EPA 23(yi-73-007
SEPTEMBER, 1973
         ECONOMIC ANALYSIS
                  OF
  PROPOSED EFFLUENT GUIDELINES
                                    i
THE ELECTROPLATING INDUSTRY
      (COPPER, NICKEL, CHROMIUM, and ZINC)
                 QUANTITY
     U.S. ENVIRONMENTAL PROTECTION AGENCY
         Office of Planning and Evaluation
            Washington, D.C. 20460

-------
     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 avail-
able through the National Technical Information
Service, Springfield, Virginia 22151.

-------
EPA - 230/1-73-007
                       ECONOMIC  ANALYSIS


                              OF

               THE PROPOSED EFFLUENT GUIDELINES
               FOR THE ELECTROPIATING INDUSTRY


               (Copper, Nickel,  Chromium and Zinc)
                        SEPTEMBER,  1973
              OFFICE OF PLANNING AND EVALUATION
               ENVIRONMENTAL PROTECTION AGENCY
                    WASHINGTON, D.C.   20460
                   CONTRACT NO. 68-01-1545
              U.S. Environmental Protection Agency
              Region 5, Library (PL-12J)
              ?7 West Jackson Boulevard, 12th Fta*
              CMcago, IL 60604-3590

-------
                      EPA REVIEW NOTICE





     This report has been reviewed by the Office of Planning



and Evaluation of 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.

-------
                           PREFACE


     The attached document is a contractors' study prepared for
 the Office  of Planning and Evaluation of the Environmental Pro-
 tection 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 per-
 formance 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 exist-
 ing and potential waste treatment control methods and technology
 within particular industrial source categories and supports pro-
 mulgation 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 product  price increases, effects upon employment and the con-
 tinued 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. 68-01-1545 by A. T.
 Kearney, Inc.  Work was completed as of September, 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 proceed-
 ings 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 repre-
sented in any respect in any such proceeding as a statement of
EPA's views regarding the subject industry.

-------
           ENVIRONMENTAL PROTECTION AGENCY

          ECONOMIC ANALYSIS OF THE PROPOSED
   EFFLUENT GUIDELINES FOR THE ELECTROPLATING INDUSTRY
                   TABLE OF CONTENTS
Section                    Title                       Page

             EPA Review Notice
             Preface
             Executive Summary
             INTRODUCTION

                Statement of the Problem               I  -  1
                Scope of Work                          1-2
                Method of Approach                     1-3
   II        GENERAL INDUSTRY DESCRIPTION

                Demand  Characteristics  for
                  Electroplating                       II  -  1
                Description of the  Plating  Process     II  -  3
                Sources of  Water  Pollution             II  -  5
  III         PHYSICAL CHARACTERISTICS  OF  THE
             INDUSTRY
                Primary  Industry  Segments             III  -  1
                Types  of Firms                        III  -  2
                Size of  the  Industry                  III  -  4
                Industry Survey                       III  -  7
                Expected Impact by  Industry  Segments  III  -  9
                Location of  Impacted  Shops            III  -  10
                Industry Segment  Not  Considered       III  -  11
                Scope  of Impact Analysis              III  -  11
   IV        FINANCIAL PROFILE
               General  Industry  Financial
                  Statistics                           IV  -  1
               Operating Revenues                     IV  -  2

-------
                                                      -ii-
Section                Title

   IV           Profitability                          IV  -  3
                Profit Margin  Constraints              IV  -  6
                Value  of  Assets                        IV  -  7
                Cost Structure                        IV  -  8
                Financing Additional  Capital
                  Requirement                          IV  -  8
                Alternative  Method  of 'Financing        IV  -  9
    V        POLLUTION CONTROL REQUIREMENTS

                Proposed  Effluent  Limitations           V -"1
                Effluent  Limitations  Used  for
                  this Study                           V -  3
                Industry  Segmentations  and
                  Effluent Limitations                  V -  5
                Water  Pollution Abatement  Costs         V -  6
   VI        PRICE EFFECTS

                Background                            VI  -  1
                Pricing in Job Shops                   VI  -  1
                Costing in Captive Shops               VI  -  4
                Other Factors  of Consideration        VI  -  5
                Model Plant Parameters                 VI  -  7
                Profit Commitment for Pollution
                  Control                             VI  -  7
  VII        IMPACT ANALYSIS

                Estimated  Plant Closings               VII -  3
                Employment Effects                    .VII -11
                Community  Effects                      VII -15
                Production Effects                     VII -16
 VIII        LIMITS OF THE ANALYSIS

                Accuracy                            VIII - 1
                Critical Assumptions in Analysis    VIII - 4

-------
                                                          -111-
                      LIST OF EXHIBITS


Exhibit
Number                   Title

  1-1         List of Reference Sources

 II-l         End Uses of Electroplating by Industry Segments

 II-2         Electroplating Operations by Industry Segments

III-l         Industry Survey Summary

III-2         Employment in Independent Shop Segment

III-3         Employment in Captive Shop Segment

III-4         Electroplating Operations in Metalworking Industry

III-5         Employment in large Captive Shops

III-6         Location at Independent Electroplaters

 IV-1         General Industry Financial Statistics

 IV-2         Industry Sales

 IV-3         Financial Statements and Operating Rates

 IV-4         Summary of Profitability of Independent
                Electroplating Shops

 IV-5         Bank Interview Summary

  V-l         Number of Plants by Employment and Rectifier
                Capacity

  V-2         Alternate A  -  Investment  Costs  for Level  I
              Pollution Abatement  Equipment

  V-3         Alternate B  -  Investment  Costs  for Level  I
              Pollution Abatement  Equipment

  V-4         Alternate A  - Annual Amortization Costs of
              Investments  for  Level  I

  V-5         Alternate B  - Annual Amortization Costs of
              Investments  for  Level  I

-------
                                                        -tv-
                      LIST OF EXHIBITS
Exhibit
Number                   Title

  V-6        Alternate A - Level I Investment Costs  as
             a Percent of Annual Sales  for  Rural and
             Urban Plants

  V-7        Alternate B - Level I Investment Costs  as
             a Percent of Annual Sales  for  Rural and
             Urban Plants

  V-8        Investment Costs  for Level II  Pollution
             Abatement Equipment

  V-9        Annual Amortization Cost of Investments for
             Level II Pollution Abatement Equipment

 VI-1        Income Statement  Profile

 VI-2        Estimated Capitalization of Metal
             Finishing Firms

 VI-3        Estimated Return  on Investment of Metal
             Finishing Firms

 VI-4        Description of Model Plants

 VI-5        Average Pre-Tax Profit  of  Model Plants

 VI-6        Years of Profit Commitment with no
             Price Increase

 VI-7        Alternate A - Estimated Price  Increases for
             Treatment Levels

 VI-8        Alternate B - Estimated Price  Increases for
             Treatment Levels

 VI-9        Alternate A -Potential  Cost Increase for Urban
             Plants for Level  I Pollution Abatement

 VI-10       Alternate B - Potential Cost Increase for  Urban
             Plants for Level  I Pollution Abatement

 VI-11       Alternate A and B - Potential  Cost Increase  for
             Rural Plants for  Level  I Pollution Abatement

-------
                                                        -v-
                      LIST OF EXHIBITS
Exhibit
Number                    Title


 VI-12       Alternate A and B - Potential Cost Increase for
             Rural Plants for Level II Pollution Abatement

 VI-13       Alternate A and B - Annual Operating Costs for
             Level I Pollution Abatement Equipment

 VI-14       Alternate A and B - Annual Operating Costs for
             Level II Pollution Abatement Equipment

VII-1        Alternate A - Potential Closures of Number of
             Urban Plants for Level I Pollution Abatement

VII-2        Alternate B - Potential Closures of Number of
             Urban Plants for Level I Pollution Abatement

VII-3        Alternate A and B - Potential Closures of
             Number of Rural Plants for Level I Pollution
             Abatement

VII-4        Alternate A - Potential Closures of Number of
             Urban and Rural Plants for Level I Pollution
             Abatement

VII-5        Alternate B - Potential Closures of Number of
             Urban and Rural Plants for Level I Pollution
             Abatement

VII-6        Alternate A and B - Potential Closures of Number
             of Rural Plants for Level II Pollution Abatement

VII-7        Alternate A - Potential Closures of Number of
             Total Plants for Level I and Level II Pollution
             Abatement

VII-8        Alternate B - Potential Closures of Number of
             Total Plants for Level I and Level II Pollution
             Abatement

VII-9        Alternate A - Estimated Number of Employees Affected
             by Potential Closures  of Urban Plants for Level I
             Pollution Abatement

-------
                                                           -VL-
                      LIST OF EXHIBITS


Exhibit
Number                          Title

VII-10       Alternate A and B - Estimated  Number  of Employees
             Affected by Potential Closures of Urban Plants
             for Level I Pollution Abatement

VII-11       Alternate A and B - Estimated  Number  of Employees
             Affected by Potential Closures of Rural Plants
             for Level I Pollution Abatement

VII-12       Alternate A - Estimated Number of Employees
             Affected by Potential Closures of Plants (Rural
             and Urban) for Level I Pollution Abatement

VII-13       Alternate B - Estimated Number of Employees Affected by
             Potential Closures  of Plants  (Rural and Urban) for
             Level I Pollution Abatement

VII-14       Alternate A and B - Estimated  Number  of Employees
             Affected by Potential Closures of Rural Plants for
             Level II Pollution  Abatement

VII-15       Alternate A - Estimated Number of Employees Affected
             by Potential Closures of  Plants for Level I and
             Level II Pollution  Abatement

VII-16       Alternate B - Estimated Number of Employees Affected
             by Potential Closures of  Plants for Level I and
             Level II Pollution  Abatement

VII-17       Alternate A - Estimated Dollar Sales  Affected by
             Potential Closures  of Urban Plants for  Level  I
             Pollution Abatement

VII-18       Alternate B - Estimated Dollar Sales  Affected by
             Potential Closures  of Urban Plants for  Level  I
             Pollution Abatement

VII-19       Alternate A and B - Estimated  Dollar  Sales Affected
             by Potential Closures of  Rural Plants for Level I
             Pollution Abatement

VII-20       Alternate A - Estimated Dollar Sales  Affected by
             Potential Closures  (Urban and  Rural)  for Level I
             Pollution Abatement

-------
                                                         -vii-
                      LIST OF EXHIBITS
Exhibit
Number                       Title

VII-21       Alternate B - Estimated Dollar Sales Affected
             by Potential Closures (Urban and Rural)  for
             Level I Pollution Abatement

VII-22       Alternate A and B - Estimated Dollar Sales  Affected
             by Potential Closures or Rural Plants for Level  II
             Pollution Abatement

VII-23       Alternate A - Estimated Dollar Sales Affected by
             Potential Closures of Plants for Level I and
             Level II Pollution Abatement

VII-24       Alternate B - Estimated Dollar Sales Affected
             by Potential Closures of Plants for  Level I and
             Level II Pollution Abatement

-------
             ENVIRONMENTAL PROTECTION AGENCY
        ECONOMIC ANALYSIS OF THE PROPOSED EFFLUENT
       GUIDELINES FOR THE ELECTROPLATING INDUSTRY
                    EXECUTIVE SUMMARY

INTRODUCTION
     It was the objective of this study to determine the impact
of the costs of water pollution abatement on the Electroplating
Industry.  The study was restricted in scope to an analysis of
four metals:  Copper, Nickel, Chromium and Zinc, used in
electroplating and the effluents resulting from the use of these
metals.  This study covered those plants included in the four
digit SIC Code 3471.

     We would like to acknowledge the participation of Fred
Gurnham Associates amd Mr. Scott Modjeska in the technical
aspects of this study, as well as the cooperation of the National
Association of Metal Finishers in the supply of data and
information relevant to the study.

THE INDUSTRY
     (a)  Number of Industry
     	Establishments
     Due to the nature of the Electroplating Industry and the
relative ease of entry into, or withdrawal from, the market
place, it is difficult to determine the actual number of electro-
plating shops operating within the United States.

-------
                                                           - 2 -
     Based on the best available information from the Bureau
of Census, the number of electroplating establishments is as
shown in the following table:
                         TABLE 1
          Number of Electroplating Establishments

     Industry Segment                   Establishments
     Captive Installations                2,389
     Independent Shops                    3.241
                         Total            5.630
      (b)  Employment
          Size
     Similar to data on establishment size, data on employment
 size is also difficult to determine.  The following table shows
 reported employment by type of electroplating installation:
                         TABLE 2
                    Industry Employment
     Industry  Segment                   Employment
     Captive Installations              23,000
     Independent  Shops                  55.000
                          Total         78.000

     Source:   Bureau of Census

-------
                                                       - 3 -
     (c)  Types of
     	Firms

     It was determined that segmenetaion of the industry based

upon level of integration, number of plants, number of products
                                            *
and level of diversification, is not valid or necessary at this point


     (d)  Expected Impact
     	by Industry Segments

     It is expected that the impact on the industry will be

more significant in the independent shop segment rather than the

captive shop segment because of the following:

          1.  Greater number of small independent shops exist.

          2.  Employment in the independent segment is

greater in small shops than in small captive shops.

          3.  Captive shops generally have a larger organization

capable of supporting additional operating costs of pollution

control.

          4.  Ability to raise necessary capital requirements

for equipment is greater in the broader based captive shop

environment.


     It is expected that within the independent segment, large

shops will be impacted but not as severly as the small shops,

particularly at the lower employment levels.  Information

collected during the study indicated the following:

-------
                                                        - 4 -
          1.  Low sales volumes for small shops,  thus
indicating insufficient cash flow for purchasing  expensive
control equipment.
          2.  Constraint on physical plant space  thus adding
to the capital requirements, particularly if additional land
is required to maintain the same volume.
          3.  Diversification is high in the small shops in
order to hold customers.  For reasons mentioned,  several
treatment systems will probably be required as degree of
diversification increases.
     (c)  Scope of the
     	Study	
     As a result of the expected impact, the scope of the study
was limited to the independent (job) shop segment.  Although
some small captive shops (1-5 employees) are expected to close,
the work performed in these shops will probably be transferred
to larger independent shops and the employees relocated into
other captor industry operations.

     The scope was further limited to independent shops of
less than 100 employeess.  This segment contains the majority
of the industry work force.  Larger shops in this segment are
also expected to be impacted, but few, if any, closures should
result from pollution abatement requirements.

-------
                                                        - 5 -
METHODOLOGY OF
  IMPACT ASSESSMENT

     The following methodology was used in assessing the

economic impact of the cost of water pollution control on the

Electroplating Industry:

          1.  The independent shops were segmented basedon

numbers of employees, dollars of sales and location of

plants, rural or urban.

          2.  The financial impact on the industry as a whole

was measured in terms of the effect on the industry's average

profit before taxes as a percent of sales.


          3.  The impact on prices of electroplating was

determined based on the projected maintenance of the industry's

average level of profitability before taxes.

          4.  The impact of ability to raise the necessary

capital for pollution abatement equipment was analysed for

each segment.

          5.  The impact on production curtailment, plant

closing, etc., was based on:

              (a)  Judgemental assessment of
                   the expected financial impact.

              (b)  Interviews with industry sources.

              (c)  Interviews with technical
                   consultants.

-------
                                                          - 6 -
 SEGMENTATION
      Segments of the industry were analyzed in considerable
 detail in Section III and IV of the report.  In the independent
 shop segment, model plant size groups were established.   The
 basic parameters of these groups are shown in the table  below:

                          TABLE 3
 Model
 Plant
 Code
  A
  B
  C
  D
  E
Model Plant Parameters
Number
Urban*
952
439
446
477
132
2,446
of Plants
Rural**
285
131
133
143
39
731

Total
1,237
570
579
620
171
3^.177
Average No.
of Employees
Per Plant
2
7
14
30
67

Average Dollar
Sales Per Plant
  ($.000 )
  $   40.3
     135.0
     262.9
     594.3
   1,345.5
 * Plants discharging effluents to municipal sewer systems
** Plants discharging effluents to navigable waters.
      The impact due to water pollution abatement costs on
 the above plants are discussed in the paragraph, Impact Analysis.

-------
                                                        - 7 -
EFFLUENT LIMITATIONS
  USED FOR THIS STUDY

     In order to evaluate the economic impact of pollution

abatement requirements on the Electroplating Industry, it was

necessary to establish effluent limitations on the model plant

groups.  In conjunction with the Environmental Protection

Agency, two alternates were established for levels of treatment

for rural and urban plants.  The alternates are shown in the

following table:

                         TABLE 4

               Alternate Effluent Limitations


Alternate

  A           Level I (1)    Pretreatment (2)    Level II (3)

  B           Level I        Level I            Level II


     (1)  Best Practicable Technology

     (2)  Pretreatment standards are based on local regulations
          and are not a requirement of the federal guidelines.

     (3)  Best Available Technology


COST OF WATER
  POLLUTION CONTROL

Rural
1977
Urban
1983
Rural
     The cost data were supplied by Battelle Memorial Institute

Costs regarding investment requirements were developed based on

the number of square feet per hour plated per employee and the

number of gallons of water used per hour.  Operating costs

were based upon the square feet plated per hour per employee

and man-hours worked per employee per year.

-------
                                                         - 8 -
     The investment and operating cost data for 1977 and 1983
for Alternates A and B are summarized in Tables 5 and 6 on
the following pages.
FINANCIAL PROFILE
     (a)  Sales and
          Profits
     A limited amount of information is available within the
Electroplating Industry relative to the financial condition of
individual firms.  However, the limited published data, industry
studies and direct contact with individual firms, were used to
develop a financial profile of the industry segments.

     Five model plant sizes were established with the following
financial data:
                         TABLE 7
                      Financial Data
Model
Plant
Code
A
B
C
D
E
Employee
Range
1
5
10
20
50
- 4
- 9
- 19
- 49
- 99
Average
Average Pre-tax Profit
Sales Dollars ($000) on Sales (%)
$ 40
135
262
594
1,345
.3
.0
.9
.3
.5
9
6
4
7
4
.0 %>
.5
.9
.2
.2
     For the entire group of plants a pre-tax profit of
5.970 was calculated.

-------
                                     TABLE 5



ALTERNATE A



COST OF POLLUTION ABATEMENT
EQUIPMENT FOR ELECTROPIATING INDUSTRY
1977 Standards ^
Model
Plant
Code
A
B
C
D
E
Urban
Investment
(.000)
25.0
29.4
58.8
126.0
281.0
Area (3)
Annual
Operating
Costs
$ 795
2,785
5,565
11,925
26,630
Rural
Investment
(.000)
50.0
58.8
117.6
252.0
562.0
1983 Standards (2^
Area (4)
Annual
Operating
Costs
$ 1,590
5,565
11,130
23,850
53,265
Rural Area
Investment
(.000)
20.0
20.0
73.0
133.5
288.8
(4)
Annual
Operating
Costs
$ 825
2,895
5,790
12,405
27,705
(1)  Best practicable technology
(2)  Best available technology
(3)  Plants discharging to municipal sewer systems
(4)  Plants discharging to streams
Source;  Battelle Memorial Institute

         Environmental Protection Agency

-------
                                     TABLE 6


COST
EQUIPMENT
ALTERNATE B



OF POLLUTION ABATEMENT
FOR ELECTROPLATING INDUSTRY
1977 Standards ^
Model
Plant
Code
A
B
C
D
E
Urban
Investment
(.000)
50.0
58.8
117.6
252.0
562.0
Area (3)
Annual
Operating
Costs
$ 1,590
5,565
11,130
23,850
53,265
Rural
Investment
(.000)
50.0
58.8
117.6
252.0
562.0
1983 Standards (2)
Area (4)
Annual
Operating
Costs
$ 1,590
5,565
11,130
23,850
53,265
Rural Area
Investment
(.000)
20.0
20.0
73.0
133.5
288.8
(3)
Annual
Operating
Costs
$ 825
2,895
5,790
12,405
27,705
(1)  Best practicable technology
(2)  Best available technology
(3)  Plants discharging to municipal sewer systems
(4)  Plants discharging to streams
Source:  Battelle Memorial Institute
         Environmental Protection Agency
                                                                                            o
                                                                                            i

-------
                                                         - 11 -
     (b)  Value of Assets
     The Electroplating Industry is characterized by relatively
low capital investment in equipment, land and buildings.   Once
purchased and installed, the market value of electroplating
equipment decreases rapidly.  It is estimated that the market
value of used equipment is worth about 1570 to 20% of the  purchase
price after two years of operation.

     (c)  Financing Capital
     	Requirements	
     The following are the methods employed by the electro-
plating firms to obtain financing for initial or additional
capital requirements.
          1.  Commercial Banks, in general, are the primary
source of financing for firms in the Electroplating Industry.
However, companies experience some difficulty in obtaining
financing for both productive and nonproductive assets.
Companies often have to pledge assets of value equal to or
greater than the amount of the loan.  Since most companies
are small with low capital investment, the asset security is
a problem.

     The Bank's important consideration is the ability to service
the debt and the personal reputation of the business owners.
          2.  SEA Loans are typically available and used by
some of the small platers.  Although a viable source for small

-------
                                                          -  12  .-










business, these loans require a considerable amount of detailed



information for qualification.



          3.  Public Financing - Most of the companies in the



industry are either closely held corporations or partnerships.



There are few public corporations.  For this reason, the normal



method of outside financing is by bank loan.  Very little



financing is done by issuance of stock.



          4.  Private Sources - Since many of the companies



are owned and operated as a family business, another source of



financing is the family itself.  The private resources of



the family are drawn upon when necessary.



          5.  Government Assistance - A source of financing



which is available, but is not often used, is government



assisted financing.  Several people interviewed in the A. T.



Kearney industry survey expressed a desire for some form of



government assisted financing of pollution control equipment.



          6.  Industrial Revenue Bonds have been used to



finance pollution abatement equipment.  The value of bonds



issued has  increased from $85 million in 1971 to $1 billion



in 1973.  These bonds generally carry a rate of 670.  Due to



the high cost of issuing these bonds, the value issued is



generally in excess of one-half million dollars.  Presently,



only the very largest of the electroplating shops would be



able to avail themselves of this type of financing.  This



type of financing presently will not assist the small independent



shops to finance pollution abatement equipment.

-------
                                                      -  13  -
IMPACT ANALYSIS



     The impact analysis was based on previously described



model plant parameters, costs of pollution abatement equipment,



average profits for each segment, availability of capital



to finance abatement equipment, interviews with consultants



and industry sources, and Kearney's assessment of all



mentioned factors.





     (a)  1977 Standards



     The total investment costs required for the Electroplating



Industry to meet the 1977 standards are approximately $255 million



for Alternate A and approximately $415 million for Alternate B.



The annual operating cost increase is expected to amount to



$22 million for Alternate A and $36 million for Alternate B.



The following are the projected price increases for each of



the model plant groups:



                         TABLE 8



                Projected Price Increases
Plant
Code
A
B .
C
D
E
Weighted
Average
Alternate
A
Percent Increase
Urban
18.4%
7.8
8.0
7.6
7.5
8.3%
Rural
36 . 7%
15.5
16.0
15.2
15.0
16 . 5%
Alternate B
Percent Increase
Urban and Rural
36.7%
15.5
16.0
15.2
15.0
16 . 5%

-------
                                                            -  14 -
      (b)  1983 Standards



     The industry is projected to require an additional



investment of $43 million in order to meet proposed 1983



standards.  The additional annual operating costs of operation



are estimated to be $4 million.





     It is believed that these costs will, in the majority



of cases, be passed on in the form of price increases.  If



this happens, an average price increase of 8.470 will be incurred



for those plants in the rural segment.





      (c)  Plant Closings



     Based on the data analyzed and interviews with the



Electroplating Industry and bank representatives, it is



believed that the proposed water pollution control standards



will have the effect on potential plant closures for Alternates



A and B as shown in the following tables.



                         TABLE 9
Area



Urban



Rural



Total
Potential

1977
Plant
Number

Number Percent
324
193
517
13.2 70
26.4
16.3 70
Closures -
of Plants

Alternate A

1983
Number Percent
25
25
- 70
4.6
4.6%

Total
Number Percent
324
218
542
13.2 %
29.8
17.1 7o

-------
                                                        -  15  -
                         TABLE 10
          Potential Plant Closures - Alternate B
           	Number of Plants	
               1977                1983               Total
Area
Urban
Rural
Total
Number
649
193
842
Percent
26 . 5%
26.4
26 . 5%
Number
-
25.
25
Percent
-
4.6%
4.6%
Number
649
218
867
Percent
26 . 570
29.8
27.3%
     It should be noted that of the 542 total potential plant
closures for Alternate A, or 867 total potential plant closures
for Alterante B, 324 in both alternates are estimated to be the
resultant of pretreatment standards which are considered to be
the responsibility of the local municipal systems handling
plant effluents and not the Environmental Protection Agency
Guidelines.  It is understood that not all municipalities will
have the same regulations.  However, for purposes of this
analysis, effluent standards were assumed to be equal for all
areas and municipalities.

