level C Treatment
(BAT Standards)
-Level B Treatment
(BPT Standards)
250 500 700 1,000 1,250
Effluent Treatment Capacity, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
1,500 1,750
FIGURE 16 ASBESTOS PAPER PLANT: WATER TREATMENT COST AS A FUNCTION
OF EFFLUENT TREATMENT CAPACITY
57
-------
l/l
oo
1.3
1.2
_o
0 1.1
5
+J
v>
(3
1-1
I i.o
0.8
- Level C Treatment
(BPT and BAT Standards)
100
200
300 400 500 600
Effluent Discharge Rate, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
700
800
900
FIGURE 17 ASBESTOS MILLBOARD PLANT: WATER TREATMENT COST VERSUS
EFFLUENT TREATMENT CAPACITY
-------
Level C Treatment
(BAT Standards)
Level B Treatment
(BPT Standards)
100
200
300 400 500 600
Effluent Treatment Capacity, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
700
800
900
FIGURE 18 ASBESTOS ROOFING PLANT: WATER TREATMENT COSTS VERSUS
EFFLUENT TREATMENT CAPACITY
-------
O\
O
O
8
O
4-
c
v
3
0.40
0.30
0.20
0.10
Level B Treatment
(BPT Standards)
Level C Treatment
"(BAT Standards)
100
200 300 400 500 600
Effluent Treatment Capacity, MGD
700
800
900
Source: Based on "typical plant" costs in Guidelines Development Document
FIGURE 19 VINYL-ASBESTOS TILE PLANT: WATER TREATMENT COSTS VS. EFFLUENT TREATMENT CAPACITY
-------
Asbestos-cement pipe - 95-100%
Asbestos-cement sheet 9095%
Asbestos paper - 95-100%
Asbestos millboard - 95-100%
Asbestos roofing - 95-100%
Asbestos floor tile - 60-70%
The capital investment and the annual water treatment costs derived in Appendices O
& P may be aggregated and scaled-up to indicate the total costs to each industry segment of
meeting the BPT and BAT standards. These aggregates are shown in Tables XXII and XXIII.
Thus, the manufacturers of the products studied can anticipate a total capital investment of
about $3 million and an annual cost of $1.4 million to bring their facilities in compliance
with the BPT guidelines. To meet the BAT standards, the capital investment and annual
costs would escalate to $6.5 million and $2.9 million respectively.
For purposes of subsequent assessment of the corporate financial impact of these
expenditures on individual companies, these costs have been assembled for all the product
lines of the various plants of the major asbestos products manufacturing companies. These
are shown in Table XXIV.
TABLE XXII
ESTIMATED TOTAL COSTS TO THE ASBESTOS PRODUCTS MANUFACTURING
INDUSTRY OF MEETING THE BPT WATER EFFLUENT STANDARDS
Product Category Costs Incurred by Costs Incurred by
Listed Plants ($) Total Industry ($)
ital Annual Capital Annual
Asbestos-cement Pipe 666,000 327,500 700,000 345,000
Asbestos-cement Sheet 622,000 424,900 655,000 472,000
Asbestos Paper 617,000 180,600 650,000 190,000
Asbestos Millboard 140,000 85,900 147,000 90,000
Asbestos Roofing 98,000 44,600 103,000 47,000
Asbestos Floor Tile 404,000 147,100 673,000 245,000
Total $2,928,000 $1,389,000
Individual companies can anticipate capital investments ranging from $60,000 to
$731,000 to bring their facilities in compliance with the BPT standards, and from $144,000
to $1.5 million to satisfy the BAT standards. As for annual costs, these range from a low of
$24,000 to a high of $336,000 to achieve the BPT standards, and from $98,000 to
$776,000 to meet the BAT guidelines.
61
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TABLE XXI11
ESTIMATED TOTAL COSTS TO THE ASBESTOS PRODUCTS MANUFACTURING
INDUSTRY OF MEETING THE BAT WATER EFFLUENT STANDARDS
Product Category
Costs Incurred by
Listed Plants ($)
Costs Incurred by
Total Industry ($)
Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
Total
Capital
1,585,000
1,291,000
1,190,000
140,000
243,000
1,051,000
TABLE
Annual
573,500
1,036,900
582,800
85,900
65,900
214,300
XXIV
Capital
1,668,000
1,434,000
1,253,000
147,000
256,000
1,752,000
$6,510,000
Annual
604,000
1,152,000
614,000
90,000
69,000
357,000
$2,886,000
WATER TREATMENT COSTS. BY COMPANIES, TO MEET
THE BPT AND BAT EFFLUENT STANDARDS
BPT Standards
Company Code
AA
BB
CC
DD
EE
FF
GG
HH
BAT Standards
AA
BB
CC
DD
EE
FF
GG
HH
Capital Investment ($)
560,000
390,000
731,000
156,000
174,000
60,000
237,000
157,000
1,503,000
665,000
1,343,000
435,000
395,000
144,000
294,000
256,000
Annual Cost ($)
336,000
199,100
308,800
58,800
44,200
24,400
62,100
110,300
776,600
262,100
775,700
110,800
138,000
162,000
98,200
189,400
62
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It is instructive to express these capital expenditures for effluent treatment in terms of
the minimum annual capital outlays of each of the firms. These ratios are shown in Table
XXV, indicating that the new water treatment capital investments required to comply with
the BPA and BAT treatment levels constitute in general only about 1 percent of the normal
annual capital investment (in all product lines) of these firms.
TABLE XXV
NEW WATER TREATMENT COSTS (BY MAJOR ASBESTOS PRODUCTS
MANUFACTURING FIRMS) AS A PROPORTION OF
ANNUAL CAPITAL EXPENDITURES
Company
Code
Estimated Minimum
Annual Capital
Expenditure ($1Q6)
New Water Treatment Costs
Amount
($106)
0.295
0.205
0.383
0.084
0.090
0.03
0.126
0.084
NOTES:
1. Dollar investment is assumed to be funded over a period of two years (1975 and 1976).
2. Funding assumed to be funded over 3 years.
Source: Company Annual Reports and Contractor's Estimates.
AA
BB
CC
DD
EE
FF
GG
HH
65
13
29
30
45
0.75-2.0
20
14
jrdsl
% of Total
Cap. Exp.
0.5
1.6
1.3
0.3
0.2
1.5-4.0
0.6
0.6
BAT
Amount
($106)
0.525
0.231
0.469
0.154
0.140
0.05
0.102
0.091
Standards^
% of Total
Cap. Exp.
0.8
1.8
1.6
0.5
0.3
2.5
0.5
0.7
E. ECONOMIC IMPACT ANALYSIS
1. Methodology
The purpose of the detailed cost analysis conducted above is to provide the essential
basis for arriving at realistic conclusions regarding the specific impacts of incurred water
treatment costs. The specific economic parameters that are vulnerable to impact, and which
are to be evaluated within the scope of this study are:
i. Product price effects
ii. Financial effects
iii. Production effects
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iv. Employment effects
v. Community effects
vi. Balance of payment effects
It is concluded that whereas certain of these parameters must be evaluated on a
plant-by-plant basis (e.g. community effects), others are more meaningfully assessed on a
corporate basis (e.g. financial effects), while still others must necessarily be analyzed on an
industry-wide basis (e.g. product price, production, and employment effects). This approach
has the advantage of recognizing disparities due to geographical location, corporate
organization, and the market climate of specific product categories.
After carefully evaluating several alternative parameters that can be applied as a
measure of economic impact on specific plants, it is felt that the most meaningful approach
for the group of industries studied would be to relate the added annual cost of water
treatment required to comply with a specific standard to the value of sales of a given
product at each plant. It should be recalled that the prior analysis of the cost structure of
the asbestos products manufacturing industry, Part I, based on aggregate statistics from the
U.S. Bureau of the Census, indicated an apparent pre-tax profit margin of about 9 percent
of sales. On the strength of discussions with persons involved in and knowledgeable of the
asbestos products manufacturing industry, it is reasoned that this figure can be justifiably
applied to the product categories under study. These discussions also lead to the conclusion
that water treatment costs amounting to more than about 4.5% of sales would make
continued operation of a product line or plant very unattractive. Thus, the subsequent
assessment of the sensitivity of a product line or plant to the added water treatment costs,
and in turn its probability of discontinuing operations, is based on how closely these costs
approach or exceed 4.5% of sales. A new water treatment cost in relation to sales of 4.5% or
higher is an indication that a plant or product line is vulnerable.
2. Impact of the BPT Standards
a. Price Effects
The price of a manufactured product is dictated to a large degree by such economic
determinants as manufacturing cost and its variation among various producers of the same
product, demand/supply balance, and price/performance balance vis-a-vis competitive
substitute materials and exports. The prices of the product categories that form the subject of
this study are liable to be impacted differently by these various considerations and therefore
deserve independent evaluations.
