tUhLIDGK A. iii^ JAT A
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EPA-230/2-74-001
PB 238 268
4. i it J r ..n.i *ul'i tc lc
ECONOMIC ANALYSIS OF EFFLUENT GUIDELINES - ASBESTOS INDUSTRY
5- i Km- (issued)
December, 1974
6.
7. A ui tf.'f! s )
Basil U.N. Igwe
8. Performing Or^.mi/juvo Kept.
Nu' C-75934-04
9. I Vf tu i n Oi^iniJ.i( iuii N.unc and AJdns-,
Arthur D. Little, Inc.
Acorn Park
Cambridge, Massachusetts 02140
10. I'rojrd 1 ask; k I'll it «\i».
Task No. 4
11. Conif.iciAirjm No.
68-01-1541
12* Sponsoring Or^jrti2auon Name and Addicts
Office of Planning & Evaluation
Environmental Protection Agency
401 M. Street, SW
Washington, D.C. 20460
13. I ypc ul Kcport lJcrioJ
CoVCfvd
Final
14.
15. Supplementary Notes
16. Abstracts
An analysis was made of the potential economic impact on the asbestos products
manufacturing industry due to the implementation of the effleunt limitations standards
formulated in compliance with the 1972 Federal Water Pollution Gontrol Act Amendments.
The capital costs of meeting the "Best Practicable Technology" and ''Best Avail-
able Technology" provisions of the standards are estimated to be $2.9 million and
$6.5 million respectively. Annualized effluent treatment costs are respectively $1.4
million and $2.9 million. The industry is not expected to suffer major adverse
impacts (under both standards) as measured by loss of production, unfavorable price
structure, employment curtailment, etc.
17. Key U'r.rJs anJ Document Analysis. 17q. Descriptors
Asbestos-cement pipe; Asbestos-cement sheet; Asbestos floor tile; Asbestos millboard;
Asbestos paper; Asbestos roofing; Asbestos Industry; Best Available Control Technol-
ogy; Best Practicable Control Technology; Economic Impact Analysis; Effluent
Limitation Guidelines.
17b. Idcmif /Opcn-l'.nJcii Terms
Rtprodvctd fay
NATIONAL TECHNICAL
INFORMATION SERVICE
US D.ptrtment of CemiM/c*
Sprinjfi.M, VA. 2SI51
17c. I i>sA It i i.-MA-puip
PMCK SUBJECT TO CHANGl
I). * • . i.i if. r j , f | i .
H < |»iMI *
. L'"-L1 '.. JillI l'._
i'u. . •(. i.i»»•» » 11.. 11 in-.
r.,-.
VM If It M
21. .V». ,.j V
-------
PREFACE
The attached document is a contractor's study prepared with the supervi-
sion and review of the Office of Planning and Evaluation of the U.S.
Environmental Protection Agency (EPA). Its purpose is to provide a basis
for evaluating the potential economic impact of effluent limitations
guidelines and standards of performance established by EPA pursuant to
sections 304(b) and 306 of the Federal Water Pollution Control Act.
The study supplements an EPA cechnical "Development Document" issued in
conjunction with the promulgation of guidelines and standards for point
sources within this industry category. The Development Document surveys
existing and potential waste treatment and control methods and technol-
ogies within this category and presents the investment and operating costs
associated with various control technologies. This study supplements
that analysis by estimating the broader economic effects (including
product price increases, continued viability of affected plants, employ-
ment, industry growth and foreign trade) of the required application of
certain of these control technologies.
This study has been submitted in fulfillment of Contract No. 68-01-1541«
Task Ho. 4 by Arthur D. Little, Inc. Work was completed as of November
15, 1974. The study is based primarily upon an earlier study, also pre-
pared by Arthur D. Little, Inc. entitled "Economic Analysis of Proposed
Effluent Guidelines for The Asbestos Products Manufacturing Industry."
The earlier report was circulated in conjunction with the publication In
the Federal Register of a notice of proposed rulemaking under sections
304(b) and 306 for the subject point source category. The analysis con-
tained in the original study has been updated based upon information
received during the period of time between publication of the notice of
proposed rulemaking and the promulgation of the final regulation. Because
of the constraints of time, the control and treatment costs analyzed in
this study may not in all instances be identical to those associated with
the requirements of the promulgated regulation. However, those differ-
ences, when they exist are minor insofar as the final conclusions of the
study are concerned.
This report represents the conclusions of the contractor. It has been
reviewed by the Office of Planning and Evaluation and approved for
publication. Approval does not signify that the contents necessarily
reflect the views of the Environmental Protection Agency. The study has
been considered, together with the Development Document, information
received in the form of public comments on the proposed regulation, and
other materials in the establishment of final effluent limitations guide-
lines and standards of performance.
i-A
Arthur D Little; fnc
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TABLE OF CONTENTS
Page
PREFACE i
LIST OP TABLES iii
LIST OF FIGURES v.
EXECUTIVE SUMMARY vii
INDUSTRY SUMMARY X
PARTII: INDUSTRY STRUCTURE
TYPES OF FIRMS 1
TYPES OF PLANTS 5
NUMERICAL AND PERCENTAGE DISTRIBUTION OF PLANTS,
EMPLOYEES AND PRODUCTION 16
FINANCIAL PROFILE 20
COST STRUCTURE 28
PART II: ECONOMIC IMPACT ANALYSIS
A. PROPOSED EFFLUENT QUALITY STANDARDS 32
B. EFFLUENT TREATMENT TECHNOLOGIES 32
C. CURRENT LEVELS•OF POLLUTION ABATEMENT 33
D. WATER TREATMENT COSTS 35
1: Capital Investment Costs 36
2: Annual Treatment Costs 37
3: Specific Plant Costs and Projected Industry Costs 37
I. ECONOMIC IMPACT ANALYSIS 46
1. Methodology 46
2. Impact of the BPT Standards 48
3. Impact of the BAT Standards 57
4. Impact of New Source Performance Standards 61
LIMITS OF THE ANALYSIS 63
APPENDICES 66
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LIST OF TABLES
Table
No,
II
III
IV
VI
VII
VIII
IX
XI
XII
XIII
XV
Distribution of Asbestos Products Manufacturing
Facilities by Legal Organizational Form
Distribution of Asbestos Products Manufacturing
Facilities by Types of Operation
The Major Asbestos Manufacturing Firms and Plants
in the United States
Asbestos-Based Activity of the Major Asbestos-
Manufacturing Companies
Trends in the Number of Asbestos Products
Manufacturing Companies
Proportion of Shipments Accounted for by the Largest
Companies
Specialization and Coverage Ratios for the Asbestos
Products Manufacturing Industry
Captive Fiber Sources for the Major Asbestos Products
Manufacturing Firms
Asbestos Products Manufacture: Distribution of Plant
Sizes
Asbestos Products Manufacturing: Total Employment as
a Function of Size of Facilities
Asbestos Products Manufacturing: Total Payroll as a
Function of Size of Facilities
Asbestos Products Manufacturing: Value Added by
Manufacture as a Function of Facility Sizes
Asbestos Products Manufacturing: Value of Shipments
Versus Plant Size
Asbestos Products Manufacturing: New Capital
Expenditures Versus Plant Size
Synthetic Income Statement and Balance Sheet for the
Asbestos Products Manufacturing Industry
Page
2
3
5
6
6
9
17
17
20
21
24
25
29
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LIST OF TABLES (Concluded)
Table
No.