     (d)  Employment Effects
     Based on the estimated potential plant closings and the
average number of employees per model plant size, the employment
effects for Alternates A and B are shown in the following
tables.

-------
                                                       - 16 -
Area
Urban
Rural
Total
                         TABLE 11
                       Alternate A
                    Employment Effects
               1977               1983
                                          Total
Area
Urban
Rural
Total
Number
1,513
844
2,397
Percent
4.7%
8.6
5.4%
Number
-
248
248
Percent
-
2.6%
2.6%
                                                Number
                                               Percent
                                                1,513     4.7%
                                                1,132    11.0
                                                2,645     5.9%
                         TABLE 12
                       Alternate B
                    Employment Effects
              1977                  1983
                                             Total
Number
3,040
  884
3,924
Percent
 8.8%
 8.6
 8.8%
NumberPercent
           Number
         Percent
248
248
2.6%
2.6%
3,040    8.8%
1,132   11.0
4,172    9.3%
     Of the approximately 2,650 or 4,200 employees estimated to
be affected by the potential plant closures, it is estimated that
about 50 percent will be re-employed in the remaining firms in
the Electroplating Industry.  The net effect is, therefore, a
displacement of 1,325 or 2,100 employees.

     (e)  Community Effects
     It is believed that little or no impact on local
communities will result from plant closings due to pollution
abatement requirements.

-------
                                                        -  17  -
     (f)  Production Effects
     Based on the estimated potential plant closings  and  the
average dollar sales per model plant size,  the production
for Alternates A and B effects are shown in the following tables.

                         TABLE 13
              Production Effects - Alternate A
                1977
                            1983
                                                Total
Area
Urban
Rural
Total
SMillion
$29.7
17.3
$47.0
Percent
4.4%
8.6
5.4%
$Million
-
$4.9,
$4.9
Percent
-
2.6%
2.6%
$Million
$29.7
22.2
$51.9
Percent
4.4%
11.1
5 . 9%
Area
Urban
Rural
Total
                         TABLE 14
              Production Effects - Alternate B
                1977
                             1983
$76.9
           Percent
gMlTIion   	
$59.6      8.8%
 17.3      8.6
Percent
           8.8%
?Million   	
$ -
$4.9       2.6%
$4.9       2.6%
                                               Total
?Million
$59.6
 22.2
Percent
                      8.8%
                     11.0
          $81.8       9.3%
      It  is  believed  that the majority of this potential lost
 sales volume will be  shifted to the remaining plants.

-------
                                                        - 18 -
LIMITS OF
  THE ANALYSIS
     (a)  The accuracy of this study depends upon the
accuracy of:
          1.  Published industry data.
          2.  Unpublished information supplied by knowledgeable
industry personnel.
          3.  Cost data developed separately from this analysis
by Battelle Memorial Institute for the Environmental
Protection Agency.
          4.  Estimates by A.  T. Kearney consultants.

     The published data consisted of industry sales,  number of
companies and employees and limited financial data.   While
conflicts were present in the various data sources,   these data
were judged to be reasonably accurate for a study of this nature

     The information supplied  by members of the Electroplating
Industry was assumed to be accurate, and the cost data provided
by Battelle were used as supplied.

     (b)  Critical Assumptions
     The assumptions which directly affect the findings and
conclusions of this study are :

-------
                                                           - 19 -
          1.  The industry has been assumed to be similar in
each segment according to size.  Sales,  employment and
production are assumed to be relevant units of measurement for
the plants in the industry.
          2.  The majority of the small  shops were assumed
to handle similar waste streams and operate in approximately
the same manner according to size, as stated in the above
paragraph.
          3.  In the absence of more accurate data the water
discharged into streams versus that discharged into municipal
sewers, was assumed to represent the distribution of the plants
by geographical location, i.e., rural versus urban areas.
          4.  The plants in the industry affected by pollution
abatement have either zero current investment in water
treatment equipment or the estimated costs to meet guidelines
are additive for those plants already using some type
of treatment.
          5.  Profitability and costs for the plants located
within urban and rural areas was assumed to be similar.
          6.  It was assumed that all shop owners will attempt
to maximize profits.  It was also assumed that five years
profits would be the maximum amount of investment a shop
owner would be willing to forego before  going out of business.

-------
                       I - INTRODUCTION


 STATEMENT OF
   THE PROBLEM

      The 1972 Amendments to  the  Federal Water  Pollution Control

 Act have required  the Environmental  Protection Agency  to estab-

 lish effluent limitations for  most major  industries which are

 sources  of water pollution.  Studies are  now under way to es-

 tablish  these limitations in some 28 industries.  These efflu-

 ent limitations will  apply to  existing and new plants, and at

 legislated dates progressively more  restrictive limitations

 will be  imposed.   Specifically by July, 1977,  effluent require-

 ments will be in effect  that require application of the best

 practical  control  technology currently available.  By July,

 1983,  a  more  restrictive  set of  limitations will be enacted that

 require  the application  of the best  available  technology econom-

 ically achievable; and by  1985,  if possible, techniques and

 systems  that  enable the  industries to effect zero level of dis-

 charge will come into effect.


     The tremendous effort which has been expended by the EPA

 and  its predecessor agencies in the  technical development of the

 nature of  the pollution problem,  and its solutions,  has resulted

 in a multiplicity of programs which have begun to bring the

pollution problem under control.   The establishment  of timetables

has put time parameters on these  control efforts,  requiring the

expenditure of vast sums of money by all types and levels of in-

dustry to meet these deadlines  by installation of pollution con-

 trols.

-------
                                                         1-2
     In recent years, a recognition of the potential economic

problems facing industry in meeting the control requirements has

resulted in study programs in which the economic impact of the

costs of pollution control on American industry and on the econ-

omy in general have been analyzed.   These culminated in the

Economic Impact Studies sponsored by the Council for Environ-

mental Quality and the EPA in 1971 and 1972, in which 11 indus-

tries were studied.


     The EPA has now increased the number of industries which

are being studied, and expanded the scope of previous studies,

by authorizing a series of Economic Impact Studies which are

specifically aimed at analyzing the economic impact of the costs

of water pollution abatement requirements under the Federal

Water Pollution Control Amendments of 1972.


SCOPE
  OF WORK

     The Electroplating Industry included in SIC code 3471 is

covered by this study.  SIC Code 3471 includes many processes

generally found in plating shops including electroplating,

other types of plating, polishing, anodizing, and coloring of

metallic manufactured end products.  Although a wide variety

of platings and coatings are in use in shops listed under SIC

Code 3471 which include non-metallic coatings, precious metals,

and non-precious metals, the study scope has been limited by

EPA to copper, nickel, chromium and zinc electroplating.

-------
                                                         1-3
METHOD OF APPROACH



    This study was  conducted in three phases.  Phase I developed



a physical and financial profile of the Electroplating Industry.



Phase II analyzed the economic impact of water pollution control



costs on the  industry, and Phase III was the preparation of



the final report.





    The method used in conducting this study is discussed in



the following paragraphs.





    (a)  Phase I



         1.  Collected and reviewed all published data and



information which could be found in trade journals, government



sources and A. T. Kearney files.



         2.  Met with representatives of the following agencies



and organizations to gather additional information:



                (a)  Environmental Protection Agency



                (b)  National Association of Metal Finishers



                (c)  Chicago Electroplaters Institute



                (d)  Battelle Memorial Institute



                (e)  U.  S.  Department of Commerce



         3.   Conducted approximately 30 telephone interviews of



both job shop and captive electroplaters,  located in areas of



the United  States to gather financial and  operating data.

-------
                                                         1-4
         4.  Analyzed all of the data collected.  A list of

reference sources used in this study is given in Exhibit 1-1.*

         5.  Prepared a draft report covering the findings

of Phase I.

         6.  Reviewed Phase I findings and conclusions with

the EPA.  The results reported in Phase I indicated that the

economic impact of water pollution control costs would be greatest

on the independent electroplaters employing less than 100 personnel,

It was therefore decided by A. T. Kearney and the Environmental

Protection Agency that the scope of the analysis of the

Electroplating Industry would be narrowed and the assessment of

the impact of water pollution control on the Electroplating

Industry for independent shops employing less than 100 personnel

would be provided.


    (b)  Phase II

         1.  Analyzed the data developed by Battelle Memorial

Institute with respect to the projected costs of water pollution

control.

         2.  Visited approximately 25  Chicago area electroplaters

and re-interviewed by telephone previously contacted electroplaters

located in other areas of the United States, based upon segmented

groups, to gather additional information.
*A11 exhibits are located at the end of the section in
 which they are discussed.

-------
                                                           1-5
         3.  Interviewed five Chicago area banks to assess the



ability of electroplating shops to obtain financing for



pollution abatement equipment.



         4.  Revised some of the data collected in Phase I



due to the availability of additional information.



         5.  Analyzed all data collected and developed



conclusions based on this analysis.



         6.  Prepared a draft report covering the findings and



conclusions of Phase II.





    (c)  Phase III



    The draft reports covering the results of Phase I and



Phase II were combined into a single report, finalized and



submitted to the Environmental Protection Agency.

-------
                                                 EXHIBIT  I  -  1
                                                 Page 1 of  2
              ENVIRONMENTAL PROTECTION AGENCY

                 LIST OF REFERENCE SOURCES


SECONDARY SOURCES

         Annual Statement Studies, Robert Morris Associates

         Annual Survey of Manufacturers - 1971,
         U.S. Department of Commerce

         Business and Economic Evaluation of the Metal
         Finishing Industry, Michigan Business Reports
         No.52,  Graduate School of Business Administration,
         University of Michigan

         Census Bureau-Electroplating Engineering  Handbook,
         U.S. Department of Commerce

         Census of Manufacturers - 1967,  U.S. Department
         of Commerce

         Cost of Clean Water - Industrial Waste Profile
         Study Motor Vehicle and Parts,  November 1967,
         U.S. Department of Interior

         Development Document for Effluent  Limitations
         Guidelines and Standards of Performance -  Electroplating
         Industry (Copper.  Nickel, Chromium and Zinc)  ,1973,
         Battelle Memorial  Institute,  Draft

         Dun  & Bradstreet Reports

         Enterprise Statistics - 1967

         EPA  Technology Transfer Seminar  Publication - #1
         In-Process Pollution Abatement.  July 1973  -- #2
         Waste Treatment July 1973,  Environmental Protection
         Agency

         Finishers Management - National  Association of
         Metal Finishers

         Industrial Water Engineering

         Metal Working  Market Guide  1973, Iron Age

-------
                                                    EXHIBIT I - 1
                                                    Page 2 of 2
         Moody's Industrial Manual

         Predicast, Market Forecasts
PERSONAL INTERVIEWS
         (a)  Electroplaters

         A. T. Kearney industry survey of 41 independent and
         captive electroplaters.
         (b)  Banks

         A. T. Kearney survey of five Chicago area banks


         (c)  Others

         American Electroplaters Society
         East Orange,  New Jersey

         Dr. Fred Gurnham, Consultant, Chicago,
         Chicago, Illinois

         Mr. Scott Modjeska, Consultant
         Chicago, Illinois

         National Association of Metal Finishers (NAMF)
         Upper Montclair, New Jersey
             - Also 15 local chapters

-------
             II  - GENERAL INDUSTRY DESCRIPTION


     This section of the report provides a general insight into

 the operations of the Electroplating  Industry.   Included  is

 a broad description of the nature of the demand for electro-

 plating and how  other industry segments affect the viability

 of the electroplating industry.  A general description of the

 processes involved and the sources of water pollution are also

 discussed.  The  major headings of this section are:

                 Demand Characteristics for Electroplating

                 Description of the Plating Process

                 Sources of Water Pollution


DEMAND CHARACTERISTICS
  FOR ELECTROPLATING

     Electroplating is an electrochemical process performed on

manufactured parts when the original surface characteristic of

the base metal, used to form or manufacture the product, does

not possess the desired surface characteristic.  Some examples

of the desired finishes would include corrosion protection,

hard or durable finishes, bright or decorative characteristics,

electrical conductivity and others of a similar nature.


    The primary demand for  the electroplating process is

governed largely by the technical requirements of the industry

segments which manufacture  the end products.  For  example,

tool makers require a hard  chrome finish to provide durability

to the finished product.   Manufacturers of household products

-------
                                                         II -  2









require a soft chrome finish to provide a decorative finish.



Zinc or  cadmium finishes can be specified for corrosion



resistance.






     Although it is exceptionally difficult to provide accurate



estimates of the total demand for electroplating,  it is possible



to provide a general indication of the extent of usage of elec-



troplating in other industry segments.  By understanding this



broad industry dependence on electroplating, it is then possible



to understand some of the factors which can affect the demand



for the electroplating service.





     Exhibit II-l depicts the types of finishes required by 9



industry segments.  These SIC code 2 digit classifications



represent 86 separate industry groupings and well over 20,000



establishments which are potential users of electroplating.





    A significant number of the identified industry segments



perform  their own services in captive electroplating installations



However, a large number purchase their requirements from



outside  sources,  i.e.,  independent job shop platers.  Exhibit



II-2 shows approximately 4,800 identified plants which perform



some electroplating within their primary operation.





     Assuming a relative degree of accuracy of the data, some



15,000 additional plants are potential demand sources for



non-captive electroplating services.

-------
                                                         II - 3
     A  limited number of studies have been conducted to predict
 the  future demand for electroplating.  However, Predicast, a
 market  forecasting publication, estimates the consumption of
 chromic acid to grow at approximately 2.570 per year until 1975 .
 It is also estimated that the consumption of nickel for nickel
 plating will increase from 47 million pounds per year to 66
 million pounds by 1976.  Sales of nickel plating are predicted
 to increase at an annual growth of 6% during the same period.

     Clearly the demand for electroplating is broad and used
 in a wide range of industries.  It is also expected that the
 industry demand is expected to continue growing probably con-
 sistent with the growth of those segments which are major users
 of the service.
DESCRIPTION OF THE
  PLATING PROCESS
     (a)  Equipment
          Used
     The equipment requirements in the electroplating process
depend upon the physical dimensions of the workpieces being
plated.  Barrel and still plating are the two primary methods
in heavy commercial use.

     Many types of barrel finishing equipment are used.  Each
type essentially consists of a cylinder or barrel which con-
tains the parts being plated and a tank filled with the plating

-------
                                                         II - 4


solution.  The barrel is placed in the plating tank and the parts
are rotated in the solution.   An electrical current is discharged
either through the plating solution or directly to the parts
to complete the electroplating process.

     Typically, still plating methods involve the use of special
frames or racks which hold the parts in place while the plating
is being performed.  The racks serve the function of carrying
electrical current to the pieces in the plating tanks.

     (b)  Materials
          Used
     Raw material needs for the simple electroplating operation
are relatively minimum.  Acid dips, water, or special cleaning
solutions are used for any preliminary treatment that might be
required before the actual plating is done.  While hundreds of
different plating solutions are available commercially, cyanide,
alkaline and acid sulfate solutions are among those in popular
use.  Water is used in great  quantities in the rinsing cycles
of the electroplating process.

     Differences in the plating of various metals are explained
to a large extent by the specific properties of each metal,
personal knowledge of a particular series of operations and
preference for one method over another when a choice is avail-
able.   For example, sulfuric  acid pickling alone is generally
considered unsatisfactory for oxide removal from stainless
steels and corrosion-resistant alloys because black smut is

-------
                                                         II - 5


 left  on the workpiece  and/or the pickling time required is
 relatively longer.   Sulfuric acid, however, is a good pickling
 agent for the  removal  of copper oxide from the copper-rich
 alloys.  Similar  situations exist in other plating processes.

      (c)  Process
      	Flow
      A simple  electroplating process includes, essentially,
 four  sequential operations -- cleaning, plating, rinsing and
 drying.

      The objective of  the initial operation is to prepare the
 piece for plating by removing all foreign matter such as oil,
 grease, dirt and oxide that could retard or prevent actual
 plating of the workpiece surface.   If any abrading, pickling,
or other preliminary treatment is necessary, rinse tanks may
be needed to remove pre-treatment solutions, to provide good
 surface adhesion and to avoid contamination of plating solutions,

     Whatever method is employed,  still or barrel plating,  all
workpieces are rinsed between each step in the process and
finally, at  the end of the process,  before being allowed to
dry.

SOURCES OF WATER
  POLLUTION
     Rinsing  solutions  are the  major sources of water pollution
in the electroplating process.   These toxic substances find

-------
                                                         II - 6


their way to sewage systems and streams by a variety of means:
          1.  Accidental spillage or tank leaks.
          2.  Intentional dumpings.
          3.  Drag-out to rinses.
          4.  Losses due to the periodic cleaning and
              repacking of filters.
          5.  Vapor sprays or mists drawn off by the
              ventilation system.

     Closer supervision over the electroplating process serves
to reduce cumulative effects of accidental spillage and leaks,
toxic vapors, and the cleaning of filters.  Drag-out., however,
is a more difficult and continuous problem resulting from the
transfer of racks or barrels from one solution to another and
is the major source of pollution.  Intermediate rinsing solu-
tions become contaminated with solutions from previous tanks,
necessitating periodic dumpings.  Although volume of plating
and the type of process used are important elements in deter-
mining the amount of pollution, all electroplating shops con-
tribute to the problem of water pollution.

-------
ENVIRONMENTAL PROTECTION AGENCY


Economic Impact of Pollution Abatement
On The Electroplating Industry

End Uses of Electroplating by Industry Segments
SIC
Code
19
25
33
34
35
36
37
38
39
Source

Type of Finish

Corrosion
Industry Classification Durability Decorative Conductivity Protection
Ordnance
X X

Furniture and Fixtures X X
Primary Metal Industries XXX
Fabricated Meta
1 Products X X X X

Machinery Except Electrical XX X
Electrical and
Transportation
Instruments and
Electronic Equipment XXX
Equipment X X X X
Related Parts X X X X



Miscellaneous Manufacturing Industries X X X X
: Metal Working

Guide

EXHIBIT II-l

-------
                                                         EXHIBIT II-2
                ENVIRONMENTAL PROTECTION AGENCY
             Economic Impact of Pollution Abatement
             	On Electroplating Industry	
         Electroplating Operations by Industry Segments

SIC
Code       	Industry	         Plants
 25        Furniture and Fixtures                             119
 33        Primary Metal Industries                           232
 34        Fabricated Metal Products                        1,093
 35        Machinery Except Electrical                        922
 36        Electrical and Electronic Equipment              .1»115
 37        Transportation Equipment                           357
 38        Instruments and Related Parts                      574
 39        Miscellaneous Manufacturing Industries             364
                                          Total             4,776

Source:  Metal Working Guide

-------
       Ill  - PHYSICAL CHARACTERISTICS OF THE INDUSTRY


     In this section of the report physical characteristics of

the electroplating industry are discussed in order to determine

the major market segments expected to be significantly impacted

by pollution control standards.  These are discussed under the

following major topic headings.

              Primary industry segments

              Types of firms

              Size of the industry

              Industry survey

              Expected impact by industry segments

              Location of impacted shops

              Industry segment not considered

              Scope of Impact Analysis


PRIMARY INDUSTRY
  SEGMENTS

     The electroplating industry can be primarily segmented

into two major categories.

          1.  Independent (job) shops which sell their services

to an extensive listing of metal working industries as indicated

in Exhibit II-l and discussed in Section II,  page 2.

          2.  Captive installations owned and operated by the

specific  industry requiring the service.

-------
                                                        Ill - 2
 TYPES  OF
   FIRMS
     Electroplating  shops in the job shop segment can be further
 defined in  the  following categories:
              Integrated firms
              Multi-plant firms
              Single or multiple product firms
              Highly diversified firms
              Specialists

     The relevance of segmenting firms by these sub-categories
 is discussed.

     (a)  Level of
     	Integration
     Electroplating is an end product in the job shop segment
and a secondary operation in the captive segment.  If a shop
performed manufacturing, electroplating and polishing and
buffing to complete a product, it would be considered an inte-
grated plant within the primary manufactured product group.
The electroplating operation would be considered captive.

     Where the primary function is electroplating and other
secondary operations are performed, i.e., buffing and polish-
ing, this could be defined as an integrated electroplating
operation.  According to this definition, the independent shops,
where secondary operations are required, are for the must part
integrated.

-------
                                                        Ill - 3
     Segmenting the industry by level of integration does not
appear relevant for either captive or independent shops since
level of shop integration would not change as a result of new
pollution controls.  Since electroplating is the primary oper-
ation and the main source of water pollution in both segments,
other related operations in the electroplating shops are gen-
erally support functions and would not exist in the absence of
the primary operation.

     (b)  Number of
          Plants
     A relatively few independent electroplaters operate as
multi-plant firms, and these tend to be the larger shops.  Con-
sequently segmenting by size of employment separates the large
shops, which results in the multi-plant firms also being
segmented.  Since the larger shops are not as severely impacted
as other segments, sub-segmentation of large shops into single
versus multi-plant firms is not considered necessary.

     The larger shops, in terms of employee size, represent
approximately 8% to 1070 of the independent shops and approxi-
mately 15% of the captive shops.

     (c)  Number of
          Products
     Industry sources indicate little relationship exists be-
tween the number of products and the extent of pollution prob-
lems.  A more relevant measure would be the physical shape of

-------
                                                         Ill - 4
the product since products which drain poorly create greater

drag-out problems.  Consequently, they are greater sources for

pollution.  It would certainly be desirable to identify shops

which have the major drag-out problems caused by the product

design.  However, industry data are not compiled in this manner.


    (d)  Level of
    	Diversification

    Many electroplating shops operate as specialists in one

or more areas.  For example, it is not unusual to find a shop

which performs a single plating operation, i.e., hard chrome.

However, it is usual for shops to specialize in one product

and maintain other types of plating operations to maintain a

balanced operation.


     It is recognized that single purpose operations have fewer

control problems than highly diversified operations.  From an

economic impact point of view, it would be highly desirable

to segment the industry accordingly.  However, as previously

indicated this method of segmentation is not practical at this

time because of the lack of industry data.


SIZE OF THE
  INDUSTRY

     Considerable difficulty exists in determining the actual

number of electroplating shops operating within the United

States.  This is due to the nature of the industry and relative

-------
                                                         Ill  -  5
 ease of entry into the market place.   A single  plating  product
 line requires low initial capital investment  and  an  independent
 or captive shop can easily be established.  When  these  opera-
 tions are small,  it is understandable  that  they go undetected
 and are not included in industry  statistical  data.   This  is
 particularly true with the captive segment  since  they rarely
 market services outside the captive environment.  Conversely,
 independent shops seeking stronger market positions  tend  to be
 listed in industry directories and other marketing publications;
 consequently the  data  are probably more accurate.  In addition
 census enumeration methods are different, and the data  more
 complete  in the  independent  segment.

      (a)  Number  of Industry
     	Establishments	
     The  table below summarizes the number of establishments
 reported  in the electroplating industry.
                     Table III - 1
               Electroplating Establishments
            Industry  Segment         Establishments
         Captive  Installations          2,389
         Independent Shops              3,241
                       Total            5,630
Sources:  U.S. Department of Commerce.
          Bureau of Census.

-------
                                                        Ill -6
     This data indicates that of the total identified

establishments, approximately 60 percent are in the indepen-

dent shop category.


     (b)  Size of
     	Employment

     Similar to data on establishment size, data on employment

size is recognized to be understated because of three factors:

          1.  Aggregate census data for the captive segment ex-

cludes specific information which would disclose the actual size

of a single firm when that firm is the only one in the group.

          2.  All captive installations do not respond to

census inquiries.

          3.  Captive shops within industries having less than

10 total employees, including electroplating employees, are

not included in the reported number.


     The following table shows reported employment by type of

electroplating installation.

                     Table  III - 2
                    Industry Employment

              Industry Segment        Employment

            Captive Installations       23,000

            Job Shops                   55,000

                     Total              78,000

Sources:  U.S.  Department of Commerce.
          Bureau of Census.

-------
                                                         Ill  -  7
 INDUSTRY
   SURVEY

      The limited scope of coverage provided by  census  data  re-

 quired additional information to  be compiled  for use in  the

 impact analysis  phase of the  study.  These data were obtained

 in an industry survey.