Asbestos-cement Pipe. This product is used principally for water-distribution systems
(high-pressure pipe) and for sewer systems (low-pressure pipe). In the former application, it
competes with steel, cast iron, plastics and concrete; in the latter, it competes with vitrified
clay, concrete, and some cast iron, where it is used as conduit for telephone or electrical
wiring. Asbestos cement is one of the least costly pipe materials, being only more expensive
than locally produced concrete pipe. This factor should help to retard the penetration of
other pipe products into the existing markets for asbestos cement pipe. There is also the
added fact of considerable inertia to change on the part of the civil engineering and
64
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construction professions. Thus, the modest growth rate of perhaps 5 to 7 percent per year
recently experienced by this product should continue for the next five to ten years.
While the output of asbestos-cement pipe has shown a general upward trend in recent
years, the Chemical and Engineering News quoted price for the most popular types and sizes
of pipe has remained about stagnant, as shown in Table XXVI. Apparently, the increased
cost of raw materials, supplies, labor, and other manufacturing cost items in the past 5 to 10
years has not been passed on to the consumer. On the one hand, this may be a reflection of
process and practice improvements which have resulted in increased productivity and lower
unit manufacturing costs. On the other, it may be an indication of a realization, on the part
of asbestos-cement pipe producers, of the rather tenuous price/performance position of
asbestos-cement pipe relative to the competing substitute materials discussed previously.
TABLE XXVI
C&EN QUOTED PRICE TREND FOR 6-INCH AND 12-INCH
ASBESTOS-CEMENT PIPE (CARLOAD LOTS)
Date Pipe Diameter Quoted Delivered Price ($)
(Inches)* Los Angeles New Orleans
January 1966 6 1.40 per ft. 1.30 per ft.
12 2.19 2.19
January 1968 6 1.60 1.54
12 1.96 1.96
January 1970 6 1.39 1.31
12 2.06 2.06
June 1973** 6 1.38 1.35
12 2.10 2.10
*6-inch municipal water pipe; 12-inch sewer pipe
''Contractor's Estimates
Source: C&EN
Another worthwhile consideration to keep in mind in attempting to forecast price
trends in the asbestos-cement pipe and other asbestos-based product markets is the role of
the largest manufacturer. Specifically for asbestos-cement pipe, it is estimated that at least
50 percent of the sales are attributable to Johns-Manville Corporation, which operates a
number of large multi-product plants. It is thus in a position to benefit from the economics
of scale and common facilities, and, because of its dominant posture, would be expected to
become the price trend-setter in its product and/or market areas.
Partly off-setting this factor is the fact that asbestos products plants tend to serve
restricted regional markets. Thus it is possible for prices to be passed-on or frozen
regionally, irrespective of the decisions of the so-called trend-setter whose plants are located
65
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outside the region in question. The analysis herein is not sufficiently specific or detailed to
determine the precise action that probably would be taken by each individual producing
plant.
In light of the above considerations, along with the fact that the asbestos-cement
manufacturing industry's additional annual costs for meeting the BPT water standards
amount to only 0.2 percent of estimated 1972 sales ($345,000 versus $156 million), Table
XXII, it is believed that these additional costs would not, of themselves, result in a
significant industry-wide increase in prices. Smaller producers in certain regional markets
may be able to pass-on their water treatment costs, but even in such cases, the resultant
price increase would be insignificant, amounting to only about 1 percent.
Asbestos-cement Sheet. Asbestos-cement sheet refers to a broad family of corrugated
and flat board products used in the construction industry for roofing and siding. This family
of products, in many respects, has similar properties and market acceptance to the pipe
products. It competes principally with masonry, galvanized steel and aluminum, plastics,
wood, and asphalt. However, it is generally more expensive than corrugated steel,
competitive with aluminum sheets, and less expensive than conventional concrete blocks
and built-up roofing.
In the United States, asbestos-cement sheets are used principally for industrial
buildings (particularly fertilizer plants and other applications where corrosion is a problem),
warehouses, and in similar cost-sensitive markets. It is also used to a limited degree as a
siding in the residential market.
In recent years, the growth of the market for asbestos-cement sheets in the United
States has lagged behind that of the construction industry in general, amounting to only a
few percent per year. It is expected that only minimal growth in the next five to ten years
would occur. Achieving a higher than nominal growth would be predicated on the level of
effort exerted to exploit the market potential for this product in the developing nations of
Africa, Asia, and South America, since these are still cost-sensitive markets where high
volumes of building, particularly housing, are expected in the years ahead.
A stagnant market for sheet products is hardly conducive to price increases. A priori, it
is not expected that a price rise as a result of the additional costs of meeting the BPT
effluent standards would occur. Even if such costs were passed on, they amount to a price
increase of about 0.5 percent of sales, and this is regarded as insignificant.
Asbestos Paper, Millboard, and Roofing. Of these products, the related products,
paper and roofing command markets that are large enough to deserve attention. Asbestos
paper is used for flooring underlay, pipeline felt, roofing, gaskets, and electrical insulation.
These applications represent growing markets and this trend is expected to continue.
Insulating applications may represent an exception since a number of synthetic materials
may erode the market for electrical paper.
The costs incurred by asbestos paper, millboard, and roofing manufacturers to meet
the BPT effluent standards amount to 0.2%, 1%, and 0.8% respectively of their sales of these
products. Accordingly, one may justifiably conclude that these costs can be absorbed by
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the manufacturers. Even if they are passed on to the consumer, the resulting price increase
will not significantly alter the market growth rate of these products.
Asbestos Floor Tile. The asbestos floor tile market has been less than spectacular in
recent years as a result of strong competitive pressures from such products as carpeting and
sheet goods (e.g. linoleum). This pressure is expected to intensify in the future and should
serve as a damper on price increases. Specifically, the additional cost of water treatment to
bring facilities in compliance with the BPT effluent guidelines is estimated at about 0.1% of
1972 sales. This is insignificant and whether or not it is passed on should not in any way
effect the market situation of asbestos floor tiles vis-a-vis competitive substitute products.
b. Financial Effects
As indicated earlier, it appears most meaningful to discuss the financial impact of water
treatment costs on a company-by-company basis. Thus, the estimated capital investment
and annualized costs as given previously on a plant-by-plant basis have been aggregated to
derive a sum total for each of the eight major asbestos products manufacturing companies.
These firms represent the major producers of the asbestos products of interest, and it is
estimated that they account for about 80% of the sales value. The data for the individual
companies are presented in Table XXVII.
TABLE XXVII
WATER TREATMENT COSTS TO MEET PROPOSED STANDARDS
IN ASBESTOS PRODUCTS MANUFACTURING*
Capital Investment
Company Code
BPT
BAT
Capital Charge
+ O&M Annualized
BPT BAT
AA
BB
CC
DD
EE
FF
GG
HH
0.56
0.39
0.73
0.16
0.17
0.06
0.24
0.16
1.50
0.66
1.34
0.44
0.40
0.144
0.29
0.26
$MM
0.34
0.20
0.31
0.06
0.04
0.024
0.06
0.11
0.78
0.26
0.78
0.11
0.14
0.162
0.10
0.19
Unadjusted basis - 1971 constant dollars.
Source: Contractor's estimates
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Profitability Effects. Before using the data in Table XXVII which are in constant 1 971
dollars, it should be emphasized that the financial impact as seen by any individual company
will be measured in terms of current dollars, i.e., as an increase in cost of operations and
capital investment measured in the same dollars as the company's financial results to be
reported in a future accounting period. To a good approximation, the impact in 1972
dollars may be synthesized by inflating the data in Table XXVII by 5% and relating the
resultant figures to the reported sales and operating profits of these companies for 1972.
This is shown in Table XXVIII. On the assumption that these water treatment costs
expressed in 1972 dollars inflate to 1977 dollars at about the same rate as asbestos products
sales, then the ratios of Table XXVIII will remain relatively stable. However, even if there is
some upward shift, the important point is that they are so close to zero as to be well within
the limits of the companies' assumed ability to predict year-to-year variations in sales or
profit margin.
TABLEXXVHI
FINANCIAL IMPACT OF THE BPT STANDARDS ON THE MAJOR ASBESTOS
PRODUCTS MANUFACTURING COMPANIES
Company Code
AA
BB
CC
DD
EE
FF
GG
HH
"Annualized" Costs
of Treatment (in
1972 Dollars)1
($MM)
0.357
0.210
0.326
0.063
0.042
0.025
0.063
0.116
Percent
1972
Total Co.
Sales
nil
nil
nil
nil
nil3
nil
nil
nil
Percent of
1972 Total
Oper. Profit
Before Taxes
0.5
0.5
0.6
nil
nil3
LIE
nil
nil
"Annualized" Costs of
Treatment - 1972
Dollars-Expressed In
Terms of Asbestos
Operations Only2
% of Sales
nil
nil
nil
nil
nil3
nil
nil
nil
NOTES:
1. Table 6 data (1971 dollars) inflated 5%.
2. That is, dividing Column 2 by estimated asbestos products sales only.
3. Denotes a figure below 0.5%
E = Estimated
Source: Contractors estimates; company annual reports.