XVI
XVII
XVIII
XIX
XX
XXI
XXII
XXIII
XXIV
XXV
XXVI
Financial Status of Major Companies In the Asbestos
Products Industry - 1972
Recent Trends in Materials and Payroll Costs for the
Asbestos Products Manufacturing Industries
Asbestos-Cement Pipe Plants: Water Treatment Capital
Investment as a Function of Treatment Capacity
Estimated Total Costs to the Asbestos Products
Manufacturing Industry of Meeting the BPT Water Effluent
Standards
Estimated Total Costs to the Asbestos Products
Manufacturing Industry of Meeting the BAT Water Effluent
Standards
Water Treatment Costs, by Companies, to Meet the BPT
and BAT Effluent Standards
New Water Treatment Costs (by Major Asbestos Products)
Manufacturing Firms) as a Proportion of Annual Capital
Expenditures
C&EN Quoted Price Trend for 6-inch and 12-inch Asbestos-
Cement Pipe (Carload Lots)
Water Treatment Costs to Meet Proposed Standards in
Asbestos Products Manufacturing
Financial Impact of the BPT Standards on the Major
Asbestos Products Manufacturing Companies
Recent Trends in Value of U.S. Exports and Imports of
Manufactured Asbestos Products
Page
30
30
36
45
45
46
47
49
51
52
57
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LIST OF FIGURES
Figure
So. Page
1 Historical Trend in Che Number of Companies Involved
in Asbestos Products Manufacturing 7
2 Geographical Location of the Major Asbestos-Cement
Plants in the United States 10
3 Geographical Location of the Major Asbestos-Cement
Sheet Plants in the United States 11
4 Geographical Location of the Major Asbestos
Millboard Plants in the United States 12
5 Geographical Location of the Major Asbestos Paper
Plants in the United States 13
6 Geographical Location of the Major Asbestos Roofing
Plants in the United States 14
7 Geographical Location of the Major Vinyl-Asbestos
Floor Tile Plants in the United States 15
8 Cumulative Distribution of Asbestos Products
Manufacturing Facilities as a Function of Plant Size 18
9 Asbestos Products Manufacturing Industry - Cumulative
Employment Versus Size of Facilities 19
10 The Asbestos Products Manufacturing Industry - Payroll
Distribution as a Function of Facility Sizes 22
11 The Asbestos Products Manufacturing Industry - Value
Added by Manufacture as a Function of Sizes of
Facilities 23
12 The Asbestos Manufacturing Industry - Value of Shipments
as a Function of Size of Facilities 26
13 The Asbestos Manufacturing Industry - The Capital
Expenditures Versus Plant Size 27
14 Asbestos-Cement Pipe Plant: Water Treatment Cost Versus
Effluent Treatment Capacity 38
15 Asbestos-Cement Sheet Plant! Effluent Treatment Costs
as a Function of Effluent Treatment Capacity 39
v
Arthur D little inc
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LIST OF FIGURES (Concluded)
Figure
Mo. Page
16 Asbestos Paper Plant: Water Treatment Cost as a
Function of Effluent Treatment Capacity 40
17 Asbestos Millboard Plant: Water Treatment Cost Versus
Effluent Treatment Capacity 41
18 Asbestos Roofing Plant: Water Treatment Costs Versus
Effluent Treatment Capacity 42
19 Vinyl-Asbestos Tile Plant: Water Treatment Costs vs.
Effluent Treatment Capacity 43
vl
Arthur D Little; Inc
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EXECUTIVE SUMMARY
This report represents an assessment of the probable economic impact on
the asbestos industry resulting from promulgation of the applicable ef-
fluent limitations guidelines for these sources published by the Environ-
mental Protection Agency (IPA) in the Federal Register of Tuesday,
February 26, 1974. The specific industry sub-categories of interest are
asbestos-cement pipe, asbestos-cement sheet, asbestos paper (starch and
elastomeric binders), asbestos millboard, asbestos roofing products, and
asbestos floor tile.
Impact of the "Best Practicable Technology" (BPT) Standards
The total capital costs to the various segments for meeting the 1977 BPT
standards are estimated to be;
Asbestos-cement Pipe Manufacturing $ 700,000
Asbestos-cement Sheet Manufacturing 655,000
Asbestos Paper Manufacturing 650,000
Asbestos Millboard Manufacturing 147,000
Asbestos Roofing Manufacturing 103,000
Asbestos Floor Tile Manufacturing 673,000
Total for the industry $2,928,000
As a proportion of the estimated annual sales of these products, these re-
quired capital expenditures generally amount to less than 1.8 percent and
are thought to be well within the capital-raising capability of the large
diversified firms involved in the manufacture of these product lines. How-
ever, since these segments generally employ extensively depreciated equip-
ments and have not invested to a significant degree in new capital equip-
ments for the past several years, the above capital cost estimates, when
viewed as a percentage of average annual investments in these product lines,
are distorted on the high side. It is for this reason that the estimated
BPT-related capital expenditures represent between 12 and 58 percent of
these annual investments.
The annualized costs to the respective segments for achieving the BPT stan-
dards amount to the following percentages of the 1972 sales of the respec-
tive products:
Asbestos-cement Pipe Manufacturing
0.2%
Asbestos-cement Sheet Manufacturing
0.4%
Asbestos Paper Manufacturing
0.2%
Asbestos Millboard Manufacturing
1.0%
Asbestos Roofing Manufacturing
0.8%
Asbestos Floor Tile Manufacturing
0.1%
It is concluded that these additional costs would not exert a significant
impact on the prices and the market competitiveness of the respective prod-
ucts vis-vis imports and substitute materials. In fact, it is probable
vii
Arthur D Little Inc.
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that, in general, manufacturers of these products may tend to absorb these
costs not only because they are relatively negligible, but also because
the above products have, in recent years, been confronting stiff market
competition from other competitive substitute products. If the costs are
absorbed, the effect of such action on overall corporate profitability is
expected to be minimal, especially in light of the fact that virtually
all the asbestos products manufacturers are extensively diversified into
apparently more profitable non-asbestos manufacturing.