      Exhibit  III-l is a summary of information  gathered  from

 38 independent and 3  captive  shops.  The data provide  a  basis

 for many assumptions  used in  the  analysis of  the industry and

 the effects which pollution controls are expected to have on

 the independent  segment.   Particular emphasis on characteris-

 tics  such as  size,  diversification, plant location, sales

 volume and production constraints  were of concern to determine

 the relative  degree of  impact on  the two primary segments of

 the industry.


      (a)  Sales

     Annual sales  range  from $60,000 to $8,000,000; however,

 most of  the shops  surveyed reported sales of less than one

 million  dollars.  Although no definite conclusions can be drawn

 from the small sample, the independent shops are typically

 small businesses, operating on relatively small annual sales

volumes.
     (b)  Survey and Industry
     	Employment	
     Electroplating shops, in the independent segment particu-

larly, are small in terms of employment as indicated by the

-------
                                                         Ill - 8

survey data.  Most of the shops reported employment of less
than 50 persons.

    Industry employment data are shown on Exhibit III-2 for
the independent shops.  Approximately 60 percent of independent
segment electroplating employees work in shops where total
employment is less than 50 persons.  These shops, with less than
50 persons, represent 92 percent of the total number of estab-
lishments in the independent shop segment.

    Exhibit III-3 reflects a total employment for the captive
shop segment.  Clearly, a large number of the captive shops are
small and approximately 80 percent of the total establishments
have fewer than 20 people.  However, the majority, approximately
70 percent, of electroplating employment occurs in the larger shops
    Exhibit III-A lists 86 industries which have captive shops
and classifies the shops by sizes of employment.  According to
these data, the average employment in a small shop is two
persons.  In the large shop approximately 50 persons are employed.

    Exhibit III-5 is a listing of 12 of the major industries
selected on the basis of total numbers of establishments.
The average employment in these shops is also equal to
approximately 50 persons.  Compared to independent shops, this
would be considered a large installation since in many instances,
these shops do not require the same level of management and

-------
                                                         Ill - 9

 overhead personnel.  They are shared with other operations in
 the captive  industry.  This is not true in the independent shop.

     Assuming the extent of automation is also greater in a cap-
 tive installation, because of the similarity of the product and
 the repetitive nature of the operations, a fifty-man shop is a
 major installation by comparison to a fifty-employee independent
 shop.

EXPECTED IMPACT BY
  INDUSTRY SEGMENTS
     Based on the above discussion, we believe the impact of
pollution abatement will be significant in two segments of the
industry.   Small shops will be impacted for both independent
and captive segments.  However, the major effect will be in the
independent segment for the following reasons:
          1.   A greater number of small independent shops exist.
          2.   Employment in the independent segment is greater
in small shops than in small captive shops.
          3.   Captive shops generally have a larger organization
capable of supporting additional operating costs for pollution
control.
          4.   Ability to raise necessary capital requirements
for equipment is greater in the broader based captive shop
environment.
     It is expected that within the independent segment, large
shops will be impacted but not as severely as the small shops,
particularly at the lower employment levels.   The survey data

-------
                                                     Ill -  10

in Exhibit III-l indicated:
          1.  Low sales volumes for small shops,  thus indicating
insufficient cash flows for  purchasing expensive  control equip-
ment.
          2.  Constraint on  physical plan space possibly neces-
sitating additional land and building to house control equipment.
This will add to the capital requirements.
          3.  Diversification is high in the small shops in order
to hold customers.  Therefore, several treatment  systems will
probably be required as degree of diversification increases.

LOCATION OF
  IMPACTED SHOPS
     Electroplating shops are located in nearly all fifty states;
however, the major concentration is in the principal industrial
areas in the Midwest, Northeast and the Western Seaboard.

     Exhibit III-6 displays  the location of independent shops.
The location of captive shops is estimated to be  identical to
job shops since both segments service the same industries.
     Geographical segmentation is important to consider, espe-
cially in areas where relatively few shops exist.  The impact
of pollution control requirements on the electroplating segment
can be relatively minor in areas where shops and  direct employ-
ment are not significant.  However, industries dependent upon

-------
                                                       Ill - 11


 these  smaller  shops  for their services can be indirectly impacted
 as  a result  of controls, because of expected price increases.

 INDUSTRY SEGMENT
  NOT  CONSIDERED
     While the study is concerned with electroplating work on
 manufactured and assembly products using zinc, nickel, chromium
 and copper as  the plating metal, it is recognized that basic
 industries such as steel and aluminum have sizeable electro-
 plating facilities using these metals and also perform other
 types  of plating.  It is our understanding for the purpose of
 this study that plating in these basic industries (steel and
 aluminum) will be covered in separate studies of these indus-
 tries.

 SCOPE  OF
  IMPACT ANALYSIS
     The impact analysis discussed in Section VII has been
 limited to cover independent electroplating shops employing
 fewer  than 100 employees.   This range of size and industry
 segment has been selected for the following reasons:
          1.   Independent shops can be more easily identified
in relation to size and location.
          2.   Cost data are more readily obtainable from the
independent segment.   Captive installations, particularly the
small ones, consider the cost of operating the plating line as
overhead.   Consequently, extensive plant cost analysis would

-------
                                                         Ill - 12
be required to gather the required cost information from
these shops.
         3.  Independent shops with a small amount of employment
are more likely to be restricted in capital requirements than
larger independent shops.

-------
ENVIRONMENTAL PROTECTION AGENCY
ELECTROPLATING INDUSTRY
INDUSTRY SURVEY SUMMARY
Data Item:
Urban or Rural Location
Job Shop or Captive Shop
Corporation or Other
Company /Owner
Total Square Feet/Plating
Square Feet
Total Employees/Plating Employees
Plating Lines (Percent of Sales )-
Nickel
Chrome
Zinc
Copper
Cadmium
Other
Still Plating or Barrel Plating
Major Plant Capacity Constraints
Pollution Equipment - Type
Percent Effluent Treated
Water Usage - Gallons per Day
Dispose Into - Sewer or Stream
Sludge Removal - Method
Pollution Control Equipment -
Installation Date
Operational Date
Cost (Actual or Estimate)
Estimated Total Cost to Complete
Operating Cost of Pollution
Control Equipment
Results Achieved
Capitalization-- Total
Financing Capability
Sales Per Year
Profit Before Taxes
Profit After Taxes
Company Identification Number
1
Urban
Job Shop
Corporation
18/40
17.000/
8,000
25/18
57.
957.
Still
Space
Hauling
Service;
No dumping
07,
-
-
Pick-Up
Service
No Equip-
ment
No Equip-
ment
$100,000-
$150,000
-
-
-
-
-
$300,000-
$400,000
-
6-107.
2
Urban
Job Shop
Corporation
11-
10.000/
6,000
10-12/8
1007.
Both
Space
Now = Pre-
cipitation
and Filtra-
tion;
Future =
Batch
Process
407.+
7,000
Sewer
Negligible
12 Months
Ago
3 Months
Ago
$20,000-
$50,000
$75,000
$5,000-
$10,000
per year
OK
-
-
$500,000
107.
-
3
Urban
Job Shop
Corporation
33/25
35.000/
30,000
30/15
57.
707.
207.
57.
Brass, Tin,
Silver
Both
Old build-
ing
Semi Con-
t inuous ;
Gas Chlori-
nation.Only
on Cyanide
1007.
167,000
Sewer
Pick-Up
and Sewer
-
-
$150,000-
$200,000
-
$400-5600
per month
Cyanide
Only
$400,000
Good
$786,000
$22,000
$17,000
4
Urban
Job Shop
and Some
Captive
Corporation
13/-
18.000/
8,000
35-40/8
-
Barrel
Space
None except
for Cyanide
conversion
-
-
-
-
-
-
$50,000
-
-
-
-
-
-
-
-
5
Urban
Job Shop
Corporation
13/20
7.000/
6,000
7/4
507.
Minor
Gold,
Silver 507.;
Tin
Both
Space
Bath De-
struction;
Chemical
337.
600
Both
Pick-Up
1969
1969
$7,000-
$8,000
-
$25 per
week
Good Shape
$100,000
Minor
Problems
$300,000
Lost $ Last
3 Years
-
6
Urban
Job Shop
Corporation
9/30
8.500/
10,000
8/6
Silver
Both
-
Destruction
1007.
48,000
Sewer
Pick-Up
February
1973
Not
Operating
$9,000
$9,000
-
Problems
$100,000
Minor Loans
$200,000
$20,000
-
7
Urban
Job Shop
Corporation
13/-
18.000/
17,000
37/29
75-807.
Still
-
Neutrali-
zation and
Destruction
1007.
-
Sewer
Pick-Up
Began 13
Years Ago
-
-
-
-
Good
$250,000
Available
$800,000
-
-

5
Urban
Job Shop
Corporation
20/30
8.000/
5,500
55/33
20%
5%
257.
Tin- 507.
Both
Space
Destruction
Chlorina-
tion,
Settling,
Centrifuge
10%
200,000
Sewer
Pick-Up
1971
6 Months
Ago
$70,000
$70,000
$700+ per
month
Good-907.
of the Time
$550,000
Good
$1,200,000
-
3.87.
EXHIBIT III-l
Page 1 of 4
5 "
Urban
Job Shop
Corporation
20/-
10,0001
8,000
30/22
337.
Aluminum
337.
-
Space
None
07.
-
Sewer
Pick-Up
N/A
N/A
-
-
-
Doing
Nothing
$100,000
-
$500,000
-
-
1U
Urban
Job Shop
Corporation
30/-
3.300/
500
25/19
957.
Tin 57.
Barrel
Space
Integrated
Cyanide
1007.
6,000
Sewer
Pick-Up
1953
1953
$50,000
-
-
Meeting
Guidelines
-
-
$500,000-
$700,000
-
-

-------
Data Item:
Urban or Rural Location
Job Shop or Captive Shop
Corporation or Other
Number of Years in Business -
Company/Owner
Total Square Feet/Plating
Square Feet
Total Employees /Plating Employees
Plating Lines (Percent of Sales) -
Nickel
Chrome
Zinc
Copper
Cadmium
Other
Still Plating or Barrel Plating
Major Plant Capacity Constraints
Pollution Equipment - Type
Percent Effluent Treated
Water Usage - Gallons per Day
Dispose Into - Sewer or Stream
Sludge Removal - Method
Pollution Control Equipment -
Installation Date
Operational Date
Cost (Actual or Estimate)
Estimated Total Cost to Complete
Operating Cost of Pollution
Control Equipment
Results Achieved
Capitalization - Total
Financing Capability
Sales per Year
Profit Before Taxes
Profit After Taxes
ELECTROPLATING INDUSTRY SURVEY SUMMARY (CONTINUED)
Company Identification Number
11
Urban
Job Shop
Corporation
1.21-
15.000/
4,000
28/20
99%
Both
Space
CleariCier
100%
60
Sewer
Pick-Up
1961
-
-
-
-
Cyanide
Only
$60,000

$60,000
-
-
12
Urban
Job Shop
Corporation
13/13
30.000/
21,000
70/50-60
{20%
55%
X
Solder
conversion
coating
Both
-
Evaporate;
Destruct;
Ph control
60%
120,000
Sewer
Pick-Up
12 Months
Ago
3 Months
Ago
$125,000
$205,000-
$210,000
$5.10 per
Hour
Good
$620 ,000
Pretty
Good
$1,500,000
$172,500
$97,500
13
Urban
Captive
Shop
Corporation
-
-/
3,000
-/5
-
Barrel
-
Atmospheric
Evaporators
Most
-
Sewer
No Sludge
2 Years
Ago
6-12 Months
Ago
$3,000
$3,000
-
Good
-

-
-
-
14
Urban
Job Shop
Corporation
-/44
40.000/
16,000
69/45
X
Anodizing,
etc.
Still
Space
None
-
-
Sewer
Pick-Up
None
None
$30,000-
$40,000
-
-
Not Being
Checked
$300,000
Good for
$25,000-
$100,000
$1,250,000
$1,500,000
-
$20,000
15
Urban
Job Shop
Corporation
201-
13.000/
11,000
18/15
90%
Still
-
None as
such
0
-
Sewer
None
N/A
N/A
$75,000
$75,000
-
Prob lem
$83,000
Pretty
Good for
Small Plant
$275,000
-
5%
16
Urban
Job Shop
Corporation
27/8
75.000/
45,000
43/34
20%
9%
Anodizing
and
Painting
Still
-
Cleari-
fiers;
Rinses
20%
200,000
Sewer
Pick-Up
-
-
$50,000-
$250,000
$50,000-
$250,000
-
Problem
$680,000
Bad
$850,000
-
-$25,000
17
Rural
Job Shop
Corporation
36/-
15.000/
14,000
25/23
100%
Still
-
Dillution
100%
5,000
Stream
Stream
1970
1971
-
-
-
Good
-
Available
$600,000
-
$20,000
18
Urban
Job Shop
Corporation
40/-
30.000/
50/40
45%
30%
Gold and
Silver
Both
-
Dillution
100%
-
Sewer
None
June 1968
January
1969
-
-
-
Minor
Problems
$700,000
$150,000
Available
$1,014,000
10%
-
EXHIBIT I1I-1
P
19
Urban
Job Shop
Corporation
30+/-
36.000/
28,000
59/40-45
*>50%
Both
-

20
Urban
Job Shop
Corporation
39/-
60.000/
30-35,000
120/100
10%
Precious
Metal
Both
Space
Electro- Water Conser-
Chemical vation;
Ph Control
100%
-
Stream
None
April 1,
1971
December
1973
-
$400,000
-
Minor
Problems
-
*
$1,000,000
-
.
100%
133,000
Sewer
Pick-Up
-
-
-
5350,000-
$375,000
-
Problems
$1,760,000
Near
Capacity
$1,600,000
$1,975,000
-
_

-------
EXHIBIT III-l
Data Item:
Urban or Rural Location
Job Shop or Captive Shop
Corporation or Other
Number of Years in Business -
Company /Owner
Total Square Feet/Plating
Square Feet
Total Employees/Plating Employees
Plating Lines (Percent of Sales)-
Nickel
Chrome
Zinc
Copper
Cadmium
Other
Still Plating or Barrel Plating
Major Plant Capacity Constraints
Pollution Equipment - Type
Percent Effluent Treated
Water Usage - Gallons per Day
Dispose Into - Sewer or Stream
Sludge Removal - Method
Pollution Control Equipment -
Installation Date
Operational Date
Cost (Actual or Estimate)
Estimated Total Cost to Complete
Operating Cost of Pollution
Control Equipment
Results Achieved
Capitalization - Total
Financing Capability
ELECTROPLATING INDUSTRY SURVEY SUMMARY (CONTINUED)
Company Identification Number
21
Urban
Job Shop
Corporation
62/-
140, OOO/
50,000
425/375
707.
Still
-
Conserva-
tion;
Clearifi-
c at ion
1007.
-
Sewer
-
-
-
$50,000
-
-
Problems
$2,000,000
Good
22
Urban
Job Shop
Corporation
40/-
60, OOO/
35,000
125/60
707.
Both
-
Ph Control
-
200,000
Sewer
None
-
-
$300,000
$300,000
-
Not Being
Checked
-
Good
23
Urban
Job Shop
Corporation
40+/-
100, OOO/
90,000
140/125
fr°*
Rust
Proofing
Both
-
Chemical
Destruc-
tion;
Experi-
mental
507.
-
Sewer
Pick-Up
April 1973
2 Months ago
$75,000
-
-
Minor
Problems
$450,000
Good
24
Urban
Job Shop
Corporation
21/-
21, OOO/
17,500
28/23
907.
Both
-
Cyanide to
Cyanate
Conversion
507.
-
Sewer
-
-
-
$29,000
-
-
-
$61,000
Good
25
Urban
Captive
Shop
Corporation
30/-
:'
-/ISO
107.
57.
57. (
Brass 707.
Both
-
Cyanide
Treatment
77.
3,000,000
Sewer
Pick-Up
-
-
$80,000
$120,000
$34,000
per Year
-
-
-
26
Urban
Job Shop
Corporation
25/-
28.000/
14,000
75/50
*
257.
*
* - 507.)
Anodizing
257.
Both
-
Cyanide to
Cyanate
Convers ion
507.
340,000
Sewer
None
Cyanide-
3 years ;
Chrome -
6 months ago
Chrome-
August 1973
$12,000
-
-
Good
$750,000
Pretty
Good
27
Urban
Job Shop
Corporation
23/-
35, OOO/
25,000
70/35
257.
x). ,
x)25/.
Precious
Metal 507.
Both
-
Clearifiers
1007.
4,000
Sewer
Pick-Up
-
-
$30,000
-
-
Problems
$240,000
Very Tight
28
Urban
Job Shop
Corporation
15/13
7.500/
2,400
8/4
X
X
X
Anodizing
407.
Both
Space
None
-
100,000
Sewer
-
-
-
$45,000-
$85,000
$45,000-
$85,000
-
-
-
Bad
Problem
f:
29
Rural
Job Shop
Partnership
10/9
1,200/
800
2/2
fro%
X
Brass,
Bronze,
Silver
Both
Space
Cascade
1007.
1,500
Stream
City Dump
-
-
-
-
-
-
-
-
age 3 of 4
30
Urban
Job Shop
Partnership
58/38
22, OOO/
18,000
40/34
207.
207.
157.
157.
157.
Others 157.
Both
Space , Labor
Ph Control
Rinse Tanks
1007.
81,000
Sewer
-
May 1972
June 1973
$70,000
-
$500 per
Month
Good
$600,000
Good
Sales  per Year
Profit Before Taxes
Profit After Taxes
$8,000,000   $2,000,000   $2,700,000   $373,600
                                      $19,400
             Lost  $       -            $13,500
$1,500,000   $1,250,000   $260,000     $30,000
                                                                                                                  -$20,000     $21,600
                                                    $800,000

-------
ELECTROPLATING INDUSTRY SURVEY SUMMARY (CONTINUED)
Data Item:
Urban or Rural Location
Job Shop or Captive Shop
Corporation or Other
Number of Years in Business -
Company /Owner
Total Square Feet/Plating
Square Feet
Total Employees/Plating Employees
Plating Lines (Percent of Sales)-
Nickel
Chrome
Zinc
Copper
Cadmium
Other
Still Plating or Barrel Plating
Major Plant Capacity Constraints
Pollution Equipment - Type
Percent Effluent Treated
Water Usage-Gallons per Day
Dispose Into - Sewer or Stream
Sludge Removal - Method
Pollution Control Equipment-
Installation Date
Operational Date
Cost (Actual or Estimate)
Estimated Total Cost to Complete
Operating Cost of Pollution Control Equipment
Results Achieved
Capitalization - Total
Financing Capability
Sales per Year
Profit Before Taxes
Profit After Taxes

(31)
Urban
Job Shop
Corporation
26/26
17.000/
13,000
15/9
100%
Still
Space
Now=»None ;
Future-
Finalizer
with PH
Control
07,
-
Sewer

No Equipment
No Equipment
$44,000-
55,000
-
-
Meeting
Guidelines
$320,000
Good
$400,000
$32,000
$24,000

(32)
Urban
Job Shop
Corporation
1/9
40.000/
18,000
12/11
x) 1007.
x'
Still
-
Now»None;
Future=
Nickel
Filter
07.
-
Sewer
-
No Equipment
No Equipment
-
-
-
Problems
$80,000
Pretty Poor

-
-

(33)
Urban
Job Shop
Corporation
11-
5.000/
15/15
257.
207.
407.
Bronze-157.
Both
Space, Labor
Cyanide
Converston
107.
385,000
Sewer
-
-
$40,000
60,000
-
-
Meeting
Guidelines
$95,000
Loans
Available
$400,000
$25,000
$18,000
Company
(34)
Urban
Job Shop
Corporation
ll/-
4.900/
3,000
13/11
407.
27.
407.
Phosphating-
67.
Both
Space
Cyanide
Conversion
57.
30,000
Sewer
Pick-Up
1971
$60,000
70,000
-
-
Meeting
Guidelines
$54,000
Loans
Available
$218,000
$3,000
$2,400
EXHIBIT III-l
Page 4 of 4
Identification Number
(35)
Urban
Job Shop
Corporation
31/31
15.000/
7,500
30/28
x) Major
x)
Minor
Gold
Still
-
Now=Autoroat-
ic Foggers ;
Future*Re-
verse Osmo-
sis and
Evaporator
07.
182,000
Sewer
No Sludge
;
-
$295,000
-
Good
$336,000
Problems
$550,000
-
$12,000
(36)
Urban
Job Shop
Corporation
20/55
10.000/
9,000
11/9
x
507.
x
Black
Oxide-307.
Barrel
-
Now=Neutrali-
zation and
Setting;
Future=Water
Conserva-
tion
1007.
5,000
Sewer
Pick-Up
1968
$40,000
$86,000+
$16,000
Problems
$360,000
Funds
Available
$180,000
$12,600
$9,000
(37)
Urban
Job Shop
Corporation
25/-
7.000/
4,000
34/25
207.
107.
507.
107.
57.
57.
Both
Space
Precipita-
tion and
Cyanide
Destruction
-
114,000
Other
Pick-Up
:
$35,000
$85,000
-
Good
$75,000+
-
-
-
-
(38)
Urban
Job Shop
Corporation
12/12
8,000/
6,500
15/10
557.
137.
157.
177.
Both
Space
Drag-out
Tank; PH

07.
-
Sewer
Pick-Up
1969
$35,000
-
-
Good-807.
o£ Time
$165,000
Problems
$307,000
$27,000
-
(39)
Urban
Job Shop
Corporation
40/25
30.000/
18,000
60/50
307.
x
301
307.
Black
Oxide
Both
Space
Dillution
-
500,000
Sewer
-
:
$100,000
-
-
Meeting
Guidelines
$1,125,000
No
Problem
$1,500,000
$225,000
$75,000
(40)
Urban
Job Shop
Corporation
50+/43
15.000/
7,000
31/28
157.
207.
107.
187.
Brass-207.:
Phosphate
Coating and
Others -177.
Both
Space
Now=None
Future*
Settling
-
80,000
Sewer
Pick-Up
No Equipment
No Equipment
$50,000
-
-
-
$521,000+
Loans
Available
$768,000
$150,250
$100,100
(41)
Urban
Job Shop
Proprietorship
15/40
10,000/
9,500
18/17
207.
807.
x
Both
Space
Cyanide
Destruction ;
Conservation
1007.
11,400
Sewer
Neligible
1971
1972
$15,000
-
-
Meeting All
Guidelines
$400,000
Loans
Available
$250,000
$45,000
$20,000+

-------
                                                   EXHIBIT III-2
              ENVIRONMENTAL PROTECTION AGENCY

           EMPLOYMENT IN INDEPENDENT SHOP SEGMENT

 Shop Size
 By Number          Establishments             Employment
of Employees
    7-9
   10-19
   20-49
   50-99
  100-499
 500 or More
     Total         3.241       100%        55.100       100%
Note:   (1)  Information not available to protect
            individual company.
Source:   Census of Manufactures.
Number
1,807
579
620
171
63
1
Percent
56%
18
19
5
2
-
Number
6,100
8,100
18,900
11,400
10,600
(1)
Percent
11%
15
34
21
19
-

-------
                                                 EXHIBIT III-3
            ENVIRONMENTAL PROTECTION AGENCY


       TOTAL EMPLOYMENT IN CAPTIVE SHOP SEGMENT
Shop Size
by Number          Establishments              Employment
of Employees


20

1-4
5-19
or More
Total
Number
1,014
710
356
2,080
Percent
49%
34
17
100%
Number
1,772
5,490
15,692
22^954
Percent
870
24
68
1007o
 Source:  Census of Manufactures.