In the last column of Table XXVIII, to estimate the impact of water treatment costs -
not on a company's total sales, but only on its asbestos products sales - these costs have
been divided by an estimate of the aggregate value of each company's 1972 sales of asbestos
products of interest. The calculation in all cases gave a result of under 0.5% of sales. The
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actual figures are subject to considerable variation, depending on actual production levels,
transfer prices, and net shipments to market. However, it is felt that the results presented
give a reasonably good picture of the order of magnitude of the cost impact-in all cases it
appears to be less than 0.5% of sales. The cost measured as a percentage of product sales is,
of course, magnified when expressed as a percentage of operating profit-inversely as the
profit margin on manufacturing. Thus, if an overall 9% pre-tax margin is shown to be typical
in manufacturing the types of asbestos products under study, ,the ratios based on sales
would be increased by a factor of 11.1 when expressed in terms of profits from asbestos
manufacturing; in all cases studied, the impact on profits would then be less than 6%.
Capital Availability. The range of estimated capital investment requirements to meet
the BPT standards is $0.16 to 0.73 million. This may be put in the perspective of each
company's operation as previously shown in Table XXV, relating these amounts to each
company's level of total capital spending.
In Table XXV, estimates have been made of the minimum annual levels of capital
expenditures over the near term for each of the companies studied, based on the recent
pattern as reported by each company. To keep the comparisons on a consistent basis, these
minimum assumed levels are expressed in constant 1972 dollars. The dollar investment
requirements for water treatment, also expressed in constant 1972 dollars, were obtained
from the values in Table XXVII inflated 5%. For comparison with each company's
minimum level of total capital expenditures, one may assume that the amounts to be spent
on water treatment will be spread over two years (i.e., 1975 and 1976) to meet the BPT
standards, and the amounts required to meet the BAT standards will be funded over a
three-year period.
It is clear from the table that the burden imposed by such capital investment
requirements is not of large proportions when viewed in this light.
c. Production Effects
Appendices Q to V represent a plant-by-plant compilation, for each product category,
of the water treatment costs required to comply with the BPT standards as a percentage of
the estimated 1972 sales.
Asbestos-cement pipe (App. Q). Of the 14 plants tabulated, only eight would incur
any expenses to bring their present treatment facilities in compliance with the BPT
standards. As a percent of sales, these expenses range from 0.02 to 1.3%. As such, it is not
expected that any of these plants would be liable to adverse production impact as a result of
the added cost of meeting the BPT effluent guidelines.
Asbestos-cement Sheet (App. R). All but 3 of the 13 plants surveyed would incur
annual expenses, ranging from 0.05% to 4.1% of sales, to meet the BPT standards.
Potentially, the maximum impact would be experienced by SS-3, a very small pfent with
about $1 million in sales, located in the Southern United States or Puerto Rico.
Asbestos Paper (App. S). Only two plants, out of 12, will be required to up-grade their
facilities to meet the BPT standards. For these, the expenditures amount to 1.44% and
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0.75% of sales, and they are thus not considered economically sensitive to the additional
costs of upgrading these facilities.
Asbestos Millboard (App. T). The effluent standards for the asbestos millboard
segment of the industry are identical for BPT and BAT levels of treatment. This may be
considered a disadvantage by the industry since the period over which the costs of meeting
the BAT standards may be spread is correspondingly reduced. For this segment alone,
therefore, the two plants whose added water treatment costs amount respectively to 4.9%
and 3.5% of their annual sales are considered as being relatively sensitive to the BPT
standards. EM-1 is a small facility located in the Eastern United States with annual
millboard sales of about $0.8 million. Similarly, EM-3, a slightly larger facility with annual
sales of $ 1.1 million, is located in the Eastern United States.
Asbestos Roofing (App. U). As indicated previously, asbestos roofing constitutes a
very small fraction (perhaps less than 2%) of the total roofing market. Thus, asbestos
roofing may be considered a "specialty" product. Appendix U shows that for those facilities
whose effluents do not currently meet the BPT guidelines, the annual expense of upgrading
these facilities ranges from 0.4 to 2.3% of sales. These product lines are not considered
vulnerable to shutdown or production curtailment by reason of these added costs.
Asbestos Floor Tile (App. V). It can be stated that, for this product category, the
annual water treatment costs for meeting the BPT guidelines are insignificantly small in
comparison to annual sales, ranging up to 0.24% in the worst case. Thus, no plants are
considered sensitive to these additional costs.
In summary, therefore, these analyses have identified the following plants or product
lines as being potentially vulnerable as a result of the BPT effluent guidelines:
Plant Code Product Location Annual Sales Additional Annual
of Product Water Treatment Cost
($106)
SS-3 Sheet Southern U.S.* 1.0 $40,900
EM-1 Millboard Eastern U.S.** 0.77 38,000
EM-3 Millboard Eastern U.S.** 1.1 38,000
It may be observed that these are relatively small plants or product lines. As such, all
other things being equal, the potential impact on the national markets for their specific
product lines, as a result of these plants curtailing or ceasing production, is expected to be
minimal. It may be observed parenthetically that the apparent and potential production loss
represented by the closure of these plants should not translate into increased imports of
these products. Ordinarily, other domestic producers (now operating at about 70 percent of
capacity) would be expected to take up this relatively small slack in supply. Furthermore, it
is unlikely that foreign producers, in light of the relatively high freight rates involved, would
be attracted by such low-value products.
'Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Texas, Puerto Rico
**Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania
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d. Employment Effects
According to the U.S. Bureau of the Census, the asbestos products manufacturing
industry (SIC 3292), which includes asbestos-cement products, roofing, textiles, floor tile,
and friction materials, in 1971 employed a work-force of 18,900, a decrease of 19 percent
from the 1969 total.
It is believed that the attrition in the number of employees is continuing at a reduced
rate, and therefore 1973 employment is estimated at about 17,000. The product lines under
study asbestos-cement pipe and sheet, asbestos paper, roofing, and millboard, and
asbestos floor tile - probably account for 80 percent of the total workforce, or 13,600
employees.
The three plants or product lines previously identified as potentially vulnerable employ
a total workforce estimated at about 275, equivalent to about 2 percent of the total
employment of the product categories studied. Accordingly, it may be concluded that the
impact of the BPT effluent standards, in terms of employment reduction, is minimal for the
industry as a whole.
e. Community Effects
As discussed previously, the sheet plant identified as potentially sensitive to the costs
of meeting the BPT guidelines is located in the Southern region of the United States (which
includes Puerto Rico). The Manpower Administration of the United States Department of
Labor has, as of June 1, 1973, classified the municipality in which this plant is located as an
area of "substantial unemployment."* Its unemployment rate is 20 percent, an increase
from 17 percent in March 1972. It may thus be concluded that, in this case, closing of the
sheet plant would aggravate an already serious local unemployment situation. Furthermore,
because there is only a limited number of other manufacturing activities in the immediate
vicinity of the sheet plant, we believe dislocated workers will not readily obtain other
employment here in the short-run. Admittedly, closure of this plant will result in
undesirable personal impact on the laid-off workers, but in terms of the entire community, it
is not expected that the event of closure will exert any significant impact.
The impact-sensitive millboard plant, EM-1, is located in one of the industrial Eastern
states. However, the area in which it is located has, in the last decade, witnessed a massive
erosion of its industrial base, largely the result of imports and the perfection of man-made
substitutes for the major products manufactured. The area is accordingly classified as one of
"persistent unemployment,"** its March 1973 unemployment rate being 10.4%.
Furthermore, the prospects for new industry in the area are not bright. In January 1973, the
total non-agricultural employment in the immediate area around the plant was reported as
133,000. Again, one must conclude that the possible addition of workers dislocated from
the millboard plant to the unemployment roster of about 13,000 would not generate
noticeable community impact.
*A labor area in which the current and anticipated local labor supply substantially exceeds labor
requirements. An area is placed in this category when (1) unemployment equals or exceeds 6% of its
work force and (2) it is anticipated that the rate of unemployment during the next two months will remain
at 6% or more.
"'Generally indicative of an average unemployment rate of at least 50% above the national average for at
least 1 of the preceding 2 calendar years.
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The second millboard plant liable to impact, EM-3, is also located in an Eastern U.S.
industrial state. Its labor area has a moderate unemployment rate (4.29'). Furthermore.
there is a concentration of manufacturing and service industries which could absorb
dislocated employees, and no net loss of industry is anticipated in the next five years.