However, three plants,—one sheet and two millboard,—were identified,
solely on the basis of these additional costs and without evaluation of
other factors that may impinge on this decision, as potential candidates
for shut-down. If shut-down should indeed occur, the resultant loss of
employment would amount to about 2% (275 employees) of the total industry
workforce. In spite of the fact that the impacted sheet plant is located
in an area of "substantial unemployment" and one of the millboard plants
is in an area of "persistent unemployment," no significant adverse commun-
ity impacts would result, although laid-off individuals would have to con-
tend with personal adverse impacts and inconveniences.
In terms of the national balance of payments, it is expected that the past
trend in favor of the United States would continue, essentially unaffected
by the BPT standards, but with the gap narrowing with time as indigenous
manufacturing capability is developed in foreign countries.
Impact of "Best Available Technology" (BAT) Standards
Assuming that the industry installed effluent treatment facilities which,
in a single step would bring their present (1972) operations into compli-
ance with the BAT standards, the associated capital expenditures are esti-
mated to be:
It is not expected that capital expenditures of this magnitude would pose
any undue problems to any of the industry segments concerned.
As for the annualized additional costs associated with meeting these stan-
dards, they represent the following proportions of the estimated 1972 sales
of the subject asbestos products:
Asbestos-cement Pipe Manufacturing
Asbestos-cement Sheet Manufacturing
Asbestos Paper Manufacturing
Asbestos Millboard Manufacturing
Asbestos Roofing Manufacturing
Asbestos Floor Tile Manufacturing
$1,668,000
1,434,000
1,253,000
147,000
256,000
1,752,000
Total for the industry
$6,510,000
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Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
0.4%
1.0%
0.6%
1.0%
1.1%
0.1%
A survey of the water treatment needs of the various manufacturing plants
shows that one asbestos paper plant, in addition to the three facilities
identified as potentially impact-sensitive by reason of the BPT guidelines,
is expected to be adversely impacted by implementation of the BAT standards.
The total loss of sales potentially relatable to the BAT effluent standards
would equal about 0.6%, with the loss of employment amounting to 2.4% of
the work-force. No adverse community impact is anticipated and neither
is a substantial effect on the national balance of payment to be expected.
Impact of New Source Performance Standards
The analysis based on these standards indicates no adverse effects on the
growth of the industry as a direct consequence of the proposed new source
standards. Even in the absence of these standards, growth would at best
be slow. The additional capital and operating costs arising from the BFT
and BAT effluent guidelines should not significantly affect the price
structure and market competitiveness of the respective products; nor is
it expected that these costs, of themselves, would constitute a signifi-
cant inducement for U.S. manufacturers to preferentially locate new facil-
ities at foreign sites, with its consequent potentially adverse effects
on the national balance of trade and payments (and loss of related domes-
tic employment).
ix
Arthur D Little Inc
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INDUSTRY SUMMARY
Industry: Asbestos Industry
SIC CoUu: 3292
Segment: Asbestos-Cement Pipe
0 Plants in segment About 15
Z Total plants in industry . , . 18.82
1 Plants direct discharging . . 2
Z Total plants in segment . . . 13%
0 Plants with BPT treatment in place . . .
X Total plants in segment ........
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost . . . .
Total capital expenditures
. as % of average annual
investment .......
Total capital expenditures
as % of total capital in
place .........
fnnualized costs for segment
Total incremental increase
including capital charges
Total incremental increase
excluding capital charges
Total incremental increase
including capital charges
as % of sales
EX1ECTED PRICE INCREASE
Expected increase due
pollution control .
to
PLANT CLOSURES
Total closures anticipated .
X reduction of segment
capacity due to closures
EMPLOYMENT
Total // of employees affected
% of total employees in
segment
COMMUNITY EFFECTS
IMPACT ON INDUSTRY GROWTH
BALANCE OF TRADE EFFECTS
6 (with BPT or better)
40%
BPT
$700,000
14.SZ*
N.A.
§345,000
$317,400
0.22%
None
0
0
0
0
None
None
None
BAT*
$1,668,000
34.5Z#
N.A.
$604,000
$555,680
0.38%
None
0
0
0
0
None
None
None
• *Assuraes single-step up-grading to BAT standards without BPT intermediate.
j?Based on average annual investment equivalent to 3.1% of annual sales for
the SIC 3292 category (U.S. Bureau of the Census historical data).
X
Arthur D Little; Inc
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INDUSTRY SUMMARY
Industry: Asbestos Industry
SIC Code: 3292
Segment: Asbestos-Cement Sheet
# Plants in segment About 14
2 Total plants in industry . . . 17.52
II Plants direct discharging . . 5
X Total plants in segment . . . 352
it Plants with BPT treatment in place ... 2
2 Total plants in segment 14.32
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost . . .
Total capital expenditures
as 2 of average annual
investment
Total capital expenditures
as % of total capital in
place
Annualized costs for segment
Total incremental
including capita
Total incremental
excluding capita
Total incremental
including capita
as % of sales
increase
1 charges
increase
1 charges
increase
1 charges
EXPECTED PRICE INCREASE
Expected increase due to
pollution control . .
PLANT CLOSURES
Total closures anticipated . .
% reduction of segment
capacity due to closures . .
EMPLOYMENT
Total # of employees affected
2 of total employees in
segment ..........
COMMUNITY EFFECTS
IMPACT ON INDUSTRY GROWTH
BALANCE OF TRADE EFFECTS
BPT
. $655,000
21.12*
N.A.
$472,000
$434,240
0.472
None
1
12
30
12
Not Significant
None
None
BAT*
$1,434,000
46.232#
N.A.
$1,152,000
$1,059,840
1.22
None
1
12
30
12
Not Significant
None
None
•Assumes single-step up-grading to BAT standards without BPT intermediate.
tfBased on average annual investment equivalent to 3.12 of annual sales for
the SIC 3292 category (U.S. Bureau of the Census historical data).
xi
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INDUSTRY SUMMARY
Industry:
SIC Code:
Asbestos Industry
3292
Segment: Aabeatoa Paper
1 Plants in segment About 12
2 Total plants in industry . . . 15X
# Plants direct discharging . . 2
X Total plants in segment . . . 16.71
f Plants with BPT treatment in place ... 10
X Total plants in segment ........ 83.31
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost . . . .
Total capital expenditures
as % of average annual
investment
Total capital expenditures
as X of total capital in
place
Annualized costs for segment
Total incremental increase
including capital charges
Total incremental increase
excluding capital charges
Total incremental increase
including capital charges
as % of sales
EXPECTED PRICE INCREASE
Expected increase due to
pollution control
PLANT CLOSURES
Total closures anticipated •
% reduction oC segment
capacity due to closures
EMPLOYMENT
Total 1! of employees affected
% of total employees in
segment
COMMUNITY EFFECTS
IMPACT ON INDUSTRY GROWTH
BALANCE OF TRADE EFFECTS
BPT
$650,000
20.7Z#
N.A.