-------
                                                            ENVIRONMENTAL  PROTECTION AGENCY

                                                    STUDY OF ECONOMIC  IMPACT OF POLLUTION ABATEMENT
                                                    	ON  ELECTROPLATING INDUSTRY	

                                                  ELECTROPLATING  OPERATIONS IN METALWORKING INDUSTRY
                                                                Number of Establishments
SIC
Code

1925
1929
1931
1951
1961
1999
3421
3423
3425
3429
3431
3432
3433
3441
3442
3443
3444
3446
3449
3451
3452
3461
3492
3493
3494
3498
3499
3511
3519
3542
3544
3545
3548
3553
3559
3562
3564
3566
3569
3572
3573
3574
3576
               Industry
Complete Guided Missiles
Ammunition
Tanks and Tank Components
Small Arms
Small Amis Ammunition
Guns, Howitzers and Ordnance Access.
Cutlery
Hand and Edge Tools
Hand Saws and Saw Blades
Hardware
Metal Sanitary Ware
Plunbing Fittings and Brass Goods
Heating Equipment
Fabricated Structural Steel
Metal Doors, Sash and Trim
Fabricated Plate Shop - Boiler Shops
Sheet Metalwork
Architectural Metalwork
Miscellaneous Metalwork
Screw Machine Products
Bolts, Kuts, Rivets and Washers
Metal Starpings
Safes and Vaults
Steel Springs
Valves and Pipe Fittings
Fabricated Pipe and Fitting
Fabricated Metal Products
Steam Engines and Turbines
Internal Combustion Engine
Machine Tools
Special Dies, Tools, Jigs and Fixtures
Machine Tool Accessories
Metal Working Machinery
Woodworking Machinery
Special Industry Machinery
Ball & Roller Bearing
Blowers and Fans
Power Transmission Equipment
General Industry
Typewriters
Electronic Computing Equipment
Calculating and Accounting Machinery
Scales and Balances
Electroplating and Other Plating
Number of
Establishments
12
11
4
7
4
9
15
57
8
137
4
39
7
3
20
7
12
3
3
20
84
119
2
2
34
11
42
2
14
5
29
32
16
10
23
11
4
16
10
7
25
11
1
Number
1 to 4
.
7
1
4
1
5
9
32
6
45
1
12
3
1
5
7
9
3
2
16
44
61

2
24
8
25
1
6
5
21
22
11
3
15
4
3
13
7
-
8
1

of Production V
5 to 19 20
6
3
3
2
2
3
4
21
2
56
1
13
3
1
7
.
3


4
28
37
2

9
2
10
1
4

7
10
5
4
8
6
1
1
2
3
12
7
1
Jorkers
or More
6
1
_
1
1
1
2
4

36
2
14
1
1
8
.


1

12
21


1
1
1

4

1


3

1

2
1
4
5
3

                                                                                                                             jloyment
Electroplating
Employees
417
78
A
86
53
82
112
357
31
3,120
A
681
52
29
511
9
30
5
A
74
856
1.230
A
A
163
93
194
A
253
11
139
115
66
129
114
69
17
82
44
279
372
416
A
Number
1 to 4
.
18
A
12
A
10
28
55
A
109
A
30
5
A
14
9
13
5
A
33
83
109

A
47
A
40
A
16
A
39
23
19
4
26
5
A
25
13

19
A
A
of Production Workers
5 to 19
62
A
A
A
A
A
A
188
A
• 510
A
143
A
A
58

17


41
256
322
A
_
A
A
A
A
40

A
92
47
32
88
A
A
A
A
36
148
A
A
20 or More
355
A

A
A
A
A
114
_
2.501
A
508
A
A
439



A

507
799

_
A
A
A

197

A


93

A

A
A
243
205
A
A
































t



. »c
&
00
(t
h-
O
M
10


-------
                                                    STUDY OF ECONOMIC  IMPACT OF TOLLUT10N ABATEMENT
                                                             J)N  ELECTROPLATING INDUSTRY.
                         Industry
          Office Machines
          Automatic Merchandising Machines
          Connercial Laundry Equipment
          Refrigeration Machinery
          Service Industry Machines
          Miscellaneous Machinery
          Electric Measuring Equipment
          Switch Gear and Suitchboard Apparatus
          Motors and Generators
          Industrial Controls
          Household Cooking Equipment
          Household Refrigerators and Freezers
          Household Laundry Equipment
          Electric Housewares and Fans
          Household Vacuum Cleaners
          Seuinv, Machines
          Household Appliances
          Lighting Fixtures
          Current Carrying Wiring Devices
          Non-Current Carrying Wiring Devices
          Radio and TV Receiving Sets
          Telephone and Telegraph Apparatus
          Radio and TV Communication Equipment
          Electron Tubes Receiving Set
          Cathode Ray Picture Tubes
          Electron Tubes, Transmitting
          Se~i Conductors
          electronic Components
          Engine Electrical Equipment
          I-'otor Vehicles
          Truck and Bus Bodies
          Motor Vehicles Parts and Accessories
          Aircraft
          Aircraft Engines and Engine Parts
          Aircraft Equipnent NEC
          I-'.otorcycles, Bicycles and Parts
          Trailer Coaches
          Transportation Equipment
          Engineering and Scientific Instruments
          Mechanical Measuring Devices
          Automatic Temperature Controls
          Watches and Clocks
          Vatchcases
£CTROPLATING OPERATIONS IN MKTALWORKING INDUSTRY
Number of Establishments
Electroplating and
Number of:
Establishments
9
8
5
14
7
107
37
80
29
17
8
3
6
36
4
5
2
75
40
13
14
25
114
3
2
14
38
184
24
10
1
98
23
37
73
9
1
H
22
35
17
17
12
2.389
Number of
1 to 4
2
6
4
7
7
73
21
52
20
6
4

1
12

3
1
35
21
6
7
5
51

1
7
18
107
11
3
1
40
6
17
35
1
1
i
{.
20
23
7
5
6
1,107
Other PJLatinj
Production V
3 to 19 20
6
2
1
7

27
11
22
9
6
2

3
12

2

30
13
4
5
8
38
2
1
6
15
56
10
4

32
9
7
23
5
A
1
2
7
8
8
6
704
;
Jorkers
or More
1




7
5
6

5
2
3
2
12
4

1
10
6
3
2
12
25
1

1
5 •
21
3
3

26
8
13
15
3
A
1
-
5
2
4
-
356

Electroplating
Employees
123
34
14
81
16
592
286
583
132
262
106
106
111
, 607
105
A
A
754
431
178
277
615
1,583
A
A
109
428
1,611
242
A
A
1,699
760
1,353
759
300
A
A
58
290
163
276
61
Employ
Number
1 to 4
A
A
A
14
16
122
39
102
39
10
11

A
28
.
A
A
62
141
17
17
11
92

A
21
39
201
23
A
A
78
10
38
70
A
A
4
A
36
18
7
10
rment

of Production Workers
5 to 19 20
A
A
A
67

218
85
224
93
54
A

A
133
-
A

282
133
55
D
73
360 1
A
A
A
. 152
540 1
93
39

288 1
96
59 1
201
A

A
A
69
A
84
51
or More
A

A


232
162
257

198
A
106
A
446
105
A
A
410
257
106
D
531
,131
A

A
237
,070
126
A

,333
654
,256
488
256

A

185
A
185
-
                                                                                                            25,474
,085
1,529
15,692
N-,te:
                                                                      • i         -

           Not Available - Information suppressed to protect specific plants  in survey.

-------
                                  EXHIBIT  III-5
ENVIRONMENTAL PROTECTION AGENCY
EMPLOYMENT IN
Industry
Miscellaneous Machines
Bolts, Nuts, Rivets and
Washers
Plumbing Fixtures and
Brass Tools
Hand and Edge Tools
Hardware
Metal Stampings
Switchgear and Switch-
board Apparatus
Lighting Fixtures
Radio and Television
Communication
Electronic Components
Motor Vehicle Parts and
Accessories
Aircraft Equipment and
Engine Parts
Total
LARGE CAPTIVE SHOPS
Number of
Establishments
7
12
14
4
36
21
6
10
25
21
26
33
215
Employment
20 or More
232
507
508
114
2,501
799
257
410
1,131
1,070
1,333
1,744
10,606
Average
Number of
Employees
33
43
36
29
69
38
43
41
45
51
51
51
49

-------
      ENVIRONMENTAL  PROTECTION  AQENCV
ECONOMIC IMPACT  OF  POLLUTION  ABATEMENT QhJ
         ELECTROPLATING
  LOCATION  OF  INPEPEWENT
          NORTH CENTRA

-------
                    IV -  FINANCIAL  PROFILE

     A  limited amount of information  is available within the
Electroplating I.ndustry  relative to the financial condition of
individual  firms.   The major reason for the  limited amount of
financial information is  that the  majority of the firms are
relatively  small, family-controlled businesses, and the finan-
cial conditions of  these  firms are considered to be confidential
in nature.  Industry  studies, which have been made available,
have been supplemented with direct contacts with individual
firms.  This was done  to  cross-check  the industry data, and to
develop a general profile of firms at varying sizes of employ-
ment and sales.  Employment; and sales values have been further
used to develop five  groups against which to assess the economic
impact of pollution abatement.

GENERAL INDUSTRY
  FINANCIAL STATISTICS
     Exhibit IV-1 page 1 contains  general financial statistics
for SIC 3471 which includes electroplating.
     Exhibit IV-1 page 2 contains  some of the same statistics
as page 1 but presents a distribution of the data by the aver-
age number of employees per establishment.
     These two exhibits can be analyzed to show the general trend
of the plating and polishing industry.  However, it is not possi-
ble to isolate the electroplating  industry portion of the entire
industry from these  numbers.   Careful  analysis  of these data

-------
                                                    IV - 2

in conjunction with the other data does allow general conclu-
sions to be made.  Specific comments appear later in this
section af the report.

OPERATING
  REVENUES
     The 1967 Census of Manufacturing Data indicated that the
average value of shipments for independent electroplating shops
was approximately $15,500 per employee.  Based on this informa-
tion, the small shops employing less than four people, had an
average annual sales of approximately $29,000.  The larger shops
ranging between 250 and 500 employees had average annual sales
of approximately $6 million.  These data have been summarized
in Exhibit IV-2.

     In a recent study which covered approximately 45 independent
electroplating shops ranging from 2 to 65 employees, sales ranged
from $60,000 per year in the small shops to $1.5 million per year
in the larger shops.  By adjusting the 1967 Census Data for 5
years at an annual increase of 6.970, a good correlation is found
between the sample studies and the 1967 adjusted Census Data.
This information is summarized below:
                         Table IV-1
Annual Sales Per Establishment
Employee Range
1- 4
5- 9
10-19
20-49
50-99
($000)
Adiusted 1967 Data
$ 40.3
135.0
262.9
594.3
1,345.5
Sample Data
$ 60.0
210.0
317.0
610.0
1,500.0

-------
                                                      IV -  3
 PROFITABILITY
      Because of the dissimilar nature of electroplating shops,
 it is practically impossible  to generalize  about  the  industry.
 Several studies have been conducted which provide a broad  view
 of profit ranges and general  profit trends  for  the industry.

      (a)   Robert Morris
      	Annual Study
      Exhibit IV-3 presents balance  sheet, income  statement, and
 operating ratio data for  SIC  3471.  Whereas  it  is not  possible
 to isolate the  electroplating portion of these  data,  it can be
 used  as a guide.

      The  following table  summarizes the  profit  data in Exhibit
 IV-3.
                          Table  IV-2
Year
1971
1970
1969
Under $250M
2.970
.6
4.4
Asset Size
$250M to
l.OOOM
2.3%
4.1
2.3
$1,OOOM to
10,OOOM
2.5%
4.5
5.4
All
Sizes
2.7%
4.0
4.9
      (b)  National Association
          of Metal Finishers
     	1970 Cost Survey
     The 1970 operating cost survey conducted by the National
Association of Finishers (NAMF) indicated an average pretax
profit of 4%%.  The details of this study are shown in Exhibit
IV-4.  It appears that the very small and the very large firms

-------
                                                     IV - 4

are  less profitable than those firms with sales in the mid-ranges,
The  exception appears to be hard chrome platers where the very
small shop is the least profitable, and the larger shop the most
profitable.

     It is noteworthy, however, that no specific pattern is
established with regard to profitability according to the type
of metal finishing done or by type of operation.  Assuming that
profitability does not necessarily increase with specialization,
a plating shop manager confronted with the alternative of elim-
inating a small plating operation in order to reduce the pollu-
tion control requirement, might in fact not realize increased
profits as a result of specialization.  Since many small shops
attempt to maintain diverse product lines to satisfy customer
requirements, it would seem unreasonable to reduce the number
of product lines in view of the fact that profits would not
necessarily increase.  Consequently, the small shop owner  would
probably maintain the present product lines and be confronted
with costs for treating multiple effluent streams as opposed to
greater specialization and fewer waste streams.
     (c)  Kearney Industry
     	Survey	
     The results of a more recent study conducted by the con-
tractor indicates that the profit position of the Electroplating
Industry has improved considerably as compared to the 1970 sur-
vey.  Sixteen of the 30 respondents indicated their own 1972
pre-tax profit, or what they believed the industry pre-tax

-------
                                                      IV - 5

 profit was.   Nine stated this figure was between 5%-1070.   The
 other seven  respondents were essentially evenly divided between
 having losses and making a profit of 1070-2070.

      Because random selection techniques were  not used to survey
 the  industry in any of the three studies, and  the sample  sizes
 are  small, some inaccuracies are expected as the data are used
 in the impact analyses.

      (d)  Overall Industry
      	Profitability
      The  profitability of electroplaters is directly  related  to
 the  general  economic conditions  of  entire U.S.  industry.   Toward
 the  end of 1971 and continuing into 1972 the general  profitabil-
 ity  of electroplaters  improved as evidenced by  the results  of
 the  A. T. Kearney survey.  This  profit improvement is  similar
 to the general  turnaround  of the economy during  the end of  1971
and  in 1972.
     A  NAMF  operating cost  study for 1972 which  is not yet
available for publication also indicates  some profit margin im-
provements have occurred since the  1970  study.

     A pre-tax  profitability of 5.970 has been calculated  for
the  industry and adjusted to 1972 levels.  This is based  on
findings of the three studies mentioned  above.   While each study
indicated wide profitability ranges, some firms being highly
profitable,  other firms within the industry having experienced
significant losses, the 5.9% is considered a reasonable repre-
sentation.

-------
                                                     IV - 6



PROFIT MARGIN
  CONSTRAINTS

     A major factor affecting profitability in many shops is

the level of production obtained.  Although the quality of the

plating, and the ability of the shop to meet customer delivery

requirements and specifications are important considerations,

the demand for electroplating is not a function of industry

promotion or sales efforts.  The Electroplating Industry is

highly dependent on other primary industries such as electronics,

automotive and housewares.   In recent years as the economy has

had an upswing, many shops  began operating at near fxill capa-

city.


     An important consideration in assessing the economic impact

of pollution abatement is the extent to which shops remaining in

the industry will be able to absorb high demands created by shops

leaving the industry.


     Industry sources indicated that closures could affect capa-

city.  Shops remaining in the industry could absorb some of the

plating work by extending the working hours of the shop.  This

alternative could, in fact  also increase profitability as greater

utilization is made up of existing fixed assets.  However, in-

dustry sources further indicate that a labor shortage exists,

particularly within -the metropolitan areas where a large major-

ity of the shops are located.  The environment of the electro-

plating shop is not conducive to attracting a large number of

employees.  Consequently, rather than to operate two shifts,

-------
                                                     IV - 7

many shops extend shifts to nine to ten hours per day, and oper-
ate on a six-day basis.

     In addition to  labor constraints, it should be noted that
shops located within metropolitan areas generally have limited
expansion space and are, therefore, restricted as to physical
plant size expansion at the same location.  This element was
emphasized in interviews with shop owners.  Extended operating
hours can create additional storage problems, particularly where
products are bulky or where shipments cannot be done during the
off-hours.

VALUE OF
  ASSETS
     As has been indicated earlier, the plating industry and
electroplating in particular is characterized by relatively low
capital investment in the form of plating tanks, material hand-
ling and solution handling equipment, and buildings.

     Exhibit IV-1 presents the capital expenditures for the years
1958 through 1970.  A study published by the University of Michigan
in 1967 on the metal finishing industry presented the following
capital investment data:
                         Table IV-3
                         Average Capital Investment per Firm
Type of Operation  •     N.A.M.F. Members'       Total Industry
Chrome Platers          $224,700                  $47,700
General Platers          300,010                   63,100

-------
                                                      IV  -  8






 Once  purchased and  installed, the market value  of  the equip-


 ment  used  in  electroplating decreases rapidly.  One respondent


 in  the Kearney survey  indicated, and others  supported his  state-


 ment, that  the market  value of used equipment is worth about


 15%-20%  of  the purchase price after only two years of opera-


 tion.  The  corrosive materials used in electroplating are  very


 hard  on  the tanks and  other equipment.




      Little can be  assumed about the capitalization of firms


 in  the industry.  For  example, a highly mechanized firm  can


 have  a capital to sales ratio of over 80% while the manual shop


would be somewhere  around 10%-2570.  In the Kearney study the


 overall average for 20 firms reporting sales and capitalization


 equalled 44%.  In another industry study the ratio approached


 83%.  Obviously the two studies would require isolating  the


 factors which cause the wide variation in the results.   It is


believed that cost of building and/or land which is included in


 the data and the degree of automation and type of product.line are


contributing factors.  It would be necessary to identify all of


the factors in order to understand the capitalization  require-


ments for electroplating shops.




COST STRUCTURE



     Information on%the cost structure of the Electroplating


Industry is included in the "Price Effects" section of this


report.




FINANCING ADDITIONAL

  CAPITAL REQUIREMENT
                                 (

     In general,  companies in the Electroplating Industry

-------
                                                     IV  -  9

 experience  some  difficulty  in  obtaining  financing  for both
 productive  and nonproductive assets.  Companies often have to
 pledge  assets of value  equal to  or  greater  than the amount of
 the  loan.   Since most companies  are small with low capital in-
 vestment, the asset  security is  a problem.

     Exhibit IV-5  summarizes interviews with 5 banks in  the
 Chicago area.  While all  the banks  did not  have specific exper-
 ience with  the electroplating  industry,  this was not deemed a
 criteria for obtaining  financing.   The important consideration
 is the  ability to  service the  debt  and the  personal reputation
 of the  business  owners.

 ALTERNATIVE METHOD
  OF FINANCING
     Several methods of financing present capital  requirements
 have been used by  the industry.
          1.  SEA  Loans are typically available and used by some
 of the  small platers.  Although a viable source for small  busi-
 ness, these loans  require a considerable amount of detailed in-
 formation for qualification.
          2.  Public Financing - Most of the companies in  the
 industry are either closely held corporations or partnerships.
There are few public corporations.  For this reason, the normal
method  of outside  financing is by bank loan.  Very little  fi-
nancing is done by issuance of stock.
          3.  Private Sources - Since many of the companies are
 owned and operated as a family business, another source of fi-
nancing is the family itself.  The private resources of the

-------
                                                     IV - 10

family are drawn upon when necessary.
          4.  Government Assistance.- A source of financing
which is available but is not often used is government assisted
financing.  Several people interviewed in the A. T. Kearney
industry survey expressed a desire for some form of government
assisted financing of pollution control equipment.

     Some sections of the country have more difficulty in ob-
taining financing than other sections because of the general
economy of the area.  Electroplaters on the west coast, who ljdo
a lot of work in the aerospace industry, for example, expressed
their particular problems because of their geographic location
and the economic condition of their main source of business.

     Captive platers, especially those which are a part of a
large company, find financing easier.  They can rely on the
credit rating and reputation of the total company.  Many times
the company is a public corporation which can obtain funding by
means of a stock issue.
     In recent years, Industrial Revenue Bonds have been used
to finance pollution abatement equipment.   The value of bonds
issued has increased from $85 million in 1971 to an estimated
$1 billion in 1972.   These bonds generally carry a rate of 6%.
Due to the high cost of issuing these bonds, the minimum value
issued is usually in excess of one-half million dollars.
Presently, only the very largest of the electroplating shops  would
be able to avail themselves of this type of financing.  This
type of financing presently will not assist the small independent
shops to finance pollution abatement equipment.

-------
                               ENVIRONMENTAL PROTECTION  AGENCY



                                    ELECTROPLATING  INDUSTRY



                            GENERAL INDUSTRY FINANCIAL STATIST1CS
                  3471    PLATIhG t POLISHING



                  MJHBER Of ESTABLISHMENTS! 1967)1 3,241   80CK VALUE Of ASSETS PER EMPLOYEE 119681:     15,937

                  SPECIALIZATION RATIO (1967): NAI COVERAGE RATIO (1967):NAt CONCENTRATION RATIO (1967): 4 LARGE 5< 8 LARGE  91
ALL EMPLOYEES

YkAR
1958
•1959
I960
1961
1962
1963
1964
1965
1956
1967
1968
19S9
IV70
t CHANGE
1)69-70
AVb.RATE
1958-70




YEAk
1V58
1959
1940
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
< CHiNtC
U69-70
tvt,. RATE
19M-70
NUMBER
1000)
36.
43.
44.
43.
49.
45.
45.
48.
51.
55.
59.
62.
57.

-8.7

3.8
RATIO
OF VALUE
AOOEO TO
SHIPMENTS

.707
.722
.725
.721
.731
.715
.707
.705
.708
.727
.720
.72)
.718.

-0.1

0.1
PAYROLL
IIMIL.I
156.3
189.5
2CO.O
iOO.S
2)1.5
223.5
239.1
261.9
29S.2
323.2
363.8
399.7
372.5

-6.8

7.5
RATIO OF
INVENTORIES
TO
SH[PNt>TS

.065
.047
.C44
.044
.038
.043
.044
.C41
.046
.047
.053
.053
.053

1.5

-1.7
PRODUCTION WORKERS
NUMBER
(000)
30.
37.
1*.
37.
41.
17.
37.
40. .
4).
46.
45 .
51.
46.

-10.4

3.6
RATIO OF
PAYROLL
ro
VALUE »DDED

.616
. 582
.59
.60
.57
.60
.60
.5*
.59
.562
.566
.541
.3)7

-0.8

-I.I
HAN-HOURS
IHIL.I
59. I
72.0
72.6
71.
80.
74.
75.
83.
91.
92.5
97.6
101.2
93.4

-7.7

3.9
VALUE OF
SHIPMENTS
PER PROO.
W01KER
( iOOOt
11.8
12.1
12.2
12.4
13.2
13.7
14.8
15.6
16.6
16.9
18.1
19.7
20.1

5.7

4.9
WAGES
((MIL.)
117.7
142.3
161.5
161.3
182.0
169.6
177.5
193.7
219.5
239.1
270.6
294.4
270.0

-8.3

7.2
HANHOURS
PER
PRODUCT ICH
WORKER
1000)
1.9)8
1.9)5
1.906
1.S30
1.9)3
1.984
2.000
2.057
2.106
1.976
1.976
1.954
2.01)

1.0

«.)
VALUE
AODEO
ItMIL. 1
253. 8
325.8
337.0
3)0.9
01.2
70.2
95.4
44.6
09.9
74.8
42.6
738.4
693.6

-6.1

8.7
WAGE PER
PRODUCT ION
WORKER
PANHOUR
111
1.992
1,976
2.225
2.25)
2.264
2.267
2.348
Z.325
2.402
2.585
2.77)
2.909
2.891

-0.4

3.2
COST OF
MATERIALS
OHIL.I
(06. t
127.3
128.3
128,3
147.9
148.3
165.8
173.2
199,5
218.1
251.9
282.4
275.0

-2.6

8.)
VALUE AOOED
PER
PRO. WORKER
M4NHOUR
It)
.29
.52
.64
• 62
.99
.95
.23
.34
.58
.21
.58
7,30
7.4)

1.8

4.7
VALUE OF
SHIPMENTS
(SMIL.)
359.1
451.3
465.1
458.7
549.1
517.6
559.6
630.9
719.8
791.1
892.5
1,020.7
966.6

-5.)

8.6

INDEX
OF
EMPLOYMENT
(1967-1001
66.24
78.58
60.22
79.67
89.29
81.67
82.40
87.11
92.74
100. 00
107.44
114.16
104.17

-8.7

3.8
CAPITAL
EXPENDITURES
(toll. I
15.9
15.2
19.1
16. 2»
25.5
20.0
24.1«
26.8
40.2
33.1
45.0
47.0»
58. l»

23.6

11.4

INDEX
OF
VALUE ADDED
(1967-1001
44.15
56.68
58.63
57.57
69.80
64.41
68.79
77.33
88.71
100.00
111.80
128.46
120.67

-6.1

8.7
END-CF-YEAR
INVENTORIES
OMIL.)
23.5
21.3
20.5
20.4
20.9
22.1
24.4
26.1
33.3
36.9
47.7
53.8
51.7

-3.9

6.8

INDEX
Cf
SHIPMENTS
(1967-100)
45.39.
57.05
58.79
57.98
69.41
65.43
70.74
79.75
90.99
100.00
112.81
129.02
122.11

-5.3

8.4
                                                                                                          5s
                                                                                                          03

                                                                                                          OQ
                                                                                                          (D
Source:   Annual Survey of Manufacturers  - 1970.   U.S.  Department of Commerce,
                                                                                                          o
                                                                                                          HI
                                                                                                            <
                                                                                                             I

-------
                          ENVIRONMENTAL  PROTECTION AGENCY
                              ELECTROPLATING INDUSTRY
                       GENERAL  INDUSTRY  FINANCIAL STATISTICS
Year;  1967

Item
f

3471 — PLATING AND POLISHING
ESTABLISHMENTS »ITH AN AVERAGE OF-





Eslablish-
ments

(number)

I 237
579


9
All employees
Number

(1,000)

2.3
8.1


3.4
Payroll

(million
dollars)

12.0
47.3


19.4
PfOdtciion workers
Number

(1.000)

2.2
6.8



Man-hours

(Billions)

3.8
13.4


5.5
laps

(million
dollars)

9.8
35.6


43.5

added by
manutac-

(million
dollars)

26.8
81.2


38.5

Cost of
materials

(•illion
dollars)

6.9
27.8

*
12.6

Value of
shipments

(million
dollars)

35.7
109.0


50.7

Capital
eipendi-
bires,
new
(million
dollars)

.5
4.0


3*2

E*d*f-
inven-
tories
(•Him
dollars)


4.1


2.4
Source:  Census  of Manufacturers-1967
OQ
  CO
tOH
O
HUH
rN>

-------
                            ENVIRONMENTAL PROTECTION AGENCY

                                    INDUSTRY SALES
Etnp loyment
  Range
   1-  4
   5-  9
  10- 19
  20- 49
  50- 99

 100-249
 250-499

     Totals
  Total
Employees
  2,300
  3,800
  8,100
 18,900
 11,400

  7,200
  3,400

 55,100
  Number of
Establishments
    1,237
      S?0
      5/9
      620
      171

       54
        9

    3,240
   Average
Employees per
Establishment
       2
       7
      14
      30
      67

     133
     378
Sources:  Census of Manufacturing, 1967,
          A. T. Kearney.
Value of
Shipments
 Dollar
 Million
 $35.7
   55.1
  109.0
  264.0
  164.8

  111.9
   50.7

 $791.1
Average
 Sales
 (?000)
$
   28.9
   96.7
  188.3
  425.7
  963.8

2,072.1
5,633.1

  244.1
                                                                                              s
                                                                                              H
                                                                                              to

-------
                                ENVIRONMENTAL PROTECTION AGENCY
                                    'ELECTROPLATING INDUSTRY
                            FINANCIAL  STATEMENTS  AND OPERATING RATIOS
SIC 3471:
ASSET SIZE
NUMBER Of STATEMENTS
ASSETS
Cain
Marketab'e Securiliet
Receivables Net
Inventory Not
All O'her Current
Total Current
Fixed Assets Nel
At! Otner Non Current
Total
LIABILITIES
Due To flanks— Short Ttrm
Due To Trade
Income Takes
All Other Current
Total Current Debt
Non Current Debt Unlub
ratal Uniuborg.nated Debt
Subordinated Debt
Tangib'e Net Wort*
Total
INCOME DAT*
Net Satcl
Coil Of Sain
GrGII Profit
Atl 0:fce- Eipenie Ntt
fro'rt Before Tern
RATIOS
Quick
Current
Find/Worth
Debt/Wen*
Uneub Debt/Cepital FetMje
Salee/ltocetvtbiol
Coil Selel/lnventorv
Sitel/Werking Ctpul
SeleiAVonh
* *Mn let Tun/Wont,
» Oe«H M Taioi/Tol Anm
•tt §«*e»
Tejul Ata«tl
41 STATEMENTS
ENDED Oil OR ABOUT JUNE 30. 1971
59 STATEMENTS
ENDED ON OR ABOUT DECEMBER 31. in
rikinte »""M & *n"' * IIPMM ft
•»»» ""«»*" "Km" "," iiU" ' ASSEI SIZE
M 41 24 1" M'MTI nt STATEMENTS
* * * % ASSETS
IS 79 19 '- Caih
(It 1,1 MartxabieSeciinlioi
309 114 138 ?i 7 Receivable! Net
111 91 21 8 13 5 Inventory Nel
11 13 S3 3« All Othfjr Current
ill 389 !«< 918 Total Current
40 5 <98 388 421 Fired Asset! Net
67 112 50 58 All Other Non Current
1000 1000 1000 1000 Totil
LIABILITIES
10} 41 <7 <3 Due To Bank, -Short Term
14 5 110 '<• 132 Due To Trade
28 13 18 14 Income Ta>ef
123 94 59 «e All Cine' Current
453 301 291 2)1 Total Current Debt
62 21 6 11 Subo-d *ated Debt
325 444 J79 519 Tanjit'e '.el Worth
1000 1000 1000 10CO To'al
INCOME DATA
1000 1000 1000 1000 NetSalel
635 740 62 > 7,8 Coil 01 Selei
365 260 171 20, Oroil Prol.t
335 237 150 IM All Other Eipenie Nil
26 23 25 27 rrotit Before Ta.el
RATIOS
15 14 14 It
1111 9 Quick
478 6
21 17 22 2t
13 14 16 IS' Current
6614 9
674 6
1010 6 6 Fried/Worth
75 21 10 25
753 6
16 12 6 11 Debt/Worth
136 28 13 32
753 6
12 10 6 10 Unaub Debt/Clprtal Funds
76 26 13 29
17 132 39 93 36 101 35 104 ,
39 > 3 4« 7 5 47 7 7 46 7 8 Salei/Reconibloa
66 6 4 69 9 1 61 6 9 M 6 4
14 264 15 235 H 10 5 16 22 1
M 11 9 It 129 41 60 34 106 Colt Sitei/lnventory
715141736456 62 56
95 166 105 122
52 76 11 66 Sllei Working Clpital
• 100 553 4] ill
71 47 45 59
32 32 32 38 SatetWonh
31 24 24 15
(11 251 232 27 1
98 95 63 66 % Profit 8ef Tenet/Worth
0 22 22 7
171 104 119 130
69 30 47 1 1 » Piofil Bel Teiel/Tol Aieeu
•22 31 14 6
4110I2M 435S45M I125007M I1SVJ--4 NetSalel
4JXM4 11212M 65I31O llXjtCe) Total Aiieti
42 STATEMENTS
ENDED ON Od ABOUT JUNE 90. 1970
66 STATEMENTS
ENJEO ON OR ABOUT DECEMBER 31. 1970
uuncp IISOM 1 I1MM* I10MM4 ...
""?" tISStH.r, USStM.tl IESS™«« S*;'(LS
I2SW I1MM I10MM IISMM 5h"S
!6 41 30 108
81 94 53 68
4174 B
171 227 257 244
127 121 220 11 4
11 35 19 20
464 194 552 554
394 409 394 382
113 97 53 64
1000 1000 1000 1000
97 4» 66 62
116 ll« 132 124
26 32 27 26
91 90 51 59
360 31 1 314 30 1
120 144 1)0 120
46 1 455 424 42 1
52 14 35 16
467 532 541 551
1000 1000 1000 1000
1000 1000 1000 1000'
515 74S 773 760
415 25 5 217 ' 140
408 114 161 200
8 41 45 40
17 17 14 16
12 11 10 11
617 6
22 22 25 23
16 19 17 It
11 10 13 11
t 5 4 6
167 6
i : 11 11 12
664 t
1010 6 9
17 14 13 16
S 5 4 t
(86 6
II 14 12 13
30 12 t 32 11 3 36 101 32 1 1 4
a 9 S 43 t 3 49 7 3 4167
46 7 J 52 S 9 M « 2 53 6 B
It 24 C 10 36 1 34 105 14 25 1
27 13 J 31 11 6 «7 76 13 106
II 65 46 75 71 51 61 59
14 (i 116 109 130
84 (6 14 70
I 69 1 46 31
7! 66 4« 59
43 37 34 37
jr 26 15 26
212 111 278 129
tf 152 139 133
lit 42 39 II
106 111 119 113
30 19 76 49
• 111 13 26 6
1 IIJOI.M M1033M l1«1S7eM 4213732*
, M6 M 21202M J3SJ5M 1102571V
ASSET SIZE
KUMIER OF STATEMENTS
ASSETS
Cash
Markelab e Securities
Receivables Set
All Other Current
Total Current
Fi»ed Assets Net
All Other Non Current
Total
LIABILITIES
Out To Banks — Short Term
Due To Trade
Income Takes
AH Other Current
Total Current Debt
Non Current Debt linsub
Total Unsubordinated Debt
Subordinate!] Debt
Tangible Net Worth
Total
IKCOME DATA
Net Sales
Cost 01 Sales
Gross Profit
All Gtnti Expense tiei
Profit Before Tales
IATIOS
Quick
Current
Fned/Worth
Debt/Worth
Unsub Debt/Capital Funds
Sales/Receivables
Cost Sales/Inventory
Sales/Woikm[ Capital
Sales^rVorth
\ Prolrt Bel Taies/Worlti
•. Profjl Bet Taies/Tol Assets
Nel Sales
Total Asseli
40 STATf I.'ENTS
ENDED ON OR ABOUT JUNE 10. ltd
(0 STATEMENTS
ENDED ON OR AIOUT DECEMBEI 11. 1M
llunrn SHOW i Slwub I10MM 1 .
iJOllI IIBSTMN ItSITHIN USS !«!« *ij.
S750M |)MM HCVM USMM S1'IS
31 37 30 100
X
104 76 46 69
013 6
319 2i6 292 273
125 160 195 110
10 9 21 19
559 SO 4 557 S7E
355 413 365 354
17 83 78 70
1000 1000 1000 1000
96 69 47 49
135 165 125 149
27 30 43 36
126 105 57 • 62
421 413 295 31 B
125 173 110 119
60 30 17 33
393 365 S76 S3 1
1000 1000 1000 1000
1000 1000 1000 100.0
668 756 755 712
332 242 245 211
2! 9 21 s :;; 17»
44 23 54 49
11 14 14 18
11 9 10 10
661 7
2! 20 23 22
14 13 17 15
10 8 14 10
365 S
5 9 6 7
17 15 10 11
5 5 e s
189 1
38 19 16 16
333 3
444 1
1410 1 B
IS 103 36 100 40 19 36 100
44 1243 8 3 49 73 41 7 B
13 6 8 56 6 4 (4 56 56 64
14 266 16 198 25 143 IS 234
16 138 32 11 3 46 79 35 10 3
U 6 0 43 6 3 61 52 59 61
156 136 115 137
65 67 BO II
50 77 50 13
110 52 46 II
55 39 36 41
31 27 27 21
266 239 305 112
ItO 161 212 1M
39 77 103 J4
179 95 1(2 111
105 79 114 II
31 22 51 41
SI205III 13990IM II371S1M UM141M
4610M II964M 71206M I1UMH
                                                                                                    M
                                    Coprrrght 197) Roejeri Uejertt A l
                                                                   CopfiiiM 1970 Robrtl Horns Assocxlel
     Source:   The Robert Morris Annual Statement  Studies.

-------
                                                          EXHIBIT IV-4
                ENVIRONMENTAL PROTECTION AGENCY

                  SUMMARY OF PROFITABILITY OF
               INDEPENDENT ELECTROPLATING SHOPS
 Type of Operation By Sales  Dollars

 Automatic  General Metal Finishing

   $   250-$  499
      500-    749
    1,000-  1,999
  >2,000

 Manual  General Metal Finishing

   $<100,000
      100-$  249
      250-    499
      500-    749
    1,000-  1,999

 Automatic  Barrel  Plating

   $   250-$  499
      500-    749
    1,000-  1,999

 Manual  Barrel  Plating

   $   100-$  749
    1,000-  1,999

 Hand Chrome  Plating
                           Profitability Percentage
                        Average     High       Low
   $   100-$
      250-
  >1,000
249
749
                           ,97%
                          3.39
                          4,56
                         •10.40
                          1.30
                          3.38
                          1.42
                          2.22
                           .15
                         -2.02
                          4.76
                          4.8
                          5.25
                          4.00
-1.14
 3.28
 5.71
            4.00%
            5.85
           14.4
            4.0
           11.20
           10.6
            5.98
            6.20
            3.80
            5.48
           11.64
            5.0
            6.80
            5.50
12.50
 9.53
22.40
          -5.80%
           1.20
          -1.32
         -24.40
         -16.21
         -12.00
          -8.90
          -4.42
          -9,00
         -11.44
          -1.10
           4.8
           3.70
           2.50
-30,00
 -4.91
 -4.89
Source:  National Association of Metal Finishers -
         1970 Survey.

-------
            V - POLLUTION CONTROL REQUIREMENTS


     Effluent limitations proposed by the Environmental Protection

Agency (EPA) were developed on the basis of "best practicable

control technology currently available" and best practicable

control technology economically achievable."  In this report,

best practicable technology (BPT) is referred to as Level I and

best available technology (BAT) is referred to as Level II.  These

limitations and the cost of attaining them are discussed in

this section.


PROPOSED EFFLUENT
  LIMITATIONS

     Guidelines for the Electroplating Industry are proposed at

three levels to cover all industry segments.  Plants discharging

effluents to navigable waters and those disposing waste waters

to municipal sewer systems will all be affected by the proposed

guidelines.  However, the extent of control to be exercised by

the different segments of the industry remains somewhat unclear.


     In this report, plants discharging effluents to navigable

waters are referred to as rural plants and plants disposing of

waste waters to municipal sewer systems are referred to as

urban plants.


     (a)  Pretreatment
     	Standards

     Pretreatment standards, which are not defined by EPA, are

currently considered the responsibility of the local municipal

-------
                                                       V - 2
systems handling plant effluents.  Authorities responsible for
establishing local effluent limitations recognize the need to
reflect federal limitations in their standards, but are not
certain of what effects the proposed EPA Level I and Level II
limitations will have on the local systems.

     (b)  Level I Effluent
         Limits
    Proposed Level I limitations based on "best control
technology currently available," reflects use of chemical
destruction technology.  The application of the standard is
based upon the "average weight of waste water constituent per
unit of production."  Three equivalent units of production are
proposed as follows:
         1.  Plated Area.  Unit of production as defined by
Faraday's Law of Electrolysis  using the ampere hours for
plating, the average thickness of deposit and typical cathodic
current efficiencies.
         2.  Coulombic Equivalent.  Unit of production as
defined by the volume of waste discharged per unit of time per
unit of current capacity installed are used for the minimum
plate thickness and typical current efficiencies.
         3.  BPCTCA Effluent Equivalent.  Unit of production
based on use of Best Practicable Control Technology Currently
Available (BPCTCA) to conserve water usage and the reduction
of effluents discharged at the recommended water usage rate.

-------
                                                        V - 3
    (c)  Level II
    	Effluent Limits

    The proposed Level II effluent limits,  based on "best

available technology economically achievable," requires

recovery, treatment and reuse of process waters to effect zero

discharge of pollutants.


     (d)  New  Source
    	Performance Standards

    New  sources  in the Electroplating Industry, defined as

electroplating plant construction begun after publication of

proposed regulations, are required to adhere to Level II effluent

limits and achieve zero discharge of pollutants.


    Although  pretreatment standards are directed to existing

plants discharging to municipal sewer systems, new sources

discharging to municipal systems are required to meet Level II

standards.
EFFLUENT LIMITATIONS
  USED FOR THIS STUDY
     In order to evaluate the economic impact of pollution

abatement  requirements on the Electroplating Industry, it was

necessary  to establish effluent limitations on the model plant

groups.  In conjunction with the Environmental Protection

Agency, two alternates were established for levels of treatment

for  rural  and urban plants.

-------
                                                        V - 4
     (a)  Alternate A -
     	Effluent Limitations

     The following levels of treatment were established for

Alternate A.

                        TABLE V-l

       Level I and Level II - Rural and Urban Plants

Group
A
B
C
D
E
Le ve 1 I
Rural Urban
Level I Pretreatment
Level I Pretreatment
Level I Pretreatment
Level I Pretreatment
Level I Pretreatment
Level II
Rural
Level II
Level II
Level II
Level II
Level II
     Pretreatement standards are based on local regulations  and

are not a requirement of the federal guidelines (see Section V, pg.l)


     (b)  Alternate B -
     	Effluent Limitations

     The following levels of treatment were established

for Alternate B.

                         TABLE V-2
Level
Group
A
B
C
D
E
I and Level
Level
Rural
Level I
Level I
Level I
Level I
Level I
II - Rural and
I
Urban
Level I
Level I
Level I
Level I
Level I
Urban Plants
Level II
Rural
Level II
Level II
Level II
Level II
Level II
     The required costs for each Level and Plant Group are

discussed later in this section.

-------
                                                         V - 5
INDUSTRY SEGMENTATIONS
  AND EFFLUENT LIMITATIONS

     In establishing standards of performance and assessing the

capability to meet "best control technology current available,"

electroplating shops were segmented according to production

capacity in terms of installed rectifier capacity in amperes.

Five plant sizes were established as follows:


                        TABLE V - 3

             Rectifier Capacity by Size of Shop


          Size                  Rectifier Capacity in Amperes

        Very large               >      20,000

        Large                      50,000 - 20,000

        Medium                     10,000 - -50,000

        Small                       1,000 - 10,000

        Very small               ^      1,000



     Although pollutants can be related to production in terms

of amount of plating, and this factor related to rectifier

capacity, industry data is not published in this manner.

Consequently,  segmentation of the industry is not possible by

productive capacity.

-------
                                                       V  - 6
     As previously discussed in Section I, available information

on the electroplating shops provide a means of segmenting shops

according to employment.  However, as shown on Exhibit V-l,

some relationship does exist between the installed rectifier

capacity and the employment within shops.  With some exception,

very small shops would tend to have smaller capacitites.  The

correlations however, would never approach perfection.  For

example, a highly automatic shop could have a high rectifier

capacity and thus be classified large, yet have low employment

because of the degree of automation.


    Since effluent limitations are proposed applicable to all

segments without regard to capacity, the economic analysis

covered in this report does not consider plants on basis of

size of installed capacity.  However, because the relationship

between employment and capacity exists, segmentation by these

criteria is not deemed necessary.



WATER POLLUTION
 ABATEMENT COSTS

     The costs for capital equipment to meet the proposed

effluent guidelines were developed from information supplied by

the Environmental Protection Agency.   These investment costs

were developed for the EPA by another contractor,  Battelle

Memorial Institute.

-------
                                                        V - 7
     (a)  Level I
     	Investment Costs

     Exhibit V-2 shows the investment costs for Alternate A

Level I pollution abatement equipment for rural and urban plants.

These costs are based upon the model plant parameters defined in

Section IV.  This exhibit indicates that Level I pollution abate-

ment equipment investment costs range from a minimum of $50,000

for small plants, Group A 1 to 4 personnel, to $562,000 for

large Plants, Group E 50 to 99 personnel in the rural plants.

For urban plants the costs range from $25,000 to $281,000.


     Exhibit V-3 shows the investment costs for Alternate B

Level I pollution abatement equipment for rural and urban

plants, and indicate that the investment costs for this alternate

are the same as for rural plants in Alternate A.


     In the following table the investment costs for rural and

urban plants to meet Level I Alternat A and B are summarized:

                        TABLE V-4

           Summary of Level I Investment Costs

                    Alternate A              Alternate B
Plant Group       RuralUrban         Rural and Urban

    A          $ 50,000    $ 25,000          $ 50,000
    B            58,800      29,400            58,800
    C           117,600      58,800           117,600
    D           252,000     126,000           252,000
    E           562,000     281,000           562,000

-------
                                                        V - 8
     Exhibit V-4 shows the annual amortization costs for
Alternate A Level I pollution abatement equipment for both
rural and urban plants.  Exhibit V-5 shows the annual amortization
costs for Alternate B Level I pollution abatement equipment.
These amortization costs are based on the assumption of a pay
back period of five yeras and a cost of capital of ten percent.

     Exhibit V-6 shows Alternate A Level I investment costs for
pollution abatement equipment for rural and urban plantss as a
percentage of annual sales.  Exhibit V-7 shows the same infor-
mation for Alternate B.  As can be seem from these exhibits,
due to the minimum investment costs for Level I in both
Alternates A and B, the investment costs as a percent of annual
sales for the very small plant, Group A 1 to 4 personnel, is
very high.
     For rural and urban plants in Alternate A, the  investment
costs as a percent of  sales are 62 percent and for rural plants
124 percent.  In Alternate B, the investment costs as a percent
of sales for Group A  is also  12470.
     In Alternate A rural  plants and Alternate B both rural and
urban plants, the  investment  costs as a percent of sales range
from 40  to 45 percent.  However,  in Alternate A urban plants,
due  to  the lower  investment  costs, the range  is from 21  to
22 percent.

-------
                                                        V - 9
     In the following table the investment costs as a percent



of annual sales for Alternates A and B for Level I are summarized



                        TABLE V-5
Plant
A
B
C
D
E
(b)
Summary of Level
as a Percent
I Investment
of Annual Sa
Alternate A
Group Rural Urban
124 . 17«
43.0
44.7
42.4
41.8
Level II
Investment Costs
62.070
21.5
22.4
21.2
20.9

Costs
les
Alternate
B
Rural and Urban
124.17.
43.0
44.7
42.4
41.8







     Exhibit V-8 shows the capital investment costs to meet



Level II pollution abatement equipment requirements for both



Alternate A and B.  This exhibit shows that for Level II invest-



ment costs range from approximately $20,000 for Groups A and B



to $289,000 for Group E.





     Exhibit V-9 shows the annual amortization costs for



Level II.  These amortization costs are again based on a five



year pay-back period and a cost of capital of ten percent.

-------
                                                       EXHIBIT V-l
                 ENVIRONMENTAL PROTECTION AGENCY
                   Number of Plants by Employment
                      and Rectifier Capacity
Size of Plant
by Number
of  Employees

     1 - 10

    11 - 20

    21 - 50

    Under 50

Number
of Plants
Rectifier Capacity
Very Small
1
-
-
_
Small
1,000 to
10,000
7
7
1
.
Medium
10,000 to
50,000
2
6
10
5
Large
50,000
20,000
-
1
3
7
Very
tO:
200
-
1
-
1
Large
,000




    Source:  Battelle Memorial Institute
             Environmental Protection Agency

-------
                                                              EXHIBIT V - 2
Plant
Group

  A

  B

  C

  D

  E
                     ENVIRONMENTAL PROTECTION AGENCY

                               Alternate A
Investment Costs for Level I
Pollution Abatement Equipment
Rural and Urban Plants
Employment
Range
1-4
5-9
10 - 19
20 - 49
50 - 99
Average Number of
Employees Per Group
2
7
14
30
67
Investment
Rural
$ 50,000
58,800
117,600
252,000
562,000
Costs
Urban
$ 25,000
29,400
58,800
126,000
281,000
        Assumptions;

            Plating - 60 sq. ft./hour/employee

            Water Usage - 2.5 gallons/sq.ft. plated

            Investment Cost - $56,000/1,000 gallons/hour - Minimum
                                Cost $50,000 for rural plants.

                            - $28,000/1,000 gallons/hour - Minimum
                                Cost $25,000 for urban plants.

        Source:  Environmental Protection Agency

        Formula:

            Investment Cost = 60 sq. ft./hour/employee x 2.5 gallons/

            sq.  ft. x $56,000 or $28,000/1,000 gallons/hour x Number

            of Employees

-------
                                                      EXHIBIT V - 3
             ENVIRONMENTAL PROTECTION AGENCY

                        Alternate B
               Investment Costs for Level I
              Pollution Abatement Equipment

                  Rural and Urban Plants
Plant
Group
A
B
C
D
E
Employment
Range
1
5
10
20
50
- 4
- 9
- 19
- 49
- 99
Average Number of Investment
Employees Per Group Costs
2
7
14
30
67
$ 50,000
58,800
117,600
252,000
562,000
Assumptions;

    Plating - 60 sq. ft./hour/employee

    Water Usage - 2.5 gallons/sq. ft. plated

    Investment Cost - $56,000/1,000 gallons/hour - Minimum
                        Cost of $50,000

    Source:  Environmental Protection Agency


Formula ;

    Investment Cost = 60 sq. ft./hour/employee x 2.5 gallons/

    sq. ft. x $56,000/1,000 gallons/hour x Number of Employees

-------
                                               EXHIBIT V - 4
Group
A
B
C
D
E
Assumptions
ENVIRONMENTAL PROTECTION AGENCY
Alternate A
Annual Amortization Costs
of Investments for Level I
Urban Rural
Costs Costs
Investment Amortization Investment
$ 25,000 $ 6,595 $ 50,000
29,400 7,650 58,800
58,800 15,511 117,600
126,000 33,238 252,000
281,000 74,127 562,000
.

Amortization
$ 13,190
15,300
31,023
66,477
148,254

Cost of Capital - 10%
Payback Period - 5 years

-------
                                               EXHIBIT V - 5
      ENVIRONMENTAL PROTECTION AGENCY
Group
A
B
C
D
E
Assumptions
Alternate B
Annual Amortization Costs
of Investments for Level I
Rural and Urban Plants

Investment
$ 50,000
58,800
117,600
252,000
562,000
*
Costs
Amortization
$ 13,190
15,300
31,023
66,477
148,254

Cost of Capital - 10%



Payback Period - 5 years

-------
                                                    EXHIBIT V - 6
ENVIRONMENTAL PROTECTION AGENCY
Alternate A
Level I Investment Costs as
a Percent of Annual Sales
for Rural and Urban Plants
Plant
Group ,
A
B
C
D
E
Average
.$ .000
40.
135.
263.
594.
1,345.
Sales
3
0
0
0
5

Per
$ 50
58
117
252
562

Plant
,000
,800
,600
,000
,000
Rural
Investment
(1) % of
124
43
44
42
41

Sales
.1%
.0
.7
.4
.8




Per Plant
$ 25
29
58
126
281
,000
,400
,800
,000
,000
Urban
Investment
(1) % of
62
21
22
21
20


Sales
.0
.5
.4
.2
.9
7
10




(1)   From Exhibit V-2

-------
                                               EXHIBIT V - 7
          ENVIRONMENTAL PROTECTION AGENCY

                   Alternate  B

            Level  I  Investment Costs as
             a  Percent  of Annual  Sales
            for Rural and Urban Plants
Plant
Group
A
B
C
D
E
Average Sales
$ .000
40.
135.
263.
594.
1,345.
3
0
0
0
5
Investment
Per Plant (1)
$ 50,
58,
117,
252,
562,
000
000
600
000
000
% of
124
43
44
42
41
Sales
.1
.0
.7
.4
.8
7
/o




(1)   From Exhibit  V-3

-------
ENVIRONMENTAL PROTECTION AGENCY
Investment Costs for Level
Abatement Equipment
Average Number of Number of
Group Employees Per Group Gallons/Hour
A
B
C
D
E
2
7
14
30
67
300
1,050
2,100
4,500
10,050

II Pollution
Investment Cost

Evaporative
Reverse Osmosis Recovery Total
-
-
$ 48,000
96,000
205,000
$ 20,000
20,000
25,000 73,000
37,500 133,500
83,800 288,800





Assumptions :
Reverse Osmosis Costs based on - minimum
for 275 gallon/hour shop and $125,000
$8,000 for
gallon/hour
Evaporative Recovery Costs based on - minimum of $25
Evaporative Recovery Unit handles 1070 of gallons

- For Groups A
and B assume $20,
000 cost for
125 gallon/hour shop - $14,000
shop
,000 for 300 gallons -
per hour of reverse osmosis.
water conservation methods.
Source: Environmental Protection Agency













X
PC
M
w
i-3
CO

-------
                                          EXHIBIT  V  - 9
    ENVIRONMENTAL PROTECTION AGENCY
 Annual Amortization Cost   of Investments
for Level II Pollution Abatement  Equipment
Plant
Group
A
B
C
D
E
Costs
Investment
$ 20,000
20,000
73,000
133,500
288,800

Amortization
$ 5,280
5,280
19,260
35,224
76,200

-------
                    VI - PRICE EFFECTS


     In order to determine the potential changes in prices

attributable to the cost of pollution equipment and its main-

tenance, it is necessary to examine the various methods of

costing used in both job and captive shops.  In addition, the

economics of various alternatives facing the purchasers of

plating services will be examined.  By combining the costing

methods in supplying plating services along with the demand

for such services, a viable direction of cost influence may

be identified.


BACKGROUND

     Because of the relatively low capitalization of firms in

the plating industry, there is the tendency to price according

to the most significant variable cost components.  In some cases,

this is not possible because of the competitive environment in

which certain services are required.  Firms competing in such

areas as zinc plating of nuts and bolts find the margin signi-

ficantly less than in some of the specialized areas of finishing

for electronic components and other high quality plating.


PRICING IN
 JOB SHOPS

     There are basically three methods used in the pricing of

services in the plating job shops:

          1.  Labor based costing is the most frequently used

method in determining the price of services.  Deriving multiples

of labor costs for the different sections of plating services

-------
                                                      VI - 2





and then aggregating them is used predominantly in the labor



intensive job shops.  For instance, in Exhibit VI-1, it is



noted that the direct labor of an average firm (which is a



member of the NAMF) is about 28% of the sales dollar.  This



company would price its jobs at appropriately 3.6 times the



direct variable labor rate of: the different people used in the



plating process,  This multiple of labor will vary with the Lypr



of service that is required.



          2.  Equipment based pricing is used in automatic



plating and the plating of hard chrome.  In these cases, the



equipment is a significant portion of the cost expenditures.



Since there is a high investment in automatic equipment, the  time



per  equipment hour is charged in addition to that of the labor



used in preparation of this equipment and the parts to be plated.



When plating with hard chrome, jobs remain in the plating tankfs



for extended lengths of time  (sometimes days) and the costs are



based on the use of the tanks for the time the parts are in the



tanks and the labor time of preparation of the parts.



          3.  Square inches of surface plated is the least used



method of pricing plating services.  This method is used primarily



in the pricing of plating precious metals.  Plating of gold,



silver, platinum, and other precious metals are frequently



evaluated on the basis of square inches plated.  Again, the price



of the plated part is based on the most significant cost



variable factor.

-------
                                                     VI - 3





     According to industry averages, a pre-tax profit on sales



of about 5.9% is traditionally sought, and its derivation is



presented in Exhibit VI-1.  However, a more relevant measure



of financial achievement is the return on invested capital



sought by the various firms in the industry.  As a rough guide



approximately 83% of annual sales is the amount of invested



capital in the firms represented by the National Association of



Metal Finishers study which is presented in Exhibit VI-2.  If



this figure is true for the industry as a whole, an overall



pre-tax return on investment of approximately 7.0% is desired



(Exhibit VI-3).  As the amount of capital investment increases,



prices would increase proportionately.  Increased capital invest-



ment of 507> would require price increases of 507, in order to



maintain the same level of return on investment.  Accordingly,



for a firm capitalized at $300,000, the expenditure of $100,000



for capital equipment to abate pollution would require prices



to be increased by 307,.  If the money were borrowed from a bank



rather than invested by the owners, prices would have to be



increased to cover interest as well as a return on investment



criteria.  However, there is reluctance among the banking



community to lend money for the purpose of investing in non-



productive assets.  The question then becomes is it a good



investment in the various pollution equipment for the total



service  lines of a plating company or should only pollution



abatement be sought for plating of selected service lines which



are more profitable and could justify a return investment through



higher prices?

-------
                                                      VI - 4


COSTING IN
 CAPTIVE SHOPS

     The cost of plating in a captive shop is traditionally

lower than that of a job shop.  The reason for this is the

economies of scale in operating a manufacturing concern with a

plating department.  The captive plating department does not

have to justify the entire capital expenditure of land, equip-

ment, supervision, and any other factors which have to be com-

pletely covered by the job shop.  Frequently a captive shop

has a very low level of production and is sometimes manned

using part-time personnel.  Also, the captive plating department

is usually not a profit center for the firm but rather an

adjunct to a manufacturing line.


     There has been a trend in recent years to eliminate the

captive shop because of the cost of the required pollution

equipment which often cannot be justified from the corporate

standpoint on a strict investment basis.  However, firms

with extensive captive shops and high dependence upon them

will and have made these commitments.


     Because of the trend away from captive shops, there is

becoming a greater dependency upon the job shop plater.

-------
                                                       VI - 5


OTHER FACTORS
 OF CONSIDERATION

     It has been previously mentioned that the price of plating

services is a function of the significant variable cost.  As

the cost of capital goes up, prices also will have to increase.

However, of even greater significance than the cost aspect of

plating is what will happen to competition in the plating

industry with the advent of increased pollution controls.

Currently there is a double standard in most areas of pollution

requirements, i.e., existing facilities operate under one kind

of restriction  while new facilities are required to operate

under another.  This has had the effect of restricting entrance

into the industry because of the higher capital investment

required to begin a plating business.  In addition, many firms

are unwilling to make the capital investment and thus are

electing to leave the industry.  The exact quantity of firms

leaving the industry and the absence of re-entry is not known

at this time.


     There will be a substitution effect when prices of plating

services are increased.  Other types of plating will be sought;

for example, changing from nickel and chrome plating to a more

economical but less desirable process of plating.  Other types of

finishes will be sought such as painting or galvanizing.  In

addition, new materials which do not require plating may also

be used (such as the case of stainless steel).

-------
                                                       VI - 6
     Many plating firms are eliminating plating services that
are highly polluting.   Lead and cadmium plating have been re-
duced or eliminated in numerous  job plating shops as well as
captive facilities.

     Aside from the effects of restricted competition, the
higher cost of operations would potentially yield significantly
higher costs for plating, in some cases upwards of 50% to 10070.
However, such increases may not be tolerated by the customers
of plating services and other finishes or materials may be
substituted in place of plating.  At this point the substi-
tution effect is an indeterminate factor.  Knowledge of the
supply and demand curves for each plating service, and plated
product is necessary to determine what the substitution effect
would be.

-------
                                                        VI - 7
MODEL PLANT
  PARAMETERS

     In order to assess the price effects of pollution abate-

ment on electroplating job shops, a model plant approach has

been used.  Five plant configurations were developed based

on size and sales parameters found to be reasonably correlated

in several industry studies.


     Exhibit VI-4 describes the model plants and the parameters

used to differentiate between plants.  These factors are also

used to segment the industry in the impact analysis.


     Profit margins which were previously determined were

applied for each segment of the industry to the model plant

sizes as shown in Exhibit VI-5.


     This exhibit also details the average sales and the number

of plants according to U.S. census of manufacturing statistics

for 1967.  The sales reported in the census records were ad-

justed to reflect price levels in 1972.   Average pretax profits

for each segment were derived from an industry survey which

was described in Section IV, page 3.


PROFIT COMMITMENT
  FOR POLLUTION CONTROL

     In order to meet the cost of capital investment in control

equipment, firms will either maintain current prices and pay

for equipment from existing profits or raise prices to offset

the added costs.  The decision will be based on many factors

-------
                                                       VI - 8
including competition, customer reaction, and level of present

profitability.


     (a)  Maintaining
     	Present Prices

     The ability to maintain present prices depends on the

ability and willingness of firms to commit future profits to

pollution abatement equipment.  It is a general rule in the

industry that investments are made for plating equipment if

the investment represents approximately 1.5 years profits.


     While this decision rule is used for normal production

equipment which is expected to provide increased profits, it

is probably not applicable to pollution abatement equipment.

The decision to provide additional production equipment does

not normally affect the actual survival of the business.  How-

ever, the decision to install or not install pollution abate-

ment equipment may affect the survival of the business.  Con-

sequently, it is reasonable to assume that the industry's

investment in pollution abatement equipment will represent a

greater number of years of profits.  This period has been es-

timated to be about five years.


     Exhibit VI-6 shows the number of years of profits which

would have to be committed by firms in each of the plant size

segments given no price increases for the industry for Level I

Alternates A and B.

-------
                                                    VI - 9

     The years are based on the cost of the pollution control
equipment at the relevant plant size and the average profit
on sales for those plants.  At a cost of capital of approxi-
mately 107o per annum which has not been included, the time
periods would be somewhat longer.

     Based on the above, a large number of the model plants
would exercise the option to close rather than sacrifice
profits.  Should this occur, the industry supply would be
reduced by the amount of sales these plants generate and
employment would also be affected to the same degree.

     It is difficult to determine the direct effects of this
supply reduction on pricing since there is an insufficient
knowledge of the demand function.  However, it is safe to
assume any or several of the following will occur.
             Substitution of other coating for electroplating
             Absorption by captive shops
             Absorption by remaining job shops
             Price increases

     It is not practical to assume the zero price increase
and high resultant enclosures.  These shops would,  in fact,
increase prices to meet the cost of pollution control
equipment at a rate that would maintain their present

-------
                                                       VI - 10
profitability or some level below present profits before elect-

ing to go out of business.  The amount of these increases would

depend on the market, decision of the owner and other variable

factors.


     Since perfect information is not available in the market

place and electroplating products and services are so immensely

different it is expected that some number of the prospective

firms could increase prices without suffering major competitive

disadvantages.


     (b)  Price Increases To Meet
     	Capital Equipment Requirements

     The following price increases will be required to offset

the capital equipment costs for firms which are willing to

commit to five years payoff for the equipment and maintain the

current profit margins.



                       TABLE VI-1

          Price Increases - Level I and Level II

                 Alternate A          Alternate B
    Level       RuralUrban      RuralUrban

    Level I     16.5      8.3         16.5      16.5

    Level II     8.4       --          8.4

-------
                                                        VI - 11









     The amount of increases has been based on financing at



a cost of capital of 10 percent.  The five year period is based



on the loan period which several banks, contacted during the



study, indicated is typical for equipment purchases.





     In estimating the overall price increases expected for



the industry, the implicit assumption is that highly  profitable



firms and those with low profits would offset each other on



the whole.  This is not the absolute effect since cost of



control equipment differs at the five firm sizes and  profit-



ability also varies by size.





     Exhibit VI-7 and Exhibit VI-8 have been prepared to indicate



the extent of the increases for firms in each model plant size



group for Alterantes A and B.  The exhibit breaks down the



increases for Level I and Level II.  Exhibits VI-9, VI-10,



VI-11 and VI-12 show the calculations used to arrive  at the



estimated increases.





      The implied price changes required at the different plant



 size  configurations is important  to understand.   The very small



 plants,  one to  four people,  appear to be confronted  with very large



 price increases approximately two to three times the larger plants.



 If this  occurs,  it  can be expected that some competitive advan-



 tage  will exist for the larger plants which could have a long-



 term  negative  effect on the viability of the very small shops.

-------
                                                        VI - 12



     (c)  Increases for
     	Operating Cost

     Very few plants in the industry are presently meeting the

pretreatment limitations and practically none are meeting

Level I and Level II standards expected to be applied in 1977

and 1983.  For these reasons, operating costs for pollution

abatement equipment have not been compiled on an industry-wide

basis.   Some plants are, however, meeting local standards and

do have cost data for their operations.


     For the purposes of this study, the annual operating costs

for Level I and Level II pollution abatement equipment are

based upon information furnished by the Environmental Protection

Agency.  These operating costs are summarized in Exhibits VI-13,

and VI-14.  These exhibits show that for Level I, annual

operating costs range from approximately $1,600 for the small

plant,  1 to 4 personnel, to $53,300 for the large plant, 50

to 99 personnel for Alternate A rural plants and Alternate B.

For Alternate A urban plants the operating costs are approximately

one-half of rural plants for the same size plants.  For Level II

annual  operating costs range from approximately $800 to $27,700

for the same size plants.


     As previously mentioned, some plants in Kearney's survey

have compiled data for operating costs of pretreatment equipment.

An average cost of 1.7 percent of annual sales has been found to

be required for these annual operating costs.  If we are to assume

-------
                                                      VI - 13

that annual operating costs of Level I abatement equipment are
approximately twice that of pretreatment equipment,  a reasonable
correlation is found between calculated and experienced costs.
This comparison is shown in the following table.

                         Table VI-2
 Plant
 Group
   C
   D
   E
Comparison of Survey and Calculated
Annual Operating Costs
Average Sales
Dollars Per Group
40.3
135.0
263.0
594.0
1,345.5
Operating Costs
& 1.7% of Sales
$ 685
2,295
4,470
10,100
22,875
Operating Costs
@ 50% of Level I
$ 795
2,790
5,565
11,925
26,635






-------
                                                     EXHIBIT VI-1
              ENVIRONMENTAL PROTECTION AGENCY
                INCOME STATEMENT PROFILE
                                        (1)
            Cost Elements

Production Expense

     Labor - Direct
     Labor - Indirect
     Materials
     Rent
     Utilities
     Repair and Maintenance
     Delivery Expense
     Other Production Expense

          Total Production Expense

Sales Expense

     Salaries
     Other Sales Expense

          Total Sales Expense

General and Administrative Expense

     Owner/Officer's Salary
     Office Salary
     Office General and Administrative

          Total General

Total Expenses

Profit Before Taxes

Profit After Taxes
                            Percent
                            of Sales
                              27.7
                               4.7
                              16.4
                               2.6
                               5.2
                               2.8
                               2.0
                               9.0

                              70.4
                               1.8
                               1.8
                               3.6



                               9.4
                               3.3
                               7.3

                              20.0

                              94.1

                               5.9

                               3.0
Notes:  (1)  Source:
National Association of Metal Finishers
Cost Survey 1970, adjusted to reflect
plating firms only.

-------
                                              EXHIBIT VI-2
         ENVIRONMENTAL PROTECTION AGENCY
        ESTIMATED CAPITALIZATION OF METAL
                FINISHING FIRMS (1)
                                    Capitalization
Type of Metal Finishing            NAMF    Industry

Precious metals                  217,000    46,100
Buffing and polishing            141,300    28,800
Chrome                           224,700    47,700
General platters                 300,000    63,100
Average capitalization at
                             (2)
chrome and general platters^' 262,350    55,400
Average yearly sales of NAMF
  members(3)                     317,000
Capitalization as a percent
  of sales (4)                    83%
Notes:  (1)  Based on 1966 University of Michigan Study

        (2)  Derived as follows:   (224,700 -I- 300,000)/2 =
                                          262,350

        (3)  Derived from University of Michigan Study:
                18% industry members at NAMF
                77% of industry sales from NAMF
                Gross industry billings of $200,000,000
                2700 firms in industry
             (200,000,000 x 77%)7(18% x 2700) = $317,000

        (4)  Derived by dividing average capitalization
                by average sales.

-------
                                                    EXHIBIT VI-3
              ENVIRONMENTAL PROTECTION AGENCY

                  ELECTROPLATING INDUSTRY

            ESTIMATED RETURN ON INVESTMENT OF
            	METAL FINISHING FIRMS	



       Element                              Measure

Index of Average  Yearly Sales (3)           100.00

Index of Capitalization (1)                   83.00

Margin on Sales (pre tax)  (2)                  5.9%

Return on Capitalization (3)                   7.170
Notes:   (1)  See Exhibit V-2

         (2)  See Exhibit V-l

         (3)  Derived by dividing pre  tax profit
             margin by capitalization:  5.9/83.00 = 7.1%

-------
                                                EXHIBIT VI-4


,__(
> — ^
l^ CD
O/ &C
4J CO
CO CO
rs D

'-v O O O O O
EC o in o o m
P-I m o I-H m o
O -
^ rH CN v± O
rH



CO 4J
dj ^i c
rH CU CU
cO PM g
CO ,£
CO CO
0> M -rl
M CO rH
CO rH 43
OJ O 4J
> Q CO
< U




en o o o m
• • • • •
o in co -j- in
 W Ol -r-l
*2 Q Cb P'M-H
w ac o -Q
CO rH CO
SH CXW
^ G w
> w w
<3








CN t~- >
0 O
43 r-4
Ja
6
w

ON ON ON ••
*3" ON i— 1 N^- ON to
C
1 1 1 1 1 O
•H
rH in o o o 4-1
rH CN m CX
E
3
CO
CO
<



































^
o
c
Oi
M
^*
flj
CD C
^"•t O
O -rl
rH 4-J
CX O

£ • 4-1
-^ 4J O
&-i M ^ }H
3 ex.
0 •
43 CTrH
^^- CO CO
'' 	 4J
4-1 CO C
IW C 01
o e
CTrH O
co co )H
60-r-l
O >
vo in c
• w
1 CN

M 1 ••
C 01
•H ^l O
4J 0) ^
CO 4J 3
rH CO O
(X, [2 C/D
CU
C
X
^
4J
IW

.
cr
CO
CO
c
o
rH
rH
CO
W)

in
.
CM
'<

CU
CU
o

(X
j

s7

b

*^
t
4.J
U-l

.
CT1
CO

o
vO

II

/"\

PM
O •
— ' CO
Qj
CU CU

CO O
CO rH
£:> ex
»-i £
cu
4.J MH
CO O
pc

II

cO
i-H
ni
a
o

rH 4J
13
O
PQ   O

-------
                                                      EXHIBIT VI-5
ENVIRONMENTAL PROTECTION AGENCY
Model
Plant
Code

A
B
C
D
E
AVERAGE PRE-TAX
Average
Sales Per
Establishment(l)
(? Thousand)
40.3
135.0
263.0
594.0
1,345.5
PROFIT OF MODEL PLANTS
Number of
Establishments

1,237
570
579
620
171
3^,177
Average (2)
Pre-Tax
Profit
(Percent)
9.0%
6.5
4.9
7.2
4.2
5.9
Notes:   (1) Average sales derived from
             U.S.  Census of Manufacturing Data
             and adjusted to reflect 1972 price levels

         (2) Based on Kearney study of industry.
Sources:  National Association of Metal Finishers
          Census o£ Manufacturing
          A.  T.  Kearney, Inc.

-------
EXHIBIT VI-6
ENVIRONMENTAL PROTECTION AGENCY
YEARS OF PROFIT COMMITMENT
WITH NO PRICE INCREASE
LEVEL I
Plant Size
A
B
C
D
E
Weighted Average
Alternate
Rural
13.8%
6.7
9.1
5.9
9.9
7.2%
A
Urban
6.9%
3.4
4.6
2.9
5.0
3.6%
Alternate B
Rural and Urban
13.8%
6.7
9.1
5.9
9.9
7.2%

-------
                                                   EXHIBIT VI-7
Plant Code





   A



   B



   C



   D



   E
ENVIRONMENTAL PROTECTION AGENCY
Alternate A
ESTIMATED PRICE INCREASES
FOR TREATMENT LEVELS
Level I
Rural Urban
36.7% 18.4%
15.5 7.8
16.0 8.0
15.2 7.6
15.0 7.5
.ge 16 .5% 8 . 3%
Level II
Rural
15 . 2%
6.1
9.5
8.0
7.7
8.4%

-------
EXHIBIT VI-8
ENVIRONMENTAL PROTECTION AGENCY
Plant
Code
A
B
C
D
E
Weighted
Alternate B
ESTIMATED PRICE INCREASES
FOR TREATMENT LEVELS
Level I
Rural and Urban
36 . 7%
15.5
16.0
15.2
15.0
Average 16.5%
Level
Rura
15.
6.
9.
8.
7.
8.
II
1
2%
1
5
0
7
4%

-------
                                            ENVIRONMENTAL  PROTECTION AGENCY

                                                      ALTERNATE A

                                       POTENTIAL  COST INCREASE FOR URBAN PLANTS
                                            FOR LEVEL I POLLUTION ABATEMENT
                  Number
Plant  Number of    of
Code   Employees  Plants
                                Annual
                           Amortization Costs
                                             Annual
                                        Operating Costs
  A

  B

  C

  D

  E

Total
 1-4

 5-9

10-19

20-49

50-99
952

439

446

477

132
                            Per
                           Plant
                          $ 6,595

                            7,650

                           15,512

                           33,238

                           74,127
             Per
All Plants  Plant
All Plants
~I$~.000)

$   756.8

  1,221.5

  2,482.0

  5,688.2

  3.515.2
                                                                          Per
                                                                         Plant
                                                                    Sales ($ .000)
                                                                        All Plants
  Total
  Annual
	Costs	
~T?  .000)

$ 7,035.2  $   40.3  $ 38,365.6

  4,579.9     135.0    59,265.0

              262.9

              594.3

            1,345.5
                                    9,400.1

                                   21,542.7

                                   13,300.0

                                  $55.857.9
 117,253.4

 283,481.1

 177.606.0

$675.97LJ.
                Cost Increase
                 as Percent
                  of Sales
18.3%

 7.7

 8.0

 7.6

 7.5

 8.3
                                                                                                                        X
                                                                                                                        X
                                                                                                                        CO
                                                                                                                        I— I
                                                                                                                        H

-------
                                            ENVIRONMENTAL PROTECTION AGENCY

                                                      ALTERNATE B

                                       POTENTIAL COST INCREASE FOR URBAN PLANTS
                                            FOR LEVEL I POLLUTION ABATEMENT
Plant
Code
  A

  B

  C

  D

  E

Total
Number of
Employees
   5-9

  10-19

  20-49

  50-99
             Annual
Number  Amortization Costs
  of
         Per
Plants  Plant
                             Per
	   All Plants   Plant
                 ($ .000)

 952  $ 13,190  $12,556.9   $ 1,590

 439    15,300    6,716.7     5,565
                                                       Annual
                                                  Operating Costs
  446

  477

  132
         31,023   13,836.3   11,130

         66,477   31,709.5   23,850

        148,254   19,569.5   53,265

                 $84.388.9
             Total
             Annual
All Plants   Costs
            ($ .000)
                                                                              Sales ($ .000)
                       Per
                      Plant
                                                                      All Plants
($ .000)

$ 1,513.7 $ 14,070.6 $   40.3  $ 38,365.6

  2,443.0    9,159.7    135.0    59,265.0

  4,964.0   18,800.3

 11,376.5   43,086.0

  7,031.0   26.600.5  1,345.5

$27.328.2 $111.717.1
                                                              262.9    117,253.4

                                                              594.3    283,481.1

                                                                      177.606.0

                                                                     $675.971.1
Cost Increase
 as Percent
  of Sales
                                                  36.7%

                                                  15.5

                                                  16.0

                                                  15.2

                                                  15.0

                                                  16.5
                                                                                                                          n
                                                                                                                          x
                                                                                                                          t-i
                                                                                                                          co
                                                                                                                          i— i
                                                                                                                          H
                                                                                                                          I
                                                                                                                          5

-------
ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A AND B
POTENTIAL COST INCREASE FOR RURAL PLANTS
FOR LEVEL I POLLUTION ABATEMENT
Plant
Code

A
B
C
D
E
Total
Number of
Employees
1-4
5-9
10-19
20-49
50-99
Number
of
Plants

285
131
133
143
39
131
Annual
Amortization Costs
Per
Plant

$ 13,190
15,300
31,023
66,477
148,254
All Plants
($ .000)
$ 3,759.2
2,004.3
4,126.1
9,506.2
5,781.9
$25.177.7
Annual
Operating Costs
Per
Plant

$ 1,590
5,565
11,130
23,850
53,265
All Plants
($ .000)
$ 453.2
729.0
1,480.3
3,410.6
2,077.3
$8.150.4
Total
Annual
Costs
($ .000)
$ 4,212.4
2,733.3
5,606.4
12,916.8
7,859.2
$33.328.1
Sales ($
Per
Plant

$ 40.3
135.0
262.9
594.3
1,345.5
All

$ U
17
34
84
52
$101
.000)
Plants

,485.5
,685.0
,965.7
,984.9
,474.5
.595.6
Cost Increase
as Percent
of Sales

36.77o
15.5
16.0
15.2
15.0
16.5
                                                                         w
                                                                         X
                                                                         w
                                                                         M
                                                                         H

-------
                                               ENVIRONMENTAL PROTECTION AGENCY
Plant
Code
  A
  B
  C
  D
  E
Total
Number of
Employees
   1-4
   5-9
  10-19
  20-49
  50-99
Number
  of
Plants
  285
  131
  133
  143
  _39
  731
ALTERNATE A AND B
POTENTIAL COST INCREASE FOR RURAL PLANTS
FOR LEVEL II POLLUTION ABATEMENT
Annual
Amortization Costs
Per
Plant All Plants

$ 5,280
5,280
19,260
35,244
76,200
($ .000)
$ 1,504.8
691.7
2,561.8
5,037.0
2.971.8
$12.767.1
Annual
Operating Costs
Per
Plant

$ 825
2,895
5,790
12,405
27,705
All Plants
($ .000)
$ 235.1
379.2
770.1
1,773.9
1.080.5
$4.238.8
Total
Annual
Costs
($ .000)
$ 1,739.9
1,070.9
3,331.9
6,810.9
4.052.3
$17.005.9
Sales C$ .000)
Per
Plant

$ 40.3
135.0
262.9
594.3
1,345.5
All Plants
$ 11,485.5
17,685.0
34,965.7
84,986.0
52.476.5
$201._595_._6_
Cost Increase
 as Percent
  of Sales
   15.27.
    6.1
    9.5
    8.0
    7.7
    8.4%
                                                                                                                                 03
                                                                                                                                 1—I
                                                                                                                                 H

-------
ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A
ANNUAL OPERATING COSTS FOR LEVEL I
Employment Average Number of
Group Range Employees Per Group
A 1-4 2
B 5-9 7
C 10-19 14
D 20-49 30
E 50-99 67
Assumptions ;
& B
POLLUTION ABATEMENT EQUIPMENT
Alternate A Alternate B
Rural Urban Rural and Urban
$ 1,590 $ 795 $ 1,590
5,565 2,790 5,565
11,130 5,565 11,130
23,850 11,925 23,850
53,265 26,635 53,265

Plating - 60 sq. ft . /hour/employee
Operating Cost - $5.30/1000 sq. ft. plated
Annual Hours - 2500 hours/year/employee
Alternate A Urban assumed to be one half of rural costs
Source: Environmental Protection Agency
Formula:
Annual Operating Costs = 60 sq. f t . /hour/empl
of employees x 2500 hours/yr . /empl.
. x $5.30/1000 sq. ft. x number
                                                                 M
                                                                 X
                                                                 X
                                                                 M
                                                                 w

-------
                                                EXHIBIT VI-14
              ENVIRONMENTAL PROTECTION AGENCY

                    Alternates  A & B

                 ANNUAL OPERATING COSTS FOR
           LEVEL II POLLUTION ABATEMENT EQUIPMENT
          Employment      Average Number of         Annual
                                                 Operating Costs

                                                    $   825

                                                      2,895

                                                      5,790

                                                     12,405

                                                     27,705
Group
A
B
C
D
E
Range Employees Per Group
1 -
5 -
10
20
50
4
9
- 19
- 49
- 99
2
7
14
30
67
Assumptions;
     $0.0474 per man-hour for reverse osmosis
     $0.1180 per man-hour for evaporator
     2500 man-hours per year per employee
     Source:  Environmental Protection Agency
Formula:
     Operating Costs = ($0.0474 + 0.1180) X 2500 man-hours/yr,
      X number of employees.

-------
                    VII - IMPACT ANALYSIS





     The impact analysis for closings and employment effects



 is based on how the effluent limitation standards are to be



 applied and the costs of the pollution abatement equipment to



 meet the effluent limitation standards.  The effluent limitation



 standards used in this analysis are those discussed in Section V.



 They are:






     (a)  Alternate A



          1.  Plants, Model groups A through E, located in



 urban areas:  i.e., plants discharging to municipal sewer



 systems, will be required to meet pretreatment standards in 1977.



 Pretreatment standards (Section V, Page 1) are based on local



 regulations and are not a requirement of the federal guidelines.




          2.  Plants, Model groups A through E, located in



 rural areas: i.e., plants discharging to streams will be



 required to meet Level I standards in 1977.



          3.  Plants, Model groups A and B located in rural



 areas will be required to meet modified (water conservation)



 Level II standards in 1983.



          4.  Plants, Model groups C, D and E located in rural



 areas will be required to meet Level II standards in 1983.





     (b)  Alternate B




          1.  Plants, Model groups A through E, located in urban



areas:   i.e.,  plants discharging to municipal sewer systems will



 be required to meet Level I in 1977.

-------
                                                       VII - 2










          2.  Plants, Model groups A through E located in rural



areas:  i.e., plants discharging to streams will be required to




meet Level I standards in 1977.



          3.  Plants, Model groups A and B located in rural



areas will be required to meet modified (water conservation)




Level II standards in 1983.



          4.  Plants, Model groups C, D and E, located in



rural areas will be  required to meet Level II standards  in  1983.





      Based  on  census data  and  other  studies,  77  percent;  of the



 plants  are  located  in urban areas  where municipal sewer  plants



 handle  the  waste water.  The  other 23  percent of the  plants



 are located in rural areas where  discharge of effluents  is



 direct  to  streams  or to  storm sewers discharging to  streams.







      Implicit  in  the assumption for  all plants  discharging to



 municipal  systems  is that  pretreatment  standards will be



 sufficient  in  all  areas.   This,  of course,  may  not apply in



 small municipalities where the waste treatement  plants cannot



 accept  industrial  wastes without  severe disruption to the



 system.   In these  cases  the estimated  closures  in the following



 analysis may be higher.

-------
                                                         VII - 3
 ESTIMATED
   PLANT CLOSINGS

      (a)  Zero Price
      	Increases

      It is assumed that the industry will adjust prices upward

 to meet the cost of pollution control.  Consequently there will

 probably be few closures resulting from failure or inability to

 raise prices.


      (b)  Prices Increased to
           Meet Cost of Equipment -
           Level I - 1977
      As previously discussed in Section V, the price increases

 required by model plant groups for Alternate A and B for urban

 and rural plants for 1977 are shown in the following table:


                        TABLE  VII-1
Price Increases - Level

7
1C,





Alternate
Rural
Increase %
36.7%
15.5
16.0
15.2
15.0
A
Urban
Increase
18.4%
7.8
8.0
7.6
7.5
I - 1977
Alternate B
Rural and Urban
7, Increase
36 . 7%
15.5
16.0
15.2
15.0
Plant
Code

A

B

C

D

E

Weighted
  Average  16.570           8.3%             16.57o

-------
                                                       VII - 4
     Since electroplating products and services are so



immensely different, and each size plant meets certain needs



of the market place and the amount of substitution to other



methods or processes is limited, it is expected that the



majority of firms could raise prices without suffering major



competitive disadvantages.   The exception being the very small



plants, Group A 1 to 4 personnel,  where the required price



increase is over twice the  average industry price increase.







     In order to analyze the impact of pollution abatement



equipment on the Electroplating Industry, an attempt was made



to relate price increases,  profits and the standard deviation



of profit assuming a normal distribution, to a closure rate.







However, due to the relatively small sample size and deviation



inherent in the data, it was determined that this method did



not provide the necessary accuracy.





     It is expected that the greatest effect on plant: closures



rather than price increases or profits, will be the inability



of the very small plants to raise  the necessary capital to



purchase the pollution abatement equipment.  There are firms



today that are unprofitable, lack  capital and will have difficulty



remaining as a viable firm.  These types of firms under normal



circumstances probably will not remain in business and pollution



control will not cause  these failures.

-------
                                                        VII - 5
     There are,  however,  firms  that are  today making a profit,

although  below the group  average, will be able  to raise prices

to a limited extent  but will  not be able to raise the

necessary capital to  finance  the pollution abatement equipment

These  firms, we  believe,  will be impacted by the water

pollution controls.


     Based upon  previously discussed profits, price increases,

the A. T. Kearney survey  and discussions with our consultants,

and members of the Electroplating Industry, it  is expected

that the closure rates for the  effluent  limitations previously

mentioned for 1977, would be as shown in the following table:
Model Plant
Group	

   A

   B

   C

   D

   E
                       TABLE VII-2

                  Potential Closure Rate

                           1977

                    Alternate A
Alternate B
Percent
Rural
50%
25
10
3
3
Closures
Urban
25 %
12.5
5
1.5
1.5
Percent
Closures
Rura 1 and Urban
50%
25
10
3
3






-------
                                                       VII - 6









     Exhivit VII-1 shows the potential number of plants



expected to be closed in the urban areas for Alternate A.   This



exhibit shows of the 2,446 urban plants that 13.2 percent, or



324, are potential closures.





     Exhibit VII-2 shows the potential number of plants expected



to be closed in the urban areas for Alternate B.   This exhibit



shows of the 2,446 urban plants that 26.5 percent, or  649, are



potential closures.





     Exhibit VII-3 shows the potential number of plants expected



to be closed in the rural areas for both Alterantes A  and  B.



In the rural area, 26.4 percent or 193 of a total of 731 are



classified as potential closures.





     Exhibit VII-4 shows the total potential plant closures,



both urban and rural for Alternate A.   This is summarized  in the



following table.



                       TABLE VII-3
Alternate A
Summary of Total Potential Plant Closures
Plant
Code
A
B
C
D
E
Total
1977
Total Number
of Plants
1,237
570
579
620
171
3,177
Potential
Number
380
88
35
11
3
TTT
Closures
Percent
30.7%
15.4
6.0
1.8
1.8
16 . 3%

-------
                                                         VII - 7
     Exhibit VII-5 shows the total potential plant closures,



both urban and rural for Alternate B.  This is summarized in



the following table:



                       TABLE VII-4
Summary
Plant
Code
A
B
C
D
E
Total
Alternate
of Total Potent
1977
Total Number
Of Plants
1,237
570
579
620
171
3,177

B
Tal Plant
Closures
Potential Closures
Number
618
143
58
18
5
842

Percent
50 . 0%
25.0
10.0
3.0
3.0
26 . 5%
     It is important to emphasize the non-financial decision



and other mitigating circumstances are certainly expected to



occur that should prevent some closings.   However,  it is not



possible to determine what each of these  circumstances are.



Rather, it is important that the order of magnitude  be



emphasized as opposed to the preciseness  of the actual numbers.





     It should be noted that of the 542 total potential plant



closures for Alternate A, or 862 total potential plant closures



for Alternate B,  324 in both Alternates are estimated to be  the

-------
                                                       VII - 8


resultant of pretreatment standards which are considered to be
the responsibility of the local municipal systems handling
plant effluents, and not the Environmental Protection Agency
Guidelines.  It is understood that not all municipalities will
have the same regulations.  However, for purposes of this
analysis, effluent standards were assumed to be equal for all
areas and municipalities.

     (c)  Prices Increased to
          Meet Cost of Level II - 1983
     As discussed in Section. V, the price increases required
by the model plant groups for rural plants for 1983 are as
follows:

                        TABLE VII-5
              Price Increases - Rural Plants-1983

          Plant                         Percent
          Code                          Increase
           A                             15.0 %
           B                              6.0
           C                              9.5
           D                              8.0
           E                              7.7
   Weighted Average                       8.4 70

-------
                                                       VII - 9
     As was  noted  in  the discussion of price increases for
 Level  1-1977,  the  very small plants again will require a price
 increase approximately twice that of the industry average.

     In assessing  the economic impact of Level II pollution
 abatement requirements on the rural plants, it is believed that
 those  remaining after Level I will probably be the more
 efficiently  run plants and that in the majority they will,
 because of their locations, be able to get the necessary price
 increases to meet  the cost of Level II equipment costs.

     Therefore, the potential percent closure rate for the
 rural  plants in 1983 will be as shown below:

                       TABLE VII-6
Plant
Code
A
B
C
D
E
Potential Closure Rate
1983-Rural
Percent
Closures
10 %
5
2
2
2
     Based on these closure rates the potential plant
closures are 25 or 4.6% of the remaining 538 plants (Exhibit
VII-6) in the rural area  for  both Alternates A  and  B.

-------
                                                      VII  -  10
     (d)  Summary of Plant
          Closures - 1977 and 1983

     Exhibit VII-7 summarizes the total number  of  potential

plant closures as a result of Level I and  Level II pollution

abatement for both urban and rural plants  for Alternate A.

This exhibit shows potential closures of 542 of 3,177  plants  or

17.1 percent.  The potential closures are  the greatest in  the

very small plants, estimated to be 31.9 percent of the total

1,237 plants, and decrease to 2.3 percent  of the large plants.


     The table below summarizes the estimated plant closures

as a result of Level I and Level II for the urban  and  rural

plants .

                       TABLE VII-7

                        Alternate A
                  Summary of Plant Closures
                       1977-1983	

                  1977               1983	        Total
Area
Urban
Rural
Total
Number
324
193
517
Percent
13 . 2%
26.4
16 . 3%
Number
-
25
25
Percent
-
4 . 67,
4 . 67,
Number
324
218
542
Percent
13.27o
29.8
17 . IT.
     Exhibit VII-8 summarizes the total number of potential

plant closures as a result of Level I and Level II pollution

abatement for Alternate B, rural and urban plants.  This exhibit

indicates potential closures of 27.3 percent or 867 out of the

3,177 plants.

-------
                                                        VII - 11
     The  following  table summarizes the estimated plant

closures  for Alternate B.

                       TABLE VII-8

                       Alternate B

                 Summary of Plant Closures
                 	1977-1983	

               1977                1983               Total
Area
Urban
Rural
Total
Number
649
193
842
Percent
26 . 57o
26.4
26 . 57o
Number
-
25
25
Percent
-
4.6%
4.6%
Number
649
218
867
Percent
26 . 57o
29.8
27.370
EMPLOYMENT
  EFFECTS

     The majority of employees is in the large plant segment.

Consequently a high closure rate for the affected smaller plants

does not necessarily mean that the total unemployment rates will

be the same as the total plant closure rates.


     The total number of personnel in the plant size groups

used in this analysis is 44,627.  This number is arrived at by

extending the average number of employees per firm times the

number of firms in each group.  The number of personnel in these

groups of 44,627 compares to the 44,500 personnel found in the

Census of Manufactures  data for 1967.  The difference is

the effect of the rounding used for the average employees

per firm.

-------
                                                       VII - 12









      (a)  Level I - 1977



     The estimated number-of employees affected by the potential



plant closures of urban plants for Alternate A is shown in



Exhibit VII-9.  This shows an estimated number of employees



of 1,513 or 4.7 percent of a total employment of 34,375.





     For Alternate B the estimated number of employees affected



by the potential plant closures of urban plants is shown in



Exhibit VII-10.  This  exhibit shows 8.8 percent, or 3,040



of 34,375 employees are estimated to be affected by the plant



closures.





     Exhibit VII-11 shows the estimated number of employees



affected by potential closures of rural plants for both



Alterantes A and B.  It is estimated that 8.6 percent of the



total of 10,252 employees, or 874 employees, will be affected.





     For Alternate A the total estimated number of employees



affected by the potential plant closures in urban and rural



areas is estimated to be 5.4 percent or 2,397 employees of



a total of 44,627 employees.  This is shown on Exhibit VII-12.





     For Alternate B the total estimated number of employees



affected by the potential plant closures in urban and rural



areas is estimated to be 8.8 percent, or 3,924 of a total of



44,627 employees.  This is shown in Exhibit VII-13.

-------
                                                       VII  - 13









      It  should be  noted  that whereas the total potential plant



 closures  for Alternate A, as shown  in Exhibit VII-4, is 16.3%



 for  Level  I, the estimated total number of employees affected



 by Level  I  is only 5.4%.  For Alternate B the plant closure



 rate  is 26.5% (Exhibit VII-5) as compared to the employee



 rate  of 8.8 percent.





      (b)  Level II - 1983



      Exhibit VII-14 shows the estimated employees affected by



 Level II potential plant closures for rural areas for both



Alternates A and B.  It  is estimated that 248 out of 9,368



employees or 2.6% will be affected.





      (c)  Summary 1977-1983



     For Alternate A the estimated number of employees  affected



by potential closures due to Level I and Level II pollution



abatement is shown in Exhibi): VII-15.  This exhibit shows  that



a total of approximately 2,650 out of a total of 44,627



employees, or 5.9%, would be affected by potential plant closures





     For Alternate A the following table summarizes the estimated



number of employees affected by potential plant  closures due



to pollution controls for 1977 and  1983 levels:

-------
                                                       VII - 14
                       TABLE VII-8

                       Alternate A
              Summary of Estimated Number of
              	Employees Affected	
    Area          1977              1983	        Total

Urban
Rural
Total
Number
1,513
884
2,397
Percent
4.7 7o
8.6
5.4 70
Number
-
248
248
Percent
- 70
2.6
2.6 %
Number
1,513
1,132
2,645
Percent
4 . 7 70
11.0
5.9 I
     For Alternate B the estimated number of employees affected

by potential closures due to Level I and Level II pollution

abatement is shown in Exhibit VII-16.  This exhibit indicates

that a total of approximately 4,200 out of a total of 44,627

employees, or 9.3 percent, would be affected by potential

plant closures.


     The following table summarizes for Alternate B the estimated

number of employees affected by potential plant closures due

to pollution controls for 1977 and 1983 Levels.

                       TABLE VII-9

                       Alternate B
          Summary of Estimated Number of Employees Affected

             1977               1983            	Total
Area    Number   Percent    Number   Percent    Numbe r   Percent

Urban    3,040    8.870        -         -       3,040     8.87o

Rural      884    8.6        248      2.670      1,132    11.0

Total    3,924    8.870       248      2.670      4,172     9.37o

-------
                                                           VII - 15
 COMMUNITY EFFECTS



      Electroplating shops  are  generally  not  major  employers



 in any particular community.   Consequently, although a number



 of shops and employees  could be  affected,  it  is  not  believed



 that a single community will be  severely impacted.






      In our  survey and  in  later  discussions  with our consultants,



 and other members  of  the Electroplating  Industry,  it was noted



 that there is at  present a shortage  of experienced personnel




 in the Electroplating Industry.  This coupled with increased



 production volumes  to shops that remain, will, we estimate ,



 re-employ approximately 50% of the personnel affected by the



 potential plant closures.  This will not, of course, be an



 average  re-employment across all communities and areas, but is



 is  not possible to  predict what region or areas will be more



 affected.  It  is expected  that the re-employment will probably




occur  primarily in  the  urban areas.  The net effect,  we believe,



will be that only 1,325 out of the estimated 2,650 employees



for Alternate A will be displaced.   For  Alternate B these



figures would be 2,100 out  of the estimated 4,200 affected



employees.

-------
                                                      VII - 16



PRODUCTION EFFECTS

     (a)  Level I - 1977

     For Alternate A Exhibits VII-17, VII-19 and VII-20 show the

estimated production effects or estimated dollars of sales affected

by potential closures of plants due to Level  I pollution abate-

ment.  These are summarized below:


                        TABLE VII-9

                        Alternate A

              Estimated Dollar Sales Affected
                by Potential Plant Closures
Area
Urban
Rural
Total
Estimated Volume
Dollars ($.000)
$29,651.3
17,318.0
346,969.3

Percent
4.4%
8.6
5.4%
     For Alternate B Exhibits VII-18,  VII-19,  and VII-21 show

the estimated dollars of sales affected by potential closures

of plants due to Level I pollution controls.  These exhibits

are summarized in the table on the following page.

-------
                                                       VII  -  17
                        TABLE VII-10
                        Alternate  B
               Estimated Dollar Sales Affected
                by  Potential Plant Closures
                          Estimated Volume
           Area       Dollars  (9.000)Percent
          Urban          $59,565.5            8.8%
          Rural           17.318.0            8.6
           Total         $76.883.5            8.8%

      (b)  Level II - 1983
      Exhibit VII-22 shows the  estimated production effects of
potential closures of rural plants for Level II pollution
abatement for both Alternates A and B.  This exhibit shows
that  approximately 2.6% or 5 million dollars of electroplating
services will be reduced.
     (c)  Summary Level I
           and Level II
     The estimated sales volume that will be reduced by potential
closures of plants for Level I and Level II pollution abatement
Alternates A and B, is shown in Exhibits VII-23 and VII-24.
These are summarized in the table on the following page.

-------
                                                       VII - 18
                        TABLE VII-11
                     Alternate A and B
           Total Estimated Dollar Sales Affected
           by Potential Plant Closures 1977-1983
Level

Level I
Level II
Alternate
A
Dollars Percent
($.000)
$46,969.3
4,893.4

5.4%
2.6
Alternate B
Dollars Percent
($.000)
$76,883.5 8.8%
4,893.4 2.6
  Total     $51,862.7       5.9%    $81,776.9       9.3%

     Several possibilities exist to offset the estimated supply
reduction.  The larger shops should be able to absorb a substan-
tial portion of the demand.  Captive shops may also be potential
sources of supply.   We believe the estimated reduced electro-
plating services will be shifted to, or absorbed by, the
remaining plants in the industry.

-------
                     ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A
POTENTIAL CLOSURES OF NUMBER OF URBAN PLANTS
FOR LEVEL I POLLUTION ABATEMENT
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Number
of Plants
952
439
446
477
132
Potential
Number
238
55
22
7
2
Closures
Percent
25 . 0%
12.5
5.0
1.5
1.5
Remaining
Number
714
384
424
470
130
Plants
Percent
75.0%
87.5
95.0
98.5
98.5
Plant
Code



 A


 B


 C


 D


 E



Total                  2.446         324       13.2%      2.122      86.5%
                                                                                       M
                                                                                       a

-------
                         ENVIRONMENTAL PROTECTION AGENCY
Plant

 Code
  A


  B


  C


  D


  E
ALTERNATE B
POTENTIAL CLOSURES OF NUMBER OF URBAN PLANTS
FOR LEVEL I POLLUTION ABATEMENT
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Number
of Plants
952
439
446
477
132
2^446
Potential
Number
476
110
45
14
4
649
Closures
Percent
50.0%
25.0
10.0
3.0
3.0
26.5%
Remaining
Number
476
329
401
463
128
1,797
Plants
Percent
50 . 0%
75.0
90.0
97.0
97.0
73.5%
                                                                                         w


                                                                                         s
                                                                                         Cd
                                                                                         M
                                                                                         H

                                                                                         <

-------
                     ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A AND B
POTENTIAL CLOSURES
FOR LEVEL I
Plant
Code
A
B
C
D
E
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Number
of Plants
285
131
133
143
39
OF NUMBER OF RURAL PLANTS
POLLUTION ABATEMENT
Potential
Number
142
33
13
4
1
Closures
Percent
50.07,
25.0
10.0
3.0
3.0
Remaining
Number
143
98
120
139
38
Plants
Percent
50.0%
75.0
90.0
97.0
97.0
Total
731
193
26.4%
538
                                                                                     cxi
                                                                                     M
                                                                                     H
                                                                                     U>

-------
                        ENVIRONMENTAL PROTECTION AGENCY


                                 ALTERNATE A


           POTENTIAL CLOSURES OF NUMBER OF URBAN AND RURAL PLANTS

                      FOR LEVEL I POLLUTION ABATEMENT
Plant
Code
A
B
C
D
E
Total
Number of
Employees
1-4
5 -
10 -
20 -
50 -
9
19
49
99
Total
Number
of Plants
1,237
570
579
620
171
3,177
Potential
Number*
380
88
35
11
3
517
Closures
Percent
30 . 7%
15.4
6.0
1.8
1.8
16.3%
Remaining
Number
857
482
544
609
168
2,660
Plants
Percent
69.3%
84.6
94.0
98.2
98.2
83.7%
*From Exhibits VII-1 and VII-3
                                                                                         w
                                                                                         X
                                                                                         M

                                                                                         H
                                                                                         I
                                                                                         -P-

-------
                     ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE B


Plant
Code
A
B
C
D
E
POTENTIAL

Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
CLOSURES OF
FOR LEVEL I
Total
Number
of Plants
1,237
570
579
620
171
NUMBER OF URBAN AND RURAL PIANTS
POLLUTION ABATEMENT

Potential
Number*
618
143
58
18
5

Closures
Percent
50,07,
25.0
10.0
2.9
2.9

Remaining
Number
619
427
521
602
166

Plants
Percent
50.0%
75.0
90.0
97.1
97.1
Total
3,177
                                      842
26.5
2,335    73.5
 *From Exhibits VII-2 and VII-3
                                                                                     w
                                                                                     X
                                                                                     PC
                                                                                     i
                                                                                     Ln

-------
                      ENVIRONMENTAL  PROTECTION AGENCY
ALTERNATE A AND B
POTENTIAL CLOSURES OF NUMBER OF RURAL PLANTS
FOR LEVEL II POLLUTION ABATEMENT
Plant
Code
A
B
C
D
E
Total
Number of
Employees
1-4
5 -
10 -
20 -
50 -

9
19
49
99

Number
of Plants v1)
143
98
120
139
38
538
Potential
Number
14
5
2
3
_1
25
Closures
Percent
10.0%
5.0
2.0
2.0
2.0
4.6%
Remaining
Number
129
93
118
136
37
513
Plants
Percent
90.0%
95.0
98.0
98.0
98.0
95.4%
Note:  (1)  Plants remaining assuming
            potential closures occur in 1977.

-------
ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A
POTENTIAL CLOSURES OF NUMBER OF TOTAL PLANTS
FOR LEVEL I AND LEVEL II POLLUTION ABATEMENT
Plant
Code
A
B
C
D
E
Total
Number of
Employees
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
Number
of Plants
1,237
570
579
620
171
_3j_177
Potential
Number
394
93
37
14
4
542
Closures
Percent
31.9%
16.3
6.4
2.3
2.3
17.1%
Remaining
Nunber
843
477
542
606
167
2,631
Plants
Percent
68 . 1%
83.7
93.6
97.7
97.7
82.9%
                                                                   M
                                                                   X
                                                                   SB
                                                                   (—i
                                                                   Cfl
                                                                   M
                                                                   H

-------
                     ENVIRONMENTAL PROTECTION AGENCY


                               ALTERNATE B



               POTENTIAL CLOSURES OF NUMBER OF TOTAL PLANTS

               FOR LEVEL I AND LEVEL II POLLUTION ABATEMENT
Plant
Code
A
B
C
D
E
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Number
of Plants
1,237
570
579
620
171
Potential
Number
632
148
60
21
6
Closures
Percent
51.1%
26.0
10.4
3.4
3.5
Remaining
Number
605
422
519
599
165
Plants
Percent
49 . 9%
74.0
89.6
96.6
96.5
Total                  3,177         867     27.3%       2.310    72.7%
                                                                                    w
                                                                                    M
                                                                                    H
                                                                                     I
                                                                                     oo

-------
                       ENVIRONMENTAL PROTECTION AGENCY

                                 ALTERNATE A
         ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL CLOSURES
               OF URBAN PLANTS FOR LEVEL I POLLUTION ABATEMENT	
Number of Employees
Plant
Code
A
B
C
D
E


Average
All
Number of
Potential
Range per Plant Plants Plant Closures*
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
2
7
14
30
67
1,904
3,073
6,244
14,310
8.844
238
55
22
7
2
Estimated
Number of
Employees Affected
Number
476
385
208
210
134
Percent
25.0%
12.5
4.9
1.5
1.5
Total
34.375
324
1,513
4.7%
*From Exhibit VII-1
                                                                                      v£>

-------
                      ENVIRONMENTAL PROTECTION AGENCY


                             ALTERNATE A AND B


         ESTIMATED NUMBER OF  EMPLOYEES  AFFECTED BY POTENTIAL CLOSURES
               OF URBAiSf  PLANTS  FOR LEVEL I POLLUTION ABATEMENT
Number of Employees
Plant
Code
A
B
C
D
E


Range
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
Average
per Plant
2
7
14
30
67
All
Plants
1,904
3,073
6,244
14,310
8.844
Number of
Potential
Plant Closures*
476
110
45
14
4
Estimated
Employees
Number
952
770
630
420
268
Number of
Affected
Percent
50 . 0%
25.1
10.1
2.9
3.0
Total
34.375
649
3,040
8.8%
 *From Exhibit VII-2
                                                                                        X
                                                                                        ffi
                                                                                        h-l
                                                                                        I

-------
                      ENVIRONMENTAL PROTECTION AGENCY
ALTERNATE A AND B
ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL CLOSURES
OF RURAL PLANTS FOR LEVEL I POLLUTION ABATEMENT
Number of Employees
Number of
Plant Average All Potential
Code Range per Plant Plants Plant Closures*
A 1-4 2
B 5-9 7
C 10-19 14
D 20-49 30
E 50-99 67
Total
570
917
1,862
4,290
2.613
10,252
142
33
13
4
1
193
Estimated Number of
Employees Affected
Number Percent
284
231
182
120
67
884
«HM«BBHi*
49.8%
25.2
9.8
2.8
2.6
8.6%
*From Exhibit VII-3
                                                                                      w


                                                                                      B
                                                                                      M

                                                                                      03
                                                                                      M
                                                                                      H

-------
                       ENVIRONMENTAL PROTECTION AGENCY


                                ALTERNATE A


         ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL CLOSURES

          OF PLANTS (RURAL AND URBAN)  FOR LEVEL I POLLUTION ABATEMENT
Number of Employees
Plant
Code
A
B
C
D
E


Range
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
Average
per Plant
2
7
14
30
67
All
Plarts
2,474
3,990
8,106
18,600
11,457
Number of
Potential
Plant Closures-1'
380
88
35
11
3
Estimated
EmplpYees
Number
760
616
490
330
201
Number of
Affected
Percent
30.7%
15.4
6.0
1.8
1.8
Total
44,627
517
2,397
5.4%
*From Exhibit VII-4
                                                                                       X
                                                                                       EC
                                                                                       M
                                                                                       td
                                                                                       N>

-------
                               ENVIRONMENTAL PROTECTION AGENCY

                                       ALTERNATE B


              ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL  CLOSURES
               OF PLANTS  (RURAL AND URBAN) FOR LEVEL I POLLUTION ABATEMENT
Number of Employees
Plant
Code
A
B
C
D
E
Total


Range
1 -
5 -
10 -
20 -
50 -

4
9
19
49
99

Average
per Plant
2
7
14
30
67

All
Plants
2,474
3,990
8,106
18,600
11.457
44.627
Number of
Potential
Plant Closures *
618
143
58
18
5
824
Estimated
^Employees
Number
1,236
1,001
812
540
336
3,924
Number of
Affected
Percent
50.0%
25.1
10.0
2.9
2.9
8.8%
                                                                                                X
* From  Exhibit VII-5
I
t-*
U>

-------
                       ENVIRONMENTAL PROTECTION AGENCY


                           ALTERNATES A AND B



         ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL CLOSURES

         	OF RURAL PLANTS FOR LEVEL II POLLUTION ABATEMENT
             Number of Employees
Plant
Code
A
B
C
D
E
Average All
Range per Plant Plants
1
5
10
20
50
- 4
- 9
- 19
- 49
- 99
2
7
19
30
67
286
686
1,680
4,170
2,546
                                   (1)
              Number of

              Potential
           Estimated Number of

            Employees Affected
Plant Closures*
14
5
2
3
1
Number
28
35
28
90
67
Percent
9.8%
5.1
1.7
2.2
2.6
Total
9,368
25
248
2.6
Note:  (1) Plants remaining after

           potential Level I closures,



 * From Exhibit VII-6
                                                        •=
                                                        M
                                                        00
                                                        M
                                                        H
                                                                                      I—1
                                                                                      -P-

-------
                       ENVIRONMENTAL PROTECTION AGENCY



                               ALTERNATE A
        ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY  POTENTIAL  CLOSURES

            OF  PLANTS FOR LEVEL  I AND LEVEL  II POLLUTION ABATEMENT
Number of Employees
Plant
Code
A
B
C
D
E


Average
All
Number of
Potential
Range per Plant Plants Plant Closures*
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
2
7
14
30
67
2,474
3,990
8,106
18,600
11,457
394
93
37
14
4
Estimated
Number of
Employees Affected
Number
788
651
518
420
268
Percent
31.9%
16.3
6.4
2.3
2.3
Total
44,627
642
2,645
5.9%
  From Exhibit VII-7
                                                          x
                                                          a
                                                          I-H
                                                          w

-------
                      ENVIRONMENTAL PROTECTION AGENCY

                              ALTERNATE B
        ESTIMATED NUMBER OF EMPLOYEES AFFECTED BY POTENTIAL CLOSURES
            OF  PLANTS FOR LEVEL I AND LEVEL II POLLUTION ABATEMENT
Number of Employees
Plant
Code
A

B
C
D

E


Range
1 -

5 -
10 -
20 -

50 -
4

9
19
49

99
Average
per Plant
2

7
14
30

67
All
Plants
2,474

3,990
8,106
18,600

11,457

Number of
Potential
Plant Closures /v
632

148
60
21

6

Estimated
Employees
Number
1 264
•*- J *- W*"T
1,036
840
C. O A
D JU
402
Number of
Affected
Percent

51.1%
26.0
10.4

3.4
3.5
Total
44,627
867
                                                         4.172
                                                                       9.3%
* From Exhibit VII-8
                                                                                       Hi


                                                                                       <

-------
                          ENVIRONMENTAL PROTECTION AGENCY

ALTERNATE A



ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES
OF URBAN PLANTS FOR LEVEL I POLLUTION ABATEMENT
Plant
Code
A
B
C
D
E
Total
Annual Sales ($.000) Number of
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
All Potential
Estimated Sales Volume
Affected ($ 000)
Plants Plant Closures* Sales
$ 38,365.6
59,265.0
117,253.4 •
283,481.1
177,606.0
$675,971.1
238
55
22
7
I
324
$ 9,591.4
7,425.0
5,783.8
4,160.1
2,691.0
£_29_i_651.3
Percent
25.07o
12.5
4.9
1.5
1.5
4.4%
From Exhibit VII-1
                                                                                          w
                                                                                          I
                                                                                          h-'
                                                                                          -»J

-------
                       ENVIRONMENTAL PROTECTION AGENCY



ALTERNATE B



ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES
OF URBAN PLANTS FOR LEVEL I POLLUTION ABATEMENT
Annual Sales C$.000)
Plant
Code
A
B
C
D
E
Total
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
All
Plants
$ 38,365.6
59,265.0
117,253.4
283,481.1
177,606.0
$675.971.1
Number of
Potential
Plant Closures '
476
110
45
14
4
649
Estimated Sales Volume
Affected ($ 000)
Sales
$19,182.8
14,850.0
11,830.5
8,320.2
5,382.0
$59,565.5
Percent
50.0%
25.0
10.1
3.0
3.0
8.8%
* From Exhibit VII-2
                                                                                              I
                                                                                              \->
                                                                                              00

-------
                             ENVIRONMENTAL PROTECTION AGENCY

                                  ALTERNATES A AND  B

                  ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES
                     OF RURAL PLANTS FOR LEVEL I POLLUTION ABATEMENT

Plant
Code
A
B
C
D
E


Number of
Employees
1 -
5 -
10 -
20 -
50 -
4
9
19
49
99
Annual
Sales ($
Average
per Plant
$ 40.
135.
262.
594.
1,345.
3
0
9
3
5
.000)
All
Plants
$ 11
17
34
84
52
,485
,685
,965
,984
,474
Number of
Potential
Estimated Sales Volume
Affected ($.000)
Plant Closures* Sales
.5
.0
.7
.9
.5
142
33
13
4
1
$ 5
4
3
2
1
,722.6
,455.0
,417.7
,377.2
,345.5
Percent
49.8%
25.2
9.8
2.8
2.6
Total
$201.595.6
193
$17.318.0    8.6
  * From Exhibit VII-3
                                                                                            PC

-------
                             ENVIRONMENTAL PROTECTION AGENCY

ALTERNATE A
ESTIMATED DOLLAR SALES AFFECTED
(URBAN AND RURAL) FOR LEVEL I
Annual Sales ($.000)
Plant
Code
A
B
C
D
E
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
BY POTENTIAL CLOSURES
POLLUTION ABATEMENT
Number of
All Potential
Plants Plant Closures
$ 49,851.1
76,950.0
152,219.1
368,466.0
230,097.6
380
88
35
11
3
Estimated Sales Volume
Affected ($.000)
* Sales
$15,314.0
11,880.0
9,201.5
6,537.3
4,036.5
Percent
30.7%
15.4
6.0
1.8
1.8
Total
517
$846.969.3    5.4%
  * From Exhibit VII-4
                                                                                             N>
                                                                                             o

-------
Plant

 Code
  A



  B



  C



  D



  E




Total
                            ENVIRONMENTAL PROTECTION AGENCY



                                ALTERNATE B



                  ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES

                    (URBAN AND RURAL) FOR LEVEL I POLLUTION ABATEMENT
Annual Sales ($.000)
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99

Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5

All
Plants
$ 49,851.1
76,950.0
152,219.1
368,466.0
230.097.6
$877,583.8
Number of Estimated Sales Volume
Potential
Plant Closures *
618
143
58
18
5
842
Affected
Sales
$24,905.4
19,305.0
15,248.2
10,697.4
6,727.5
$76,883.5
($.000)
Percent
50.0%
25.1
10.0
2.9
2.9
8.8%
    * From Exhibit VII-5
w
X
as
I—I
Cd
I—I
H
                                                                                               t

                                                                                              NJ

-------
                             ENVIRONMENTAL PROTECTION AGENCY

ALTERNATES A
AND B


ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES
OF RURAL PLANTS FOR LEVEL II POLLUTION ABATEMENT
Annual Sales ($.000)
Plant
Code
A
B
C
D
E
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
Plants U)
$ 5,762.9
13,230.0
31,548.0
82,607.7
51,129.0
Number of Estimated Sales Volume
Potential Affected ($.000)
Plant Closures*
14
5
2
3
1
Sales
$ 564.2
675.0
525.8
1,782.9
1.345.5
Percent
9.8%
5.1
1.7
2.2
2.6
Total
$184,277.6
25
2.6.
 (1)  Based upon plants remaining after
      potential plant closures.
  * From Exhibit VII-6
                                                          PC
                                                          M
                                                          W
                                                          M
                                                          H
                                                                                            to

-------
                             ENVIRONMENTAL PROTECTION AGENCY
Plant
 Code
  A


  B


  C


  D


  E
                                    ALTERNATE A



                  ESTIMATED DOLLAR SALES AFFECTED BY POTENTIAL CLOSURES

                  OF PLANTS FOR LEVEL I AND LEVEL II POLLUTION ABATEMENT
Annual Sales ($.000)
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
All
Plants
$ 49,851.1
76,950.0
152,219.1
368,466.0
230,097.6
Number of
Potential
Plant Closures
394
93
37
14
4
Estimated Sales Volume
Affected
Sales
$15,878.2
12,555.0
9,727.3
8,320.2
5.382.0
($.000)
Percent
31.9%
16.3
6.4
2.3
2.3
Total
867
5.97o
                                                                                             w
                                                                                             x
                                                                                             S
                                                                                             H
                                                                                             w
                                                                                             M
                                                                                             H
                                                                                             ro

-------
                           ENVIRONMENTAL PROTECTION AGENCY

ALTERNATE B
ESTIMATED DOLLAR SALES AFFECTED
OF PLANTS FOR LEVEL I AND LEVEL
Annual Sales ($.000)
Plant
Code
A
B
C
D
E
Total
Number of
Employees
1-4
5-9
10 - 19
20 - 49
50 - 99
Average
per Plant
$ 40.3
135.0
262.9
594.3
1,345.5
All
BY POTENTIAL
II POLLUTION
Number of
Potential
CLOSURES
ABATEMENT

Estimated Sales Volume
Affected ($.000)
Plants Plant Closures* Sales
$ 49,851.1
76,950.0
152,219.1
368,466.0
230.097.6
$877,583.8
632
148
60
21
6
867
$25,469.6
19,980.0
15,774.0-
12,480.3
8.073.0
$81,776.9
Percent
15.1
26.0
10.4
3.4
3.5
9.3%
* From Exhibit VII-8
                                                                                            i
                                                                                            NJ

-------
                 VIII - LIMITS OF THE ANALYSIS

     In this section the accuracy of the analysis and the
major assumptions inherent in the conclusions are discussed.

ACCURACY
     In assessing the impact of pollution abatement on the
Electroplating Industry, a considerable amount of data had to
be gathered in a limited time frame.  Much of the information
used was compiled from existing industry studies.  These studies
were supplemented by direct analysis of specific plants in the
Midwest as a cross check of the industry studies.  However,
because the sample size of the supplemental studies was small,
some range of error can be expected.

     It is recognized that industry studies also represented
a small percent of the plants in the industry, consequently,
these studies also had some limitations.  It is the opinion of
the contractor that while preciseness may not be present, the
order of magnitude of the effect of pollution control can be
derived from the information.

     Specifically, the accuracy of this study depends upon the
accuracy of:
          1.  Published industry data.
          2.  Unpublished information supplied by knowledgeable
industry personnel.

-------
                                                        VIII - 2
          3.  Cost data developed separately from this
analysis by Battelle Memorial Institute and the Environmental
Protection Agency.
          4.  Estimates by A. T. Kearney consultants.

     (a)  Published
          Data
          1.  Production and Size.  The published data provided
by the Census of Manufactures  - 1967. Annual Survey of
Manufacturers - 1971, Metal Working Guide - 1973, and that
collected from the National Association of Metal Finishers
have some areas of conflict.  In general however, the data
were felt to be sufficiently accurate to be used as an indicator
of the relative size and growth of this industry.

          2.  Profitability.  Little published financial data
were available regarding the profitability of the Electroplating
Industry except for Robert Morris Associates, Annual Statement
Studies.   Therefore, much of the profitability data was calculated
based on industry average data published by the National Association
of Metal Finishers, and A. T. Kearney, Inc. survey and estimates.

      (b)  Unpublished Data
          and  Information
     A. T. Kearney, Inc. conducted a survey in which members
of  the Electroplating Industry were personally contacted or
interviewed by  telephone to determine plant capacities, type

-------
                                                         VIII - 3
of water pollution control facilities in existence, operating



and cost data, and plans for future growth and development.





     In addition, Kearney was privileged to be privy to some



unpublished data regarding sales and profit margins for a



sample of electroplating firms.





     Kearney also personally interviewed five Chicago area



banks to determine criteria for making loans to electroplating



firms and the availability of funds for pollution control



equipment.





     These data have been treated on a confidential basis and



are assumed to be accurate.  However, not all respondents



would, or could, supply the desired information.  Thus, some



data had to be estimated to provide a complete analysis.  The



result is that total industry data, particularly that



regarding employment levels and sales volumes, are believed



to be more accurate than data from surveys.





     (c)  Cost Data



     The cost data provided were used as supplied.  No effort



was made to audit these data, but the order of magnitude of



costs seemed to be in line with industry expectations.

-------
                                                          VIII - 4
     (d)  A. T. Kearney, Inc.
     	Estimates	

     Since some data were treated as proprietary  by industry

sources, or unavailable, it was occasionally necessary to

estimate some industry data.  An example of such an estimate

would be the profit margins for each of the model plant sizes.


     While some of these data were not specifically published

in the report, they were a necessary step in the analysis.

They were not presented due to the confidentiality of the data


CRITICAL ASSUMPTIONS
  IN ANALYSIS
     In assessing the impact on the industry, certain assumptions

have been made which have direct bearing on the results of the

study.  The following major assumptions have been made.


     (a)  Plant Size

     The industry has been assumed to be similar in each

segment according to size.  Sales, employment and production

are assumed to be relevant units of measurement for the plants

in the industry.


     (b)  Operating Characteristics
     	of the Industry	

     The majority of the small shops were assumed to handle

similar waste streams and operate in approximately the same

manner according to size, as stated in the above paragraph.

-------
                                                        VIII - 5
     (c)  Plant Distribution
          by Geographical
     	Location	

     In the absence of more accurate data, the water discharged

into streams versus that discharged into municipal sewers was

assumed to represent the distribution of the plants by

geographical location, i.e. rural versus urban areas.


     (d)  Present Level of
          Pollution Control
     	Equipment Investment

     The plants in the industry affected by pollution abatement

have either zero current investment in water treatment equipment

or the estimated costs to meet guidelines are additive for those

plants already using some type of treatment.


     (e)  Profitability
          of Firms
     Profitability and costs for the plants located within

urban and rural areas were assumed to be similar.


     (f)  Investment and Profit
     	Maximizing Decision
     It was assumed that all shop owners will attempt to

maximize profits.  It was also assumed that five years profits

would be the maximum amount of investment a shop owner would

be willing to forego before going out of business.

-------
BIBLIOGRAPHIC DATA  I'• K-.p^rt No.
SHEET              EPA-230/1-73-007
                                                             3. HkCipicnt'i Accession ,V>.
4. in ic-
        Subtitle
   Economic Analysis of  the Proposed Effluent
   Guidelines  for the Electroplating Industry  (copper,
                                                             5> Report
                                                                September,  1973
                                                            6.
                  i nm a r>H
7. Author(j)
                                                            &• Performing
                                                              No.
). Performing Organization Name and Address

   A.  T. Kearney, Inc.
   100 South Wacker Drive
   Chicago, Illinois 20460
                                                             10. Proicct/Tast/'Aorl: L'n.t N<.
                                                             11. Contract/Grant .No.

                                                              68-01-1545
12. Sponsoring Organization Name and Aadress
   Office of  Planning and Evaluation
   Environmental Protection Agency
   Washington,  D. C.  20460
                                                             13. Type or Report it Periou
                                                               Covered

                                                                 Final  Report
                                                             14.
15. Supplementary Notes
16. Abstracts
   The report  summarizes  the economic impact of water pollution
   abatement on the Electroplating Industry (Copper, Nickel, Chromium
   and Zinc).   Discussed  are the  industry  structure, financial profile,
   sources of  water pollution, projected costs and  price  increases,
   and the effects on  production,  plant closings,  and local communities.
17. Key 'i'ords and Document Analysis. 17o. Descriptors

    Economic  factors, Electroplating Industry, pollution,  industrial
    waste treatment, water pollution, ecology.
17b. Ucntifiers/Open-Ended Terms

   Electroplating Industry, water pollution economics, economic  impact
17e. COSAT1 FieU/Group (5C)
13, Av.ul.ibility >:.itLT.ii-nt
                                                  19. >ctuntv C-.iaiS (ihi-.
                                                     Report 1
                                                       I :\f i  v -,ctrii M
21. No. .: .
    177
                                                                      22.
        ( H L_ V . J /_')

-------