Accordingly, the community impact due to the possible closure of this facility would be
considered minimal.
f. Balance of Payments Effects
Table XXIX depicts the recent trends in the values of U.S. exports and imports of
manufactured asbestos products, including the products covered by this study. Clearly, the
trend has been in favor of the United States, and we believe this favorable balance will
continue in the future. In fact, there is reason to believe that if it so desires, the U.S.
asbestos products industry may advantageously participate in the growth of consumption of
asbestos-based products forecast for the balance of this century in the developing nations of
the world. For instance, the market for sewer and water-distribution systems is considered
to be attractive in these countries, many of which have no basic sewei arid water systems
and, as their economies develop, and as they obtain financial support from international
agencies such as the United Nations and the World Bank, the demand should continue to
grow for large-diameter pipes for both sewer and water systems. Similar comments may be
made regarding the future demand in these countries for sheet, roofing, paper, and tiles.
TABLE XXIX
RECENT TRENDS IN VALUE OF U.S.
EXPORTS AND IMPORTS OF
MANUFACTURED ASBESTOS
PRODUCTS
Year Value ($106) Of
1969
1970
1971
1972
Source: U. S. Bureau of the Census
The implementation of the BPT effluent standards, by itself, should not alter the
validity of the above observations. One may therefore project a very favorable trade balance
on asbestos products, regardless of any price effects due to these standards.
Exports
28.2
25.3
31.4
32.1
Imports
8.82
10.71
10.93
11.32
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Partly moderating the optimism implied above is the recent trend in the value of
manufactured asbestos product imports as shown in Table XXIX. It has increased from $8.8
million in 1969 to $11.3 million in 1972, and it is expected that this trend will continue as
such other asbestos products sources as Europe, Japan, and Mexico seek to keep their trade
with the U.S. in balance by shipping asbestos-cement pipes, textiles and other asbestos
articles into the United States. Another inducement is the increasing popularity of low
"back-haul" rates charged by freighters returning to the U.S. after delivering more valuable
materials to European and Japanese markets.
3. Impact of the BAT Standards
a. Price Effects
A general discussion of the factors governing the price of asbestos products has been
presented in a previous chapter. It may be reiterated that any decision to raise the price of a
product must be cognizant of supply/demand factors as well as the risk of exposing the
market to penetration by substitute products and exports.
Appendices T, and W to AA show that the average annual costs incurred by various
product categories to meet the BAT standards, expressed as a percentage of estimated
annual sales of each product are as follows:
Asbestos-cement pipe -- 0.37%
Asbestos-cement sheet - 1.0%
Asbestos paper 0.6%
Asbestos millboard - 1.0%
Asbestos roofing - 1.1%
Asbestos floor tile - 0.1 %
These costs are small enough to be absorbable in the short run. As such, it is not
anticipated that implementation of the BAT standards would, of themselves, result in a
noticeable increase in the price of the above products.
b. Financial Effects
Profitability. Based on the data in Table XXVII certain companies will see sharply
higher water treatment costs under the 1983 standards.
For the BAT impact, the contractor's estimates and calculations indicate the following:
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As a Percent
of 1972 Oper-
ating Profit
Before Taxes
1.06%
0.6%
1.63%
nil
nil**
7.17%
nil
nil
As a Percent
of 1972 Sales
nil
nil
nil
nil
nil**
0.64%
nil
nil
Annualized Water Treatment Costs*
Company Code
AA
BB
CC
DD
EE
FF
GG
HH
* 1972 dollars
** Less than 0.5%
However, the magnitude of cost involved represents only 0.64% of this company's
sales-on a no-growth, constant 1972 dollar basis. Thus, other things equal, company FF's
impact would be lessened to the extent it could pass along a cost increase of this magnitude.
If these calculations are of the correct order of magnitude, it seems clear that the
variation in the profitability of asbestos manufacturing caused by water treatment costs to
meet the BAT standards will be quite small in comparison with that from the other factors
with which management must contend.
Capital Availability. Referring again to Table XXV, one may make a similar comment,
in respect to capital investment requirements to meet the BAT standards, as was made above
in respect to the impact of water treatment costs on profitability. That is, the requirement
for capital funds appears small in dollar terms. Company FF has a relatively larger
requirement, but one which we do not regard as necessarily outside of normal fluctuations
in a company's capital expenditure program over a period of years. Accordingly, the
considerations of cash flows and debt-to-equity ratios which would be important in assessing
the companies' abilities to meet large scale new capital spending plans are not called for
here. The picture is rather one in which the expenditures called for can probably be
accommodated easily within the regular corporate planning and budgeting
framework-although we do not suggest they would be viewed in the same light as
investments in new capacity. One might add that, as a result of favorable tax rulings, there
has been a sharp increase in the use of tax exempt pollution control revenue bond financing
by industry in the last 12-18 months. The evidence suggests that an even greater utilization
of this type of financing will occur in the future. This represents a new dimension in
corporate finance and additional flexibility for management in meeting pollution abatement
requirements.
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c. Production Effects
It is instructive to repeat a prior hypothesis that an asbestos product manufacturing
facility would be considered economically sensitive if its additional annual water treatment
costs required to comply with the BAT standards exceed about 4.5% of annual sales of that
product. Accordingly, the following discussion will consider each product line in accordance
with the above criterion.
Asbestos-cement pipe (App. W). Only 2 of the 14 listed plants are already in
compliance with the BAT standards. Of those requiring an upgrading of their treatment
facilities, estimates of the involved costs show that the necessary expenditures in most cases
amount to less than 1% of the annual sales. Thus, no production curtailment or cessation is
anticipated in the asbestos-cement pipe segment as a result of implementation of the BAT
effluent standards.
Asbestos-cement sheet (App. X). As with the BPT standards, only one sheet plant,
SS-3, is susceptible to adverse economic impact from the BAT standards. On the basis of
estimated 1972 statistics, the loss of this plant, if this should occur, would result in a
production loss of only 4,000 tons (about 1% of total production), an output which can
be easily generated by other plants which are currently operating at less then full capacity.
Asbestos paper (App. Y). On the basis of the criterion set forth above, only one plant,
ER-1, with annual sales of $0.3 million on an output of 750 tons, may be regarded as
potentially threatened by the BAT standards. The potential production loss would thus be
equivalent to only 0.3% of the total estimated 1972 industry output of 230,000 per year.
Obviously, this potential production deficit can be readily made up by the unimpacted
plants.
Asbestos millboard (App. T). Since the BPT and BAT standards for this product are
identical, the comments made under the BPT treatment effects are equally applicable here.
Therefore, EM-1 and EM-3 may be considered as potential candidates for shutdown as a
result of the BAT standards.
Asbestos roofing (App. Z). According to the pre-established criteria, no asbestos
roofing plant is considered susceptible to impact from the BAT standards since the
maximum annual cost incurred by an individual plant or product line is 3.2% of sales.
Asbestos floor tile (App. AA). For the tile plants surveyed, the maximum additional
annual water treatment costs to comply with the BAT standards equals only 0.3% of annual
sales. As such, all the tile facilities are regarded as relatively well insulated from any impact
due to the promulgation of these standards.
In summary, solely on the basis of high water treatment costs in relation to estimated
value of product sales, the following plants are possible candidates for shutdown as a result
of the BAT effluent standards:
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Annual Sales Additional Annual
Plant Code Product Location of Product Wateir Treatment Cost
(106)
SS-3 Sheet Southern U.S. 1.0 $70,300
ER-1 Paper Eastern U.S. 0.33 20,700
EM-1 Millboard Eastern U.S. 0.77 38,000
EM-3 Millboard Eastern U.S. 1.1 38,000
The aggregate 1972 sales of the products under study are estimated at about $550
million. Thus, the potential and apparent loss of sales due to cessation of the above product
lines amounts to only 0.6%. Note that this loss does not necessarily mean a reduction in the
absolute quantity of product generated by the industry as a whole. It is rather to be
expected that installed capacity now only partially utilized at other plants will be geared-up
to compensate for these apparent losses.
d. Employment Effects
In addition to the three plants previously identified as impact-sensitive with regard to
the BPT standards, only one other facility, ER-1, a paper plant located in an Eastern state, is
considered threatened by reason of the BAT standards. The total number of jobs threatened
by the possible closure of these plants is estimated at 325 -- equivalent to 2.4 percent of the
industry total. Thus, it is concluded that the potential employment effect due to the BAT
standards is negligible.
e. Community Effects
The comments made regarding the potential community effects arising out of the
possible closure of SS-3, EM-1 and EM-3 as a result of implementation of the BPT standards
are equally applicable here. A comment is warranted therefore only with regard to the
potential community impact resulting from shutdown of ER-1.
This plant is located in a sparsely populated state contiguous to a major metropolis.
The concentration of manufacturing industry in the immediate area has been dwindling over
the last two decades. Nevertheless unemployment is below national average (3.0 to 4.9%).
This suggests that in spite of the recent erosion of manufacturing activity, employees
dislocated because of shut-down of ER-1 may be able to obtain alternative employment in
other endeavors in the area.
f. Balance of Payment Effects
As discussed previously, the trade in asbestos products has generally been in favor of
the United States, and it is expected that this pattern will continue, unaffected by the BPT
and BAT standards. By 1983, however, one would look for the gap between the values of
exports and imports to be narrower than they are currently. As the economies of the
developing nations advance, the combination of a developed local manufacturing capability
and a reduced growth rate in the construction field should dampen their demand for
imported asbestos products.
76
-------
4. Impact of New Source Performance Standards
a. Impact on Industry Growth
The asbestos products manufacturing industry experienced an impressive growth from
its inception in the United States through the decade of the 1950's. That growth rate has
since decreased to a current annual level of near 5 percent, and there are indications it may
not exceed this level in the future. In combination with the fact that asbestos products
manufacturing is a relatively low profit endeavor, it is doubtful whether large investments in
new plants and capacities can be expected in the next decade or so, especially in light of the
fact that in-place plants are currently operating at an average of near 70 percent of capacity.
One must also take into consideration the recent rash of publicity regarding the alleged
adverse environmental and health effects of asbestos, as well as the severe competition posed
to asbestos products from man-made materials. Accordingly, it may be justified to conclude
that the future growth rate in this industry would probably not exceed that of the general
economy.
The additional costs of installing water treatment facilities required to meet the
proposed new source standards can only serve to inhibit the wide-spread installation of new
plants for the manufacture of those asbestos products which are generally regarded to be
low profit items.
While no hard and fast conclusions may be drawn without specific financial analysis of
a given proposed plant, it is instructive to consider semi-quantitatively the potential impact
of the additional water treatment capital costs on the investment required by a new
manufacturing facility. As an illustration, consider an asbestos-cement pipe facility with an
annual production capacity of 150,000 tons. The necessary capital investment (exclusive of
working capital and water treatment capital costs) is estimated at about $3 million. If the
investment in water treatment facilities required to comply with the BAT standards is
assumed to be identical to those of a typical pipe plant (Table XXI) and equivalent to
$305,000, it can be deduced that these added expenditures amount to an additional 10
percent of the original plant cost. The specific effects of these additional investments on the
corporate decision to enter into or stay out of such a new venture can only be determined
after analyzing all the financial data applicable to the contemplated installation. In the
absence of such specific data, it is only safe to observe that an additional 10 percent capital
requirement is often large enough to kill a new manufacturing venture.
Thus, the above factors tend to indicate that, whereas even without the proposed water
treatment costs no dramatic increases in installed capacity are thought to be forthcoming
for the balance of this decade, the imposition of these added costs can only produce a
reinforcing effect, thus aggravating the situation.
b. Impact on Prices
In a previous section, it was indicated that the price of asbestos products has, over the
last five to ten years, remained reasonably stable or increased at a rate lower than that of the
general manufactured product price index. This may be the result of increased
manufacturing efficiency and productivity and the threat of market penetration represented
77
-------
by competitive substitute materials. All indications are that any future price increases wil!
be moderate and at worst will aim to recoup increased manufacturing costs where these
cannot be comfortably absorbed. The incremental costs of meeting the BPT and BAT
standards are very negligible, and even if these costs were to be passed-on, would not, in
themselves, inhibit demand, result in significant substitution of alternative materials, or
accelerate the rate of import penetration of the domestic market.
c. Impact on Plant Location
In view of the very modest incremental costs incurred by the asbestos products
manufacturing industry in meeting the BPT and BAT effluent standards, it is not anticipated
that any relocation to foreign sites, of any of the currently operating plants would occur;
nor is it visualized that these water treatment costs are a sufficiently attractive incentive for
locating a new facility in a foreign country in preference to the United States. It is
increasingly apparent that many foreign countries are beginning to institute environmental
quality standards whose long-term effect would be to erase the manufacturing cost
advantage hitherto enjoyed by foreign manufacturers. Thus, the attraction of these
countries as a haven from pollution regulation is fast disappearing.
While recognizing the virtually insignificant effect of new water pollution control costs
with respect to new plant location, it must be observed that domestic asbestos products
manufacturers have had to contend with, among other non-productive costs, the expenses
due to air quality and occupational safety and health standards, which several foreign
countries do not now require. These factors, rather than incremental water pollution costs,
per se, may be among the significant inducements to prefering a foreign plant site. It is
understood that this situation already exists with respect to the asbestos textiles
manufacturing industry.
d. Balance of Payments Effects
As discussed previously, the United States has traditionally enjoyed a favorable balance
of trade relative to manufactured asbestos products. While the export-versus-import gap is
expected to narrow, it should continue in favor of the United States for the balance of this
decade. And since the costs of meeting the BPT and BAT standards do not, by themselves,
represent a significant incentive for foreign manufacturing of asbestos products (by U.S.
firms), it is reasoned that these modest additional costs, per se, will not significantly alter the
balance of payments picture.
LIMITS OF THE ANALYSIS
This assessment of the potential economic impact of the BPT and BAT effluent
guidelines on the asbestos manufacturing industry has been conducted on the assumption
that the unit operations and corresponding typical plant capital investment and annual
treatment costs suggested by the Guidelines Development Document are truly applicable to
the effluents generated by the appropriate industry categories. As such, the economic
impact conclusions rest on the accuracy of these cost data and treatment schemes.
78
-------
The evaluation of the economic impact of additional water treatment costs, and
particularly the determination of specific plant costs as a proportion of annual sales, is a
function of at least three estimated quantities, - "annualized" water treatment costs,
typical annual production rates, and representative unit sales values of products. Thus, any
gross errors in any of these quantities affects the accuracy of the impact parameter. To
minimize such errors, careful judgment has been exercised in the estimates and they are
believed to be reasonably reflective of actual data. A potentially complicating consideration
is the fact that treatment and capital costs were developed in terms of 1971 dollars, whereas
the financial impact for the major companies is experienced in terms of current dollars.
Accordingly, differing rates of inflation and cost escalation will influence the impact
parameter.
It needs to be indicated that while the present analysis has identified plants that are
potentially vulnerable as a result of the effluent guidelines, the decision to curtail or
discontinue operations at a given plant is governed by a number of interacting factors; and
while water treatment costs may appear unacceptably high at a threatened plant, the
decision to continue or terminate operations is a function of corporate goals, present and
future market conditions, etc.
Finally, the interpretation of the potential impact of the proposed effluent guidelines
has not taken into account the concurrent and reinforcing effects of other legislations and
governmental controls which, with the additional water control costs, may create a
"last-straw" effect, even though the effluent treatment costs may by themselves be
negligible. Specifically, the effects of these guidelines must, in a subsequent study, be
evaluated along with those of such other control regulations as OSHA and air quality
standards.
79
-------
APPENDICES
81
-------
APPENDIX A
WATER EFFLUENT QUALITY STANDARDS FOR THE ASBESTOS-MANUFACTURING INDUSTRY
PRODUCT CATEGORY
EFFLUENT PARAMETER
RAW-WASTE LOAD
RESULTING
EFFLUENT
LEVELS
Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
Suspended Solids
Caustic Alkalinity
pH (Numerical value)
Dissolved Solids
Suspended Solids
Caustic Alkalinity
pH (Numerical value)
Dissolved Solids
Suspended Solids
BOD (5-day)
Dissolved Solids
Suspended Solids
BOD (5-day)
Suspended Solids
BOD (5-day)
COD
Suspended Solids
BOD (5-day)
COD
kg/MT*
3.1
4.4
6.3
6.5
7.5
8,5
9.5
1.5
16.5
1.8
0.25
0.06
0.003
0.008
0.18
0.017
0.34#
ras/ 1**
300
700
12
1,000
850
1,000
11.7
1,150
700
110
1,200
35
5
150
6
20
150
15
280
Intermediate
kg/MT*
0.19
4.4
12
6.3
0.23
7.5
11.7
8.5
0.8
0.2
Level
mS/_!±^
30
700
1,000
30
1,000
1,150
15
4
BPT
kg/MT*
0.19
0
6.3-
0.23
0
8.5-
0.35
0.35
16.5
0
0
0.006
0.003
0.008
0.04
0.017-
0.09#
Standards
mg/1**
30
0
9
1,000-
30
0
9.0
1,150-
25
25
1,200
0
0
15
6
20
30
15-
75
BAT
kg/MT*
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Standards
mg/1**
0
0
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
* Per metric ton of product
** Per liter of effluent
# kg per 1000 pieces of tile
Source: Effluent Guidelines Development Document
-------
APPENDIX B
PRESENT PATTERN OF EFFLUENT TREATMENT BY ASBESTOS PRODUCTS
MANUFACTURING PLANTS
Product Category Plant Code Effluent Flow Rate Present Treatment
Asbestos-cement
pipe
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
(10-
Raw
555
1,740
485
GPD)
Treated
45
0
270
485
200
190
20
540
80
480
C
C
D
A
C
C
B
B
B
B
A
B
B
D
Asbestos-cement
sheet
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
-
-
-
-
-
240
-
170
-
-
-
-
-
150
540
-
70
-
0
160
0
45
40
70
-
-
A
B
C
A
B
D
B
D
B
B
A
A
A
Asbestos paper
ER-1
ER-2
ER-3
ER-4
ER-5
ER-6
ER-7
720
270
0
1,000
1,100
1,300
0
B
C
B
B
A
B
C
84
-------
Product Category Plant Code
Effluent Flow Rate
MR-1
MR- 2
SR-1
WR-1
Asbestos millboard EM-1
EM- 2
EM-3
EM- 4
EM-5
MM-1
MM- 2
Asbestos roofing EF-1
EF-2
EF-3
EF-4
MF-1
SF-1
SF-2
SF-3
WF-1
Asbestos floor tile ET-1
ET-2
ET-3
MT-1
MT-2
MT-3
ST-1
ST-2
ST-3
WT-1
WT-2
WT-3
WT-4
(103 GPD)
Raw Treated
450 0
-
540
- 540
_
-
-
-
-
180 0
350 0
170
- -
- -
-
370 0
43
7
- -
0 60
213
- -
430
-
-
-
68
-
4
-
- -
7
Present Treatment
C
A
B
B
A
B
A
B
B
C
C
B
A
B
A
C
B
A
A
A
A
B
A
B
A
A
A
A
A
B
A
A
A
85
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APPENDIX C
REPRESENTATIVE MANUFACTURING PLANTS USED
IN DEVELOPING COST INFORMATION
Product Category
Asbestos-cement pipe
Asbestos-cement sheet
Asbestos paper
Asbestos millboard
Asbestos roofing
Asbestos floor tile
Estimated
Daily
Production
Tons
160
120
70
15
720
700,000 pc
Wastewater Flow
Actual
MGD
0.56
0.17
0.72
0.18
0.37
0.43
Design*
MGD
0.50
0.125
0.50
0.10
0.40
0.40
Source: Effluent Guidelines Development Document
*Design flow used in developing cost estimates.
86
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APPENDIX D
ASBESTOS-CEMENT SHEET PRODUCTS: WATER TREATMENT
CAPITAL INVESTMENT AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (103 Gals/Day
75
125*
200
500
750
Capital Investment
($)
To Satisfy
Level B
(Intermediate)
41,000
56,000
74,000
129,000
164,000
Level C
(BPT Standards)
68,000
92,000
122,000
211,000
270,000
Level D
(BAT Standards)
111,000
151,000
200,000
347,000
442,000
*Typical Plant Capacity.
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
87
-------
APPENDIX E
ASBESTOS PAPER PLANTS: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (103 Gals/Day
100
250
500*
1,000
1,500
Capital Investment
($)
To Satisfy
Level B
(BPT Standards)
90,000
156,000
237,000
359,000
458,000
Level C
(BAT Standards)
112,000
194,000
294,000
446,000
568,000
*Typical Plant Capacity.
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
88
-------
APPENDIX F
ASBESTOS MILLBOARD PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment Capital Investment ($) To Satisfy
Capacity (103 Gals/Day Level B Level C
(Intermediate Standard) (BPT and BAT Standards)
50 26,000 34,000
100* 40,000 52,000
250 69,000 90,000
500 105,000 137,000
750 134,000 174,000
*Typical Plant Capacity
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
89
-------
APPENDIX G
ASBESTOS ROOFING PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (103 Gals/Day
25
100
250
400*
750
Capital Investment
($)
To Satisfy
Level B
(BPT Standards)
5,000
11,000
18,000
24,000
35,000
Level C
(BAT Standards)
9,000
21,000
36,000
48,000
70,000
*Typical Plant Capacity
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
90
-------
APPENDIX H
ASBESTOS FLOOR TILE PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (103 Gals/Day)
25
100
250
400*
750
Capital Investment
($)
To Satisfy
Level B
(BPT Standards)
10,000
23,000
39,000
52,000
76,000
Level C
(BAT Standards)
21,000
48,000
83,000
110,000
160,000
*Typical Plant Capacity.
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
91
-------
APPENDIX I
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS-CEMENT PIPE PLANTS
I: Level B Treatment
Cost Item
Capacity (103 gals/Day)
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
II: Level C Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
III: Level D Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 eallons
Annual Water Treatment Costs ($)
100
3,780
2,360
12,760
560
19,460
0.53
250 500*
6,550 9,920
4,090 6,200
31,900 63,800
1,400 2,800
43,940 82,720
0.48 0.45
1,000 1,500
15,040 19,180
9,400 11,990
127,600 191,400
5,600 8,400
157,640 230,970
0.43 0.42
(BPT Standards)
6,100
3,800
17,560
1,400
28,860
0.79
10,600 16,100
6,600 10,100
43,900 87,800
3,500 7,000
64,600 121,000
0.71 0.66
24,400 31,100
15,300 19,430
175,600 263,400
14,000 21,000
229,300 334,930
0.63 0.61
(BAT Standards)
9,300
5,800
22,830
2,400
40,330
1.11
16,100 24,400
10,100 15,300
49,200 98,300
6,000 11,900
81,400 149,900
0.89 0.82
37,000 47,200
23,100 29,500
196,600 294,900
23,800 35,700
280,500 406,900
0.77 0.74
*Typical Plant Capacity
92
-------
APPENDIX J
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS-CEMENT SHEET PLANTS
I: Level B. Treatment
Cost Item
Capacity (10 Gals/Day)
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
II: Level C Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
III: Level D Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
Annual
3,
2,
24,
1^
31,
1
(BPT
5,
3,
32,
2,
43,
1
(BAT
8,
5,
55,
4,
74,
2
75
300
100
800
700
900
.17
Water Treatment Costs
125*
4
2
41
2
51
,500
,800
,400
,800
,500
1.13
5
3
66
4
80
200
,900
,700
,200
,500
,300
1.10
10
6
165
11
193
500
,300
,500
,600
,200
,600
1.06
($)
13
8
248
16
286
750
,100
,200
,400
,800
,500
1.05
Standards)
400
400
000
500
300
.58
7
4
53
4
69
,400
,600
,300
,200
,500
1.52
9
6
85
6
107
,800
,100
,300
,700
,900
1.48
16
10
213
16
257
,900
,600
,200
,800
,500
1.41
21
13
319
25
380
,600
,500
,800
,200
,100
1.39
Standards)
900
600
400
200
100
.71
12
7
92
7
119
,100
,600
,400
,000
,100
2.61
16
10
147
11
185
,000
,000
,800
,200
,000
2.53
27
17
369
28
442
,800
,400
,600
^000
,800
2.43
35
22
554
42
653
,400
,100
,400
,000
,900
2.39
*Typical Plant Capacity
93
-------
APPENDIX K
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS PAPER PLANTS
I: Level B Treatment (BPT Standards)
Cost Item Annual Water Treatment Costs ($_)
Capacity (103 Gals/Day) 100 250 500* 1.000 1.500
Capital Cost 7,200 12,510 18,960 28,740 36,650
Depreciation 4,510 7,820 11,850 17,960 22,910
Operation & Maintenance 3,200 8,000 16,000 32,000 48,000
Energy & Power 3.200 8.000 16.000 32.000 48.000
Total Annual Cost 18,130 36,330 62,810 110,700 155,560
Cost per 1000 gallons 0.50 0.40 0.34 0.30 0.28
II: Level C Treatment (BAT Standards)
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
8
5
8
3
26
»
»
,
t
i
960
600
800
200
560
15
9
22
8
55
0.73
,520
,700
,000
,000
,220
0.61
23
14
44
16
98
,520
,700
,000
.000
,220
0.54
35
22
88
32
177
,650
,280
,000
?000
,930
0.49
45
28
132
48
253
,480
,420
,000
,000
,900
0.46
* Typical Plant Capacity
94
-------
APPENDIX L
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS MILLBOARD PLANTS
I: Level B Treatment
Cost Item Annual Water Treatment Costs ($)
Capacity (103 Gals/Day) 50 100* 250 500 750
Capital Cost 2,110 3,200 5,540 8,400 10,720
Depreciation 1,320 2,000 3,470 5,250 6,700
Operation & Maintenance 15,500 31,000 77,500 155,000 232,500
Energy & Power 2.500 5,000 12.500 25.000 37.500
Total Annual Cost 21,430 41,200 99,010 193,650 287,420
Cost per 1000 gallons 1.17 1.13 1.09 1.06 1.05
II: Level C Treatment (BPT
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
2
1
12
3
20
& BAT Standards)
,745
,720
,150
,500
,115
1.10
4
2
24
7
38
,160
,600
,300
,000
,060
1.04
7
4
60
17
89
,210
,505
,750
,500
,965
0.99
10
6
121
35
174
,930
,830
,500
,000
,260
0.96
13
8
182
52
257
,940
,710
,250
,500
,400
0.94
* Typical Plant Capacity
95
-------
APPENDIX M
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS ROOFING PLANTS
I; Level B Treatment (BPT Standards)
Cost Item
Capacity (1Q3 Gals/Day)
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
II: Level C Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
Annual Water Treatment Costs ($)
25
364
228
375
81
1,048
0.12
100
836
523
1,500
325
3,184
0.09
250
1,450
905
3,750
813
6,918
0.08
400*
1,920
1,200
6,000
1,300
10,420
0.07
750
2,800
1,750
11,250
2,440
18,240
0.07
(BAT Standards)
727
455
0
525
1,707
0.19
1,672
1,045
0
2,100
4,817
0.13
2,896
1,810
0
5,250
9,956
0.11
3,840
2,400
0
8,400
14,640
0.10
5,600
3,500
0
15,750
24,850
0.09
*Typical Plant Capacity
96
-------
APPENDIX N
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS FLOOR TILE PLANTS
I: Level B Treatment (BPT Standards)
Cost Item Annual Water Treatment Costs ($)
Capacity (103 Gals/Day)
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
II: Level C Treatment
Capital Cost
Depreciation
Operation & Maintenance
Energy & Power
Total Annual Cost
Cost per 1000 gallons
25
788
493
688
113
2,082
0.23
1
1
2
6
100
,812
,133
,750
450
,145
0.17
3
1
6
1
13
250
,138
,960
,875
,125
,098
0.14
4
2
11
1
19
400*
,160
,600
,000
,800
,560
0.13
6
3
20
3
33
750
,064
,790
,625
,375
,854
0.12
(BAT Standards)
1,668
1,043
675
188
3,574
0.39
3
2
2
9
,830
,394
,700
750
,674
0.27
5
3
6
1
17
,544
,465
,750
,875
,634
0.19
8
5
10
3
27
,405
,253
,800
,000
,458
0.18
10
6
20
5
43
,720
,700
,250
,625
,295
0.16
*Typical Plant Capacity
97
-------
APPENDIX O
THE ASBESTOS PRODUCTS INDUSTRY: WATER TREATMENT COSTS TO
MEET THE BPT STANDARDS
Product Category
Asbestos-cement Pipe
Plant Code
Estimated Costs
($)
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
Capital
Investment
0
0
0
140,000
0
0
45,000
76,000
20,000
80,000
200,000
30,000
75,000
0
Annual Cost
0
0
0
69 , 500
0
0
15,300
32,900
1,800
43,400
120,500
7,300
36,800
0
Subtotal
666.000
327.500
Asbestos-cement Sheet
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS- 2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
104,000
86,000
0
65,000
36,000
0
43,000
0
20,000
19,000
65,000
92,000
92.000
82,100
67,000
0
40,900
17,800
0
23,400
0
7,400
6,600
40,900
69,400
69.400
Subtotal
622,000
424,900
98
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Product Category
Asbestos Paper
Plant Code
Subtotal
Estimated Costs
($)
ER-1
ER-2
ER-3
ER-4
ER-5
ER-6
ER-7
MR-1
MR-2
MR-3
SR-1
WR-1
Capital
Investment
0
0
0
0
380,000
0
0
0
237,000
0
0
0
Annual Cost
0
0
0
0
118,500
0
0
0
62,100
0
0
0
617,000
180,600
Asbestos Millboard
EM-1
EM- 2
EM-3
EM-4
EM-5
MM-1
MM-2
52,000
12,000
52,000
12,000
12,000
0
0
38,000
3,300
38,000
3,300
3,300
0
0
Subtotal
140,000
85,900
Asbestos Roofing
EF-1
EF-2
EF-3
EF-4
MF-1
SF-1
SF-2
SF-3
WF-1
0
24,000
0
24,000
0
0
2,000
24,000
24,000
0
10,400
0
10,400
0
0
3,000
10,400
10,400
Subtotal
98,000
44,600
99
-------
Product Category
Asbestos Floor Tile
Plant Code
ET-1
ET-2
ET-3
MT-1
MT-2
MT-3
ST-1
ST-2
ST-3
WT-1
WT-2
WT-3
WT-4
Subtotal
Estimated Costs
Capital
Investment
16,000
0
52,000
0
52,000
52,000
52,000
18,000
52,000
0
52,000
52,000
6.000
404,000
Annual Cost
4,400
0
19,600
0
19,600
19,600
19,600
5,000
19,600
0
19,600
19,600
500
147,100
100
-------
APPENDIX P
THE ASBESTOS PRODUCTS INDUSTRY: WATER TREATMENT COSTS TO
MEET THE BAT STANDARDS
Product Category
Asbestos-cement Pipe
Asbestos-cement Sheet
Plant Code
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
Subtotal
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
Subtotal
Estimated Costs
($)
Capital
Investment
104,000
35,000
0
210,000
105,000
60,000
100,000
181,000
50,000
190,000
305,000
65,000
180,000
0
1,585,000
170,000
225,000
59,000
105,000
95,000
0
110,000
0
60,000
56,000
109,000
151,000
151,000
Annual Cost
28,900
5,300
0
86,700
28,300
16,800
32,600
67,200
3,800
71,000
149,900
16,400
66,600
0
573,500
141,300
268,100
49,600
70,300
67,600
0
84,700
0
24,600
22,200
70,300
119,100
119,100
1,291,000
1,036.900
101
-------
Product Category
Asbestos Paper
Plant Code
Estimated Costs
ER-1
ER-2
ER-3
ER-4
ER-5
ER-6
ER-7
MR-1
MR- 2
MR- 3
SR-1
WR-1
Capital
Investment
38,000
0
57,000
86,000
470,000
100,000
0
0
294,000
25,000
60,000
60,000
Annual Cost
20,700
0
35,400
67,200
194,700
85,400
0
0
98,200
87,800
39,400
39,400
Subtotal
1.190.000
582.800
Asbestos Millboard
Asbestos Roofing
EM-1
EM-2
EM-3
EM-4
EM-5
MM-1
MM-2
Subtotal
EF-1
EF-2
EF-3
EF-4
MF-1
SF-1
SF-2
SF-3
WF-1
Subtotal
52,000
12,000
52,000
12,000
12,000
0
0
140,000
14,000
48,000
24,000
48,000
0
6,000
7,000
48,000
48,000
38,000
3,300
38,000
3,300
3,300
0
0
85,900
2,200
14,600
4,200
14,600
0
900
200
14,600
14,600
243.000
65.900
102
-------
Product Category
Asbestos Floor Tile
Plant Code
ET-1
ET-2
ET-3
MT-1
MT-2
MT-3
ST-1
ST-2
ST-3
WT-1
WT-2
WT-3
WT-4
Subtotal
Estimated Costs
(11
Capital
Investment
33,000
33,000
110,000
52,000
110,000
110,000
110,000
37,000
110,000
5,000
110,000
110,000
11,000
1,051,000
Annual Cost
7,300
4,700
27,500
7,900
27,500
27,500
27,500
7,900
27,500
200
27,500
27,500
1,100
214,300
103
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APPENDIX Q
ASBESTOS-CEMENT PIPE MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE BPT STANDARDS
Plant Code
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
Total
Estimated Annual
Production (Tons)
Estimated Annual
Sales ($1Q6)
83,000
40,000
67,500
66,000
72,250
31,250
30,500*
60,000*
46,250
58,000
50,000*
37,500
87,500
50,000
16.6
8.0
13.5
13.2
14.45
6.25
6.1
12.0
9.25
11.6
10.0
7.5
17.5
10.0
Annual Water
Treatment Cost
($)
Water Treatment
Cost As Percent
of Sales
0
0
0
69,500
0
0
15,300
32,900
1,800
43,400
120,500
7,300
36,800
0
0
0
0
0.53
0
0
0.25
0.27
0.02
0.37
1.3
0.10
0.21
0
779,750
155.95
327,500
0.21
Basis: 250 days/year operation; sales price of $0.10 per pound.
*Contractor's Estimates
104
-------
APPENDIX R
ASBESTOS-CEMENT SHEET MANUFACTURING INDUSTRY - ANNUAL
WATER TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Plant Code
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
Total
Estimated Annual
Production (Tons)
25,000
31,250
30,000*
30,000
25,000*
25,000
65,000
30,000
30,000*
50,000
4,000
25,000*
30,000*
Estimated Annual
Sales ($106)
6.25
7.81
7.5
7.5
6.25
6.25
16.25
7.5
7.5
12.5
1.0
6.25
7.5
Annual Water
Treatment Cost
($)
Water Treatment
Cost As Percent
of Sales
400,250
100.06
82,100
67,000
0
40,900
17,800
0
23,400
0
7,400
6,600
40,900
69,400
69,400
1.3
0.86
0
0.55
0.28
0
0.14
0
0.10
0.05
4.09
1.1
0.93
424,900
0.43
Basis: 250 days/year operation; $0.125 per pound sales price.
Contractor's Estimates
105
-------
APPENDIX S
ASBESTOS PAPER MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Plant Code
ER-1
ER-2
ER-3
ER-4
ER-5
ER-6
ER-7
MR-1
MR-2
MR-3
SR-1
WR-1
Total
Estimated Annual
Production (Tons)
750
17,500
25,000*
12,500*
18,750*
28,600
24,000
20,000
18,750*
14,250
25,000*
25.000*
Estimated Annual
Sales ($106)
0.33
7.7
11.0
5.5
8.25
12.58
10.56
8.8
8.25
6.27
11.0
11.0
Annual Water
Treatment Cost
($)
0
0
0
0
118,500
0
0
0
62,100
0
0
0
Water Treatment
Cost As Percent
of Sales
0
0
0
0
1.44
0
0
0
0.75
0
0
0
230,100
101.24
180,600
0.18
Basis: 250 days/year operation; sales price of $0.22 per pound.
Contractor's Estimates
106
-------
APPENDIX T
ASBESTOS MILLBOARD MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT AND BAT EFFLUENT STANDARDS
Annual Water Water Treatment
Plant Code Estimated Annual Estimated Annual Treatment Cost Cost As Percent
Production (Tons) Sales ($106) ($j of Sales
EM-1 1,750* 0.77 38,000 4.9
EM-2 1,750* 0.77 3,300 0.4
EM-3 2,500* 1.1 38,000 3.5
EM-4 3,750* 1.65 3,300 0.2
EM-5 3,750* 1.65 3,300 0.2
MM-1 3,750 1.65 0 0
MM-2 2.250 0.99 0_ 0_
Total 19,500 8.58 85,900 1.0
Basis: 250 days/year operation; sales price of $0.22 per pound.
Contractor's Estimates
107
-------
APPENDIX U
ASBESTOS ROOFING MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Annual Water Water Treatment
Plant Code Estimated Annual Estimated Annual Treatment Cost Cost As Percent
Production (Tons) Sales ($10 ) ($) of Sales
EF-1 2,140 0.482 0 0
EF-2 2,000* 0.45 10,400 2.3
EF-3 2,500* 0.56 0 0
EF-4 2,000* 0.45 10,400 2.3
MF-1 3,600 0.81 0 0
SF-1 2,500 0.56 0 0
SF-2 3,600* 0.81 3,000 0.4
SF-3 3,600* 0.81 10,400 1.3
WF-1 3.600* 0.81 10.400 1.3
Total 25,540 5.742 44,600 0.8
Basis: 250 days/year operation; average sale price of $225 per ton.
Contractor's Estimates
108
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APPENDIX V
ASBESTOS FLOOR TILE MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Plant Code
ET-1
ET-2
ET-3
MT-1
MT-2
MT-3
ST-1
ST-2
ST-3
WT-1
WT-2
WT-3
WT-4
Total
Estimated Annual
Production (Tons)
Estimated Annual
Sales ($1Q6)
135.0
125.0
162.5*
175.0
73.25
125.0*
75.0*
85.0
137.5
33.75
137.5*
62.5*
78.75
17.55
16.25
21.125
22.75
9.52
16.25
9.75
11.05
17.88
4.39
17.88
8.13
10.24
1,405.75
182.765
Annual Water
Treatment Cost
($)
4,400
0
19,600
0
19,600
19,600
19,600
5,000
19,600
0
19,600
19,600
500
147,100
Water Treatment
Cost As Percent
of Sales
0.03
0
0.09
0
0.21
0.12
0.20
0.05
0.11
0
0.11
0.24
0.00
0.08
Basis: 250 days/year operation; average sales price of $0.13 per piece.
Contractor's Estimates
109
-------
APPENDIX W
ASBESTOS-CEMENT PIPE MANUFACTURING INDUSTRY ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BAT EFFLUENT STANDARDS
Plant Code
Annual Water
Basis: 250 days/year operation; sales price of $0.10 per pound.
*Contractor's Estimates
Water Treat-
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SPr3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-A
Total
Production (tons)
83,000
40,000
67,500
66,000
72,250
31,250
30,500*
60,000*
46,250
58,000
50,000*
37,500
87,500
50,000*
779,750
Sales ($106)
16.6
8.0
13.5
13.2
14.45
6.25
6.1
12.0
9.25
11.6
10.0
7.5
17.5
10.0
155.95
Treatment
Costs ($)
28,900
5 , 300
0
86,700
28,300
16,800
32 , 600
67,200
3,800
71,000
149,900
16,400
66,600
0
573,500
ment Cost A
Percent of
Sales
0.17
0.07
0
0.66
0.20
0.27
0.53
0.56
0.04
0.61
1.50
0.22
0.38
0
0.37
1 10
-------
APPENDIX X
ASBESTOS-CEMENT SHEET MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT
COSTS (BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Plant Code
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
Total
Estimated Annual
Production (tons)
25,000
31,250
30,000*
30,000
25,000*
25,000
65,000
30,000
30,000*
50,000
4,000
25,000*
30.000*
400,250
Estimated Annual
Sales ($106)
6.25
7.81
7.5
7.5
6.25
6.25
16.25
7.5
7.5
12.5
1.0
6.25
7.5
100.06
Annual Water
Treatment
Costs ($)
141,300
268,100
49,600
70,300
67,600
0
84,700
0
24,600
22,200
70,300
119,100
119,100
1,036,900
Water Treat-
ment Cost As
Percent of
Sales
2.3
3.4
0.7
0.9
1.1
0
0.5
0
0.3
0.2
7.0
1.9
1.6
1.0
Basis: 250 days/year operation; $0.125 per pound sales price.
Contractor's Estimates
11
-------
APPENDIX Y
ASBESTOS PAPER MANUFACTURING INDUSTRY WATER TREATMENT COSTS
(BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Water Treat-
Plant Code Estimated Annual Estimated Annual Annual Water ment Cost As
Production (Tons) Sales ($106) Treatment Cost Percent of
($) Sales
ER-1 750 0.33 20,700 6.3
ER-2 17,500 7.7 0 0
ER-3 25,000* 11.0 35,400 0.3
ER-4 12,500* 5.5 67.,200 1.2
ER-5 18,750* 8.25 ' 194,700 2.4
ER-6 28,600 12.58 85,400 0.7
ER-7 24,000 10.56 0 0
MR-1 20,000 8.8 0 0
MR-2 18,750* 8.25 98,200 1.2
MR-3 14,250 6.27 87,800 1.4
SR-1 25,000* 11.0 39,400 0.4
WR-1 25.000* 11.0 39,400 0-4
Total 230,100 101.24 582,800 0.6
Basis: 250 days/year operation; sales price of $0.22 per pound.
Contractor's Estimates
112
-------
APPENDIX Z
ASBESTOS ROOFING MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT COSTS
(BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Plant Code
EF-1
EF-2
EF-3
EF-4
MF-1
SF-1
SF-2
SF-3
WF-1
Total
Estimated Annual
Production(Tons)
2,140
2,000
2,500*
2,000*
3,600
2,500
3,600*
3,600*
3.600*
Estimated Annual
Sales ($106)
0.482
0.45
0.56
0.45
0.81
0.56
0.81
0.81
0.81
25,540
5.742
Annual Water
Treatment Cost
($)
2,200
14,600
4,200
14,600
0
900
200
14,600
14,600
Water Treat-
ment Cost As
Percent of
Sales
65,900
1.14
Basis: 250 days/year operation; average sales price of $225 per ton.
Contractor's Estimates
113
-------
APPENDIX AA
ASBESTOS FLOOR TILE MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT
COSTS (BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Plant Code
ET-1
ET-2
ET-3
MT-1
MT-2
MT-3
ST-1
ST-2
ST-3
WT-1
WT-2
WT-3
WT-4
Total
Estimated Annual
Production
(106 pcs.)
135.0
125.0
162.5*
125.0
73.25
125.0*
75.0
85.0
137.5*
33.75
137.5*
62.5*
78.75
Estimated Annual
Sales (106)
17.55
16.25
21.125
22.75
9.52
16.25
9.75
11.05
17.88
4.39
17.88
8.13
10.24
Annual Water
Treatment Cost
($)
Water Treat-
ment Cost As
Percent of
Sales
1,405.75
182.765
7,300
4,700
27,500
7,900
27,500
27,500
27,500
7,900
27,500
200
27,500
27,500
1,100
0.04
0.03
0.13
0.03
0.29
0.17
0.28
0.07
0.15
0.00
0.15
0.34
0.01
214,300
0.11
Basis: 250 days/year operation; average sales price of $0.13 per piece,
Contractor's Estimates
114
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