$190,000
$174,800
0.185;
BAT*
$1,253,000
39.9X*
N.A.
$614,000
$564,880
0.64X
Not Significant Not Significant
0
0
0
0
None
None
None
1
0.3%
15
2.4Z
None
None
None
*Assumes single-step up-grading to BAT standards without BPT intermediate.
#Based on average annual Investment equivalent to 3.IX of annual sales for
the SIC 3292 category (U.S. Bureau of the Census historical data).
xii
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INDUSTRY SUMMARY
Industry: Asbestos Industry
SIC Code: 3292
Segment: Asbestos Millboard
9 Plants in segment About 7
X Total plants in industry . . . 8.82
# Plants direct discharging . , 2
X Total plants in segment . . . 28.65;
// Plants with BPT treatment in place ... 2
% Total plants in segment ........ 28.6%
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost . . . .
Total capital expenditures
as X of average annual
investment . .
Total capital expenditures
as X of total capital in
place
Annualized costs for segment
Total incremental increase
including capital charges
Total incremental increase
excluding capital charges
Total incremental increase
including capital charges
as % of sales
EXPECTED PRICE INCREASE
Expected increase due to
pollution control . . .
PLANT CLOSURES
Total closures anticipated
% reduction of segment
capacity due to closures
EMPLOYMENT
Total tf of employees affected
% of total employees in
segment .....
COMMUNITY EFFECTS
IMPACT ON INDUSTRY GROWTH
BALANCE OF TRADE EFFECTS
BPT
$147,000
55.3%#
N.A.
, $90,000
$62,800
1.04%
BAT*
$147,000
55.3%'
N.A.
$90,000
$82,800
1.042
Not Significant Not Significant
2
22%
240
22%
Not Significant
None
None
2
22%
240
22%
Not Significant
None
None
•Assumes single-step up-grading to BAT standards without BPT intermediate.
tfBased on average annual Investment equivalent to 3. 1Z of annual sale;; for
the SIC 3292 category (U.S. Bureau of the Census historical data).
Xili
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•INDUSTRY SUMMARY
Industry:
SIC Code:
Asbestos Industry
3292
Segment: Asbestos Roofing
# Plants in segment . . . .
X Total plants in industry .
9 Plants direct discharging
X Total plants in segment
About 10
12.52
6
60X
$ Plants with BPT treatment in place
X Total plants in segment
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost ....
Total capital expenditures
as % of average annual
investment . .
Total capital expenditures
as % of total capital in
place 4 ....... .
4 (with BPT or better)
402
Annualized costs for segment
Total incremental increase
including capital charges
Total incremental increase
excluding capital charges
Total- incremental increase
including capital charges
as X of sales ......
EXPECTED PRICE INCREASE
Expected increase due to
pollution control - .
PLANT CLOSURES
Total closures anticipated . .
% reduction of segment
capacity due to closures . .
EMPLOYMENT
Total # of employees affected
X of total employees in
segment . .
COMMUNITY EFFECTS
IMPACT ON INDUSTRY GROWTH
BALANCE OF TRADE EFFECTS
BPT
5103,000
57.92#
N.A.
$47,000
$43,240
0.812
BAT*
$256,000
143.ez*
N.A.
$69,000
$63,480
1.202
Not Significant Not Significant
0
0
0
0
None
None
None
0
0
0
0
None
None
None
*Assumes single-step up-grading to BAT standards without BPT intermediate.
JBased on average annual investment equivalent to 3.12 of annual sales for
the SIC 3292 category (U.S. Bureau of the Census historical data).
xiy
Arthur D Little Inc.
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INDUSTRY SUMMARY
Industry:
SIC Code:
Asbestos Industry
3292
Segment: Asbestos Floor Tile
# Plants In segment , About 22
X Total plants in industry . . . 27.5%
t Plants direct discharging . , 17
X Total plants in segment ... 77.3%
it Plants with BPT treatment in place ... 5
X Total plants in segment ........ 22.72
COST OF POLLUTION ABATEMENT
Capital costs for segment
Total capital cost
Total capital expenditures
* as Z of average annual
investment . ,
Total capital expenditures
as % of total capital in
place ....
Annualized costs for segment
Total incremental increase
including capital charges.
Total incremental increase
excluding capital charges
Total incremental increase
including capital charges
as X of sales
EXPECTED PRICE INCREASE
Expected increase due to
pollution control
PLANT CLOSURES
Total closures anticipated . .
% reduction of segment
capacity due to closures . .
EMPLOYMENT
Total il of employees affected
X of total employees in
segment
COMMUNITY EFFECTS
IMPACT ON INDUSTRY CKOWTH
BALANCE OF TRADE EFFECTS
BPT
$673,000
11.9%#
N.A.
$245,000
$225,400
0.1Z
BAT*
$1,752,000
30.92*
N.A.
$357,000
$328,440
0.2%
Not Significant Not Significant
0
0
0
0
None
Hone
None
0
0
0
0
None
None
None
¦''Assumes single-step up-grading to BAT standards without BPT Intermediate.
/(Based on average annual Investment equivalent to 3.1% of annual sales for
Che SIC 3292 category (U.S. Bureau of the Census historical data).
xy
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FART I: INDUSTRY STRUCTURE
Arthur D Little Inc
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TYPES OP FIRMS
According to the 1967 U.S. Census of Manufactures , 81 firms (opera-
ting 138 establishments) were involved in asbestos products manufacturing,
(SIC 3292). The distribution of these facilities as a function of the
legal organization structure of the controlling finis is shown in Table 1.
It is evident that corporations dominate the asbestos manufacturing in-
dustry, controlling about 84 percent of the physical facilities and about
99.5 percent of the workforce of the asbestos products sector. It is not
certain what proportion of these firms are public corporations. The
participation of the individual owner or partnerships is negligible.
Shown in Table II is a grouping of the facilities in terms of the
types of operations. Multi-unit corporations dominate the asbestos
products manufacturing industry and provide most of the employment, ac-
counting for about 96 percent of the total employment.
In evaluating the asbestos products manufacturing industry, one easily
arrives at the conclusion that it is disproportionately dominated by a
few giant firms. These are listed in Table III, along with the estimates
of their total number of employees, annual sales, principal asbestos-
related products, and major asbestos manufacturing facilities. Note that
the total employment and sales shown do not necessarily reflect only
asbestos-based manufacturing since these large firms are generally diver-
sified into other product lines. Table IV shows the proportions of the
major manufacturers' product lineB that are related to asbestos.
It is estimated that there are presently about 80 firms engaged in
asbestos products manufacture. The historical trend in the number of
firms is shown in Table V and Figure 1.
To illustrate the intensive domination of the industry by a few select
firms listed in Table III, Table VI shows the historical trends in the
percentages of the industry's shipments accounted for by the largest
companies. The four largest producers have historically accounted for
well over 50 percent of the industry (value of) shipments. For the
eight largest firms, the figure Is consistently about 75 percent. It is
believed that these distributions are still viable in 1973.
A useful yardstick for measuring the level of plant and product
diversification of the asbestos manufacturing industry is the "speciali-
zation ratio" which is a measure of the extent to which plants classified
in this industry specialize in making asbestos products. To derive this
factor, the value of shipments of asbestos products by plants in this
industry segment is expressed as a ratio of the total shipments of all
products made by these plants. Another useful criterion is the "coverage
ratio1' which measures the extent to which all shipments of asbestos
products are made by plants classified In this industry, as distinguished
from secondary producers elsewhere; in other words, the value of shipments
of asbestos products made by plants classified in this industry expressed
as a ratio of the total shipments of asbestos products made by all producers,
both in and out of the asbestos products manufacturing industry.
1-A
Arthur D Little Inc
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TABLE I
DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING
FACILITIES BY LEGAL ORGANIZATIONAL FORM
Industry Sector
Asbestos Products
Form of
Organization
No. of Facilities
with 20 Or
Total more employees
Corporate 116
Noncorporate 6
Administrative
Records
Total
16
138
99
99
Total Number
of Employees
21,200
< 50
< 50
*21,300
Source: 1967 U.S. Census of Manufacturers
TABLE II
DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING
FACILITIES BY TYPES OF OPERATION
Industry Sector
Asbestos Products
Type of
Operation
Multi-unit
corporations
Single-unit
corporations
Single-unit
non-corporations
Administrative
Records
Total
Source: 1967 U.S. Census of Manufacturers
No. of Facititiet
Total
89
27
6
16
138
of 20 or more
employee!
84
IB
0
99
Total Number
of Employees
20,400
800
< 50
< 50
-21,300
Arthur D Little; Inc.
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TABLE III
THE MAJOR ASBESTOS MANUFACTURING FIRMS AND PLANTS IN THE UNITED STATES
Company
Total Number of
Employees
Estimated Annual
Sales ($000.000)
Principal Asbestos-Based
Products Manufactured
Plants/Establishments Manufac-
turing AsbestosProducts
American BiLtrite Rubber Corp. about 4,500; 20%
involved in as-
bestos products
Armstrong Cork Co.
21,000; about 80%
involved in asbes-
tos products
161-0
550.0-600.0
Floor tiles
Gaskets & insulating
materials; vinyl asbes-
tos tile
14 plants involved to some degree
in asbestos manufacturing
Fulton, K. Y.
Jackson, Misa,
Kankakee, 111.
Lancaster» Pa.
South Gate, Cal.
Certain-Teed Products Corp.
7,600
332.0
Roofing products; asbes-
tos-ceraent pipes & fit-
tings
Santa Clara, Cal.
Riverside, Cal,
Ambler, Pa.
Hlllsboro, Texas
St. Louis, Mo.
The Flintkote Company
11,300
441.0
Asbestos-cement pipe;
vinyl asbestos tiles;
roofing products
Los Angeles, Cal.
Chicago Heights, III.
Hew Orleans, La.
Ravenna, Ohio
Chillicothe, Ohio
CAF Corporation
20,000
Its subsidiary,
Ruberoid, is probably
the sole producer of
asbestos producta
768 *0
Asbestos-cement products
vinyl asbestos tiles;
roofing products; asbes-
tos paper
Mobile, Ala.
Long Beach, Cal.
Joliet, III.
Millis; Mass.
St. Louis, Mo.
South Round Brook, N. J.
Vails Gate, N. Y.
Erie, Pa. (two plants)
Whitehall, Pa.
Houston, Texas
-------
TABLE IH, continued
Company
Total Number of Estimated Annual
_ Emp loyees Sale s _( $000,.0001
Principal Asbestos-Based
Produc t sManu f ac t ured
Plants/Establishments Manufac-
turing Asbestos Products
Jim Walter Corp.
1,000 in asbestos
products manufacture
882,0
Roofing materials
Johns-Manvilie Products Corp.
25,200
796.0
Nicolet Industries, Inc,
National Gypsum Co.
350
14,500
15.0
519.0
Asbestos-cement products;
asbestos roofing; asbes-
tos insulating materials;
millboard
Asbestos paper;
asbestos millboard
Asbestos-cement products;
Asbestos roofing; insulat-
ing board
Perth Amboy, W. J.
Linden f N. J .
Memphis» Tenn.
Lockland, Ohio
Miamtsburg, Ohio
Wilmington, Del.
Houston, Texas
Tampa, Fla.
Cincinnati, Ohio
Nashua, N, H.
Manville, N, J.
Pittsburg, Cat.
Stockton, Cal+
WauVegan, 111.
Marrero, La.
Long Beach, Cal.
Los Angeles, Cal,
Green Cove Springs, Fla.
Savannah, Ga.
Billerica, Mass.
Tilton> N. H.
Denison, Texas
Forth Worth, Texas
Ambler, Pa.
Norristown, Pa.
Hamilton, Ohio
New Orleans, La.
Hlllingt^n, N. J.
Mobile, Ala.
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TABLE IV
ASBESTOS-BASED ACTIVITY OF THE MAJOR
ASBESTOS-MANUFACTURING COMPANIES
Company Eitimated Annual Sales Percent of Product Line
($000,000) Relatad to Atbettos
American Bittrite Rubber Co. 161 5
Armstrong Cork Co. 600.0 50
The Flintkote Co. 441.0 20
GAF Corp, 768.0 5
Johns-Manville Corp. 796.0 30
National Gypsum Co. 519.0 10
Jim Walter Corp. 882.0 12
Source: Company and Trade Reports and Contractor's Estimates
The historical trends in these ratios are shown in Table VII. It is
evident that plants in this industry tend to be very specialized, with
about 90 percent of their shipments accounted for by asbestos products.
The coverage ratio indicates that asbestos products manufacturers histor-
ically capture over 90 percent of the market for their primary products.
A review of the sources of primary asbestos fiber Indicates that
some of the major asbestos manufacturers are integrated backwards to the
mines. These are firms of the vertical type which exercise substantial
control over their raw materials sources. The mines owned and/or oper-
ated by asbestos manufacturers are shown in Table VIII.
TYPES OF PLANTS
As discussed previously, asbestos products manufacturing facilities
are characterized by very high specialization ratios (90 percent). Thus
the typical plant (especially of the minor manufacturers) is apt to be a
single-product operation whose product is geared to service a specific
industry within a restricted geographical region.
A survey of selected facilities show9 that nearly all the large
plants employing in excess of 100 workers belong to the major firms with-
in the industry, such facilities also often generating relatively minor
proportions of non-asbestos products.
5
Arthur D Little Inc.
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TABLE V
TRENDS IN THE NUMBER OF
ASBESTOS PRODUCTS MANUFACTURING COMPANIES
Product
Asbestos Products
Year
1947
1954
1958
1963
1967
1973
Number of Companies
85
74
69
73
81
80
Sources: 1947-1967 1967 U. S. Census of Manufacturers
1967-1973 Contractor's Estimates
TABLE Vi
PROPORTION OF SHIPMENTS ACCOUNTED FOR
BY THE LARGEST COMPANIES
Product
Asbestos Products
Year
1954
1958
1963
1966
1967
Percent of Value of Shipments Accounted for By;
A I 20 50
Largest Companies
60
59
56
56
55
77
76
76
74
75
NA
95
95
MA
94
NA
99
99+
NA
9
Source: 1967 U.S. Census of Manufacturers
6
Arthur D Little, Inc.
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200
E
a
0
1
E
9
Z
150
100
100
1947 1954 1958 1963 1967 1973
Sourcci: 1947—1967—1967 U.S. Census of Manufactures.
1973 — Contractor's estimates
FIGURE 1 HISTORICAL TREND IN THE NUMBER OF COMPANIES INVOLVED IN ASBESTOS
PRODUCTS MANUFACTURING
7
Arthur D Little Inc
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TABLE VII
SPECIALIZATION AND COVERAGE RATIOS
FOR THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY
Product
lear
Coverage Racio
<21
Asbestos Products 1947
87
90
1954
87
93
1958
89
92
1963
95
91
1967
93
90
Source: 1967 U. S. Census of Manufacturers
The locatlonal characteristics of asbestos products manufacturing
facilities correspond to the major markets served — automotive and
construction industries. Thus, plants tend to be concentrated near the
major metropolitan centers of the United States. The geographical dis-
tributions of the plants of the major manufacturing firms are shown in
Figures 2 to 7 for each of the six product categories of interest.
It is fair to state that the asbestos manufacturing industry in the
United States is very mature, with most of the larger plants well over
25 years old and employing well-established technologies. For instance,
asbestos-cement pipe manufacture was introduced in the United States
about 1928 by the Johns-Manville Corporation at its Waukegan, Illinois,
plant. Except for incorporation of sophisticated controls and materials
handling systems, it is doubtful whether the technology, similar in
principle to that employed in the manufacture of flat or corrugated
sheeting, has changed to any fundamental extent since then. Similar com-
ments may be applied to the manufacture of vinyl asbestos tiles. In
light of the domestic market position of asbestos products, viz-a-viz
competitive materials, it is not expected that any major new facilities
or technologies will be instituted during the remainder of this decade.
8
Arthur D Little Inc
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TABLE VIII
CAPTIVE FIBER SOURCES FOR THE
MAJOR ASBESTOS PRODUCTS MANUFACTURING FIRMS
Company
The Flintkote Co.
GAF Corp.
ASARCO (through CAPCO,
40% owned by ASARCO)
Johns-Manville
Products Corp.
National Gypsum Co.
Jim Walter Corp.
Captive Mine(s)
Flintkote Mines, Ltd.
Quebec (wholly owned
subsidiary)
Captive mines in
Vermont
Lake Asbestos of
Quebec, Ltd.
Canadian Johns-Manville
Co., Ltd. Coalinga
Asbestos Corp., Cal.
(80% interest)
National Asbestos*
Mines, Ltd.
Carey - Canadian
Mines,Ltd.
H. K. Porter Co., Inc. Pacific Asbestos Corp.
Raybestos-Manhattan,
Inc.
General Dynamics Corp.
Union Carbide Corp.
Cassiar Asbestos Corp.
(partial interest)
Asbestos Corp., Ltd.
(54% interest)
Union Carbide Mines,
California
Fiber-Producing Capacity
(short tons/year)
33,000
40,000
150,000
835,000
15,000
60,000
200,000
50,000
110,000
500,000
10,000
National Gypsum is negotiating the sale of its assets to Lake Asbestos
of Quebec, Ltd. Sale is expected to be consummated in September 1973.
9
Arthur D Little Inc
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°**gqZ'
V>--
/ I
)
<^r
/
/ *4f
i
i
s
®*b
-------
**$«,
'on-
rr-
t i
°»«5b?"
C+llt"
1
i
I
ttmStfT
. I
i
i
"••WSE"
! "riufi
I L
I
WloSaoo
I
wlw Sfiicg
FIGURE 3 GEOGRAPHICAL LOCATION OF THE (MAJOR ASBESTOS-
CEMENT SHEET PLANTS IN THE UNITED STATES
11
Arthur D Little; inc.
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>S0k
i I
i
i
I
Kl
t
'"""MuT—-
I
t
s
IOAhqJ
i._.
] ~ WuhudI
f
\ J **ttuu
V
/
*
••—>
p
"«WM?*Kb
S TlTi
i
v-~J.
FIGURE 4 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS
MILLBOARD PLANTS IN THE UNITED STATES
12
Arthur D little Inc.
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1
/ '? - Jk.
, N ( *, DAKOTA ^ —14» _
4 k J \ MINNUOTA
I i J !
j \ ¦ I ( ,
i (. i~ | /
f j * DAKOTA s S WISCONSIN
I I I N ( W.«Tan>
f ***40^ f j foWA ^ I] •'
/ / t""« ' i "^maska^m r.
/ / L~„ j \ J *Y
-------
/t
/
/
/
\
i
s
**4.?
<5
i
\
U>*Hq{~
i
i
"*nwi
I &a»,
I—,
V
s
/
1
-j
I
***«exico
FIGURE 6 GEOGRAPHICAL LOCATION OF THE MAJOR ASBESTOS
ROOFING PLANTS IN THE UNITED STATES
14
Arthur D Little; Inc
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pes,
/ f
' ;
i.
I
I.,
4
/
t
i
-y
i
i
s
\
—[~!.5iKOTA~
I
i
~N. OA*5f A-"
, \ MINNiSOTA
i
(•—r
Ut*h]
COLORADO
f-
"¦*4
IOWA
**'1
i
p..
* kansaT"
\
\
V
s
/
/
I
--JL J
— -
jiissoom \ t '¦ m ¦
: t. \ I y^A-x,' t
I i -> / r \ /
j (. L ^-tfNTUCKV
j V4
TtXAS ; t *»««»• -r , _,-S3S-»-
I Ski
V
\
\
\
6 %
FIGURE ? GEOGRAPHICAL LOCATION OF THE MAJOR VINYL- ASBESTOS
FLOOR TILE PLANTS IN THE UNITED STATES
15
Arthur D Little inc
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NUMERICAL AND PERCENTAGE DISTRIBUTION OF PLANTS, EMPLOYEES AMD PRODUCTION
The numerical distribution of the establishments by size (expressed
in terms of the number of employees) as given by the 1967 Census of
Manufactures is shown in Table IX and depicted graphically in Figure 8.
This distribution is even more skewed when viewed in terms of the
total and cumulative employment per size category. This is illustrated
in Table X and shown graphically in Figure 9. A comparison of Figures
8 and 9 shows that whereas facilities with less than 100 employees account
for 55 percent of the number of asbestos products manufacturing establish-
ments, these facilities employ only about 9 percent of the workforce.
The relatively minor contributions of the less-than-100 employee
facilities in the industry are further illustrated in Tables XI and XII,
and Figures 10 and 11 which show the distribution of total payroll and
value-added-by-manufacture as functions of facility sizes. The segment"
with less than 100 employees per establishment contributes only B.l per-
cent of the payroll and generates only 7.4 percent of the value added by
manufacture. These figures again underline that in terms of economic
impact, those segments of the Industry employing less than 100 workers
per facility exert relatively little influence. The economic punch
appears clearly to rest with the major manufacturing units.
Other economic indicators that support the same thesis are the value
of shipments and the new capital expenditures for the various size cate-
gories — Tables XIII and XIV and Figures 12 and 13. Operations with
fewer than 100 employees account for 8.6 percent of the shipments and a
mere 8.3 percent of the new capital investments.
It should be observed that although the preceding data imply that a
certain number of facilities are in the under-50-employees category, such
small facilities are more apt to be involved in the manufacture of prod-
ucts outside the scope of the present study, i.e. friction materials.
In fact, in view of the relatively low unit value of the products studied—
asbestos-cement pipe and sheet, asbestos millboard, paper, and floor tile,—
coupled with the fact that large throughputs are necessary to economically
justify the continued operation of any facility manufacturing these
specific products, it can justifiably be stated that virtually all the
facilities of any consequence employ in excess of 50 workers.
There is the additional consideration that, for a given asbestos
product, the manufacturing equipment tends to be of a given standard
capacity. Differences in plant capacities are therefore determined ap-
proximately by the number of installed machines, and capacity differences
therefore occur in multiples of one standard machine capacity. As such,
since a machine requires over 50 men to keep it in operation, it becomes
evident why, for the specific products assessed, plants with less than
about 50 employees are the exception.
Since the plants manufacturing a given product may thus be regarded
16
Arthur D Little Inc.
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TABLE IX
ASBESTOS PRODUCTS MANUFACTURE:
DISTRIBUTION OF PLANT SIZES
Average Number Total No. of Cumulative
of Employees Establishments Percent of Total
1
to
4
20
14.5
5
to
9
7
19.6
10
to
19
12
28.3
20
to
49
14
38.4
50
to
99
23
55.1
100
to
249
36
81.2
250
to
499
18
94.2
500
to
999
6
98.6
1000
to
2499
2
100.0
TOTAL
138
Source: 1967 U. S. Census of Manufacturers
TABLE X
ASBESTOS PRODUCTS MANUFACTURING:
TOTAL EMPLOYMENT AS A FUNCTION OF SIZE OF FACILITIES
Average Number Total No. of Cumulative
Percent of Total
1
to
4
40*
0.2
5
to
9
45*
0.3
10
to
19
200
1.1
20
to
49
400
2.7
50
to
99
1,700
9.3
100
to
249
5,600
31.2
250
to
499
6,100
55.1
500
to
999
7,300
83.6
1000
to
2499
4.200*
100.0
TOTAL
25,585
^Contractor* s Estimate
Source: Unless where otherwise indicated,
1967 U.S. Census of Manufacturers
17
Arthur D Little Inc.
-------
e
£
E
%
J3
3
E
3
Z
8
o
H
100
00
60
11
J
A. A
sbestos Produ
rts
§ 40
3
£
5
20
1-4 5-9 10-19 20-49 50-99 100-249 250499 500-999 1000-2499
Average Number of Employee*
D
tr
{L
R
Source: 1967 U.S. Census of Manufactures.
FIGURE 8 CUMULATIVE DISTRIBUTION OF ASBESTOS PRODUCTS MANUFACTURING FACILITIES
AS A FUNCTION OF PLANT SIZE
-------
100
IC
>
=r
c
¦n
D
CT
{L
R
e
>.
o
Q.
E
UJ
o
I-
4-
o
c
s
&
a.
80
60
| 40
jo
3
E
3
o
20
i r.
1
1-4
5-9
10-19
20-49 50-99 100-249 250-499
Average Number of Employe®
500-999 1000-2499
Source: 1967 U.S. Census of Manufactures.
FIGURE 9 ASBESTOS PRODUCTS MANUFACTURING INDUSTRY - CUMULATIVE EMPLOYMENT
VERSUS SIZE OF FACILITIES
-------
TABLE XI
ASBESTOS PRODUCTS MANUFACTURING:
TOTAL PAYROLL AS A FUNCTION OF SIZE OF FACILITIES
Average Number
of Employees
Payroll
($10*)
Cumulative Percent
of Sector Total
1 to 4
0.2
0.1
5 to 9
0.3
0.3
10 to 19
1.0
0.9
20 to 49
2.6
2.4
50 to 99
10.0
8.1
100 to 249
36.9
29.4
250 to 499
42.2
53.7
500 to 999
50.8
83.0
1000 to 2499
29.4*
100.0
TOTAL
173.4
^Contractor's
employee of
estimates on
$7,000
the basis
of
average payroll per
**Contractor's
estimates on
the basis
of
average payroll per
employee of $6,300
Source: Unless where otherwise indicated,
1967 II. S, Census of Manufacturers
as relatively large, size considerations appear inadequate as a criterion
for assessing plant sensitivity to impact arising from the proposed
effluent guidelines. Therefore, the impact analysis will be based on
plant-by-plant assessment of a significant cross-section of the facili-
ties generating a given product.
FINANCIAL PROFILE
The Bureau of the Census data indicate a definite stability in
several important economic indicators for the asbestos product manufac-
turing industry over the past decade. The exceptions are the Increases
since 1967 in the value of shipments and the value of shipments per
employee, and the decline in industry employment. There has also been
a reduced inventory turnover over the last several years, although the
industry's turnover still remains well above the average for manufacturing
20
Arthur D Little !nc
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TABLE XII
ASBESTOS PRODUCTS MANUFACTURING:
VALUE ADDED BY MANUFACTURE AS A FUNCTION OF FACILITY SIZES
Average Number Cumulative Percent
of Employees Total Value of Sector Total
1 to 4 0.4 0.1
5 to 9 0.5 0.2
10 to 19 2.4 0.B
. 20 to 49 5.0 2.1
50 to 99 19.4 7.4
100 to 249 84.2 30.2
250 to 499 98.2 56.9
500 to 999 97.9 83.4
1000 to 2499 60.8* 100.0
TOTAL 368.8
*Contractor1s estimates on the basis of (1967) value added per
employee of $14,470
Source: 1967 U. S. Census of Manufacturers
'Includes only shipment of products within the scope of this report.
21
Arthur D little Inc
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too
to
K>
2
>
80
60
» 40
3
e
3
o
20
1-4
5-9
10-19
20-49 50-99 100-249
Average Number of Employees
250-499 500-999 1000-2499
Source: 1967 U.S. Census of Manufactures.
i
s
o
cr
£L
B
FIGURE 10 THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY - PAYROLL DISTRIBUTION
AS A FUNCTION OF FACILITY SIZES
-------
¦2
3
T>
-a
<
K3
U>
100
80
^ 60
£ 40
J9
3
E
<3
20
J
> f
1-4
5-9
10-19
20-49 50-99 100-249 250-499
Average Number of Employees
500-999 1000-2499
Source: 1967 U.S. Census of Manufactures.
=r
c
¦n
D
C
r*
r»
£L
B
FIGURE 11 THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY-VALUE ADDED BY
MANUFACTURE AS A FUNCTION OF SIZES OF FACILITIES
-------
TABLE XIII
ASBESTOS PRODUCTS MANUFACTURING:
VALUE OF SHIPMENTS VERSUS PLANT SIZE
Average Number
of Employees
Value of
Shipments
($106)
Cumulative
Percent of
Total
1
to
4
0.6
0.1
5
to
9
0.9
0.2
10
to
19
4.2
0.9
20
to
49
11.3
2.5
50
to
99
40.6
8.6
100
to
249
169.3
34.0
250
to
499
186.4
61.9
500
to
999
161.7
86.2
1000
to
2499
92.4*
100.0
TOTAL
667.4
Contractor's estimates based on value of shipments
per employee of $22,000
Source: 1967 U. S. Census of Manufacturers
24
Arthur D Little Inc
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TABLE XIV
ASBESTOS PRODUCTS MANUFACTURING:
NEW CAPITAL EXPENDITURES VERSUS PLANT SIZE
Average Number Capital Expenditures Cumulative
of Employees ($10°) Percent of Total
1
to
4
0.04*
0.2
5
to
9
0.03*
0.4
10
to
19
0.2*
1.5
20
to
49
0.1*
2.1
50
to
99
1.1
8.3
100
to
249
4.2
31.9
250
to
499
6.6
69.0
500
to
999
3.9
91.0
1000
to
2499
1.6*
100.0
TOTAL
17.77
Contractor's estimates based on capital expenditure per
employee equivalent to 1.25 times 1963 Census values
Source; 1967 U. S. Census of Manufacturers
25
Arthur D Little Inc
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to
O-v
t
*«£
ts>
o
.2
•*-
o
£
u
u
a.
100
80
60
2 40
3
E
3
o
20
r
1-4
5-9
10-19
20-49 50-99 100-249
Average Number of Employees
250-499
500-999 1000-2499
Source: 1967 U.S. Census of Manufactures.
>
=r
c
—t
D
tr
{L
R
FIGURE 12 THE ASBESTOS MANUFACTURING INDUSTRY - VALUE OF SHIPMENTS
AS A FUNCTION OF SIZE OF FACILITIES
-------
1-4 5-9 10-19 20-49 50-99 100-249 250499 500-999 1000-2499
Average Number of Employees
. Source: 1967 U.S. Census of Manufactures.
^ FIGURE 13 THE ASBESTOS MANUFACTURING INDUSTRY - THE CAPITAL
C EXPENDITURES VERSUS PLANT SIZE
o
cr
8
-------
in general.
As discussed previously, the products of concern in this study
account for over 80 percent of the total value of shipments of SIC 3292.
Furthermore, the eight largest firms involved in the manufacture of the
subject products currently account for over 80 percent of the value of
sales. The distribution of the total sales of these products among these
eight largest manufacturers are estimated as follows:
Parcent of Total Value
Company of Shipments
Johns Manville Corporation 30-35
Jim Walter Corporation 14-17
Flintkote Company 9-11
Certain-Teed Products Corporation 6-8
Armstrong Cork Company 6-8
GAF Corporation 3.5
National Gypsum 3-5
Nicolet Industries 3-5
Subtotal 80
All Others 20
Since the above companies represent such a high proportion of the
value of product shipments, they were chosen for more detailed financial
analysis. Tables XV to XVII summarize the salient financial statistics
for these companies (where such statistics are available).
COST STRUCTURE
Recognizing that manufacturing costs are very sensitive to, among
other factors, capacity utilization, scale of production, degree of mech-
anization, productivity, etc., — all of which vary in turn with specific
products and plants — it would be meaningful to synthesize a cost struc-
ture for the asbestos products manufacturing industry (S.I.C. 3292) on
the basis of Bureau of the Census data for 1971 and generalizations
developed by examining financial data for the major companies.
The following definitions are necessary to facilitate understanding
of the synthetic costs:
• Materials Includes the costs of raw materials, supplies,
semi-finished goods, fuels, and electric energy.
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TABLE XV
SYNTHETIC INCOME STATEMENT AND BALANCE SHEET
FOR THE ASBESTOS PRODUCTS MANUFACTURING INDUSTRY*
(CIRCA 1971}
INCOME STATEMENT
Cost Item
Materials
Payroll
Depreciation
General Adm, & Sales
Interest & Other Charges
Total
Apparent pre-tax profit
Pre-tax return on stockholders' equity
BALANCE SHEET ($MM)
Assetx
(Value of Shipments: $633MM|
Amount par Dollar Sales
$0.46
0,28
0.03
0.13
0.03
Current
Plant, "
Equip.,
Etc.
252
254
506
Current
Long Term
Debt
Stockholders'
Equity
$0.91
$0.09
Liabilities
125
64
316
506
$ 57MM
18%
Source: Contractor's estimates based on Census data and generalized financial data.
"S.I.C. 3292
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TABLE XVI
FINANCIAL STATUS OF MAJOR COMPANIES IN THE
ASBESTOS PRODUCTS INDUSTRY - 1972
Long-
Company
Approx. No,
Employee*
1972
Sales &
Revenues
Nat Pