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

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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    .

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               \	•       I     .•
   •	\MISSOURI I       I     ''
   I     KANSAS     \       N
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 »---,  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

-------
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

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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

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                                 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

-------
                                            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


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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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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

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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.

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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 1971—2 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

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     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

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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     —      90—95%

         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
                                         63

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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


                                           66

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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
                                         67

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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
                                           68

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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
                                         69

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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
                                           70

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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.

                                          71

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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:
                                         73

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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.
                                         74

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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:
                                          75

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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

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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

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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

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     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

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APPENDICES
     81

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                                                     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

-------
                           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

-------
                             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

-------
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

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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

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                               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

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                               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

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                               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

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                              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

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                          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

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                                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

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                             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

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                                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

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                              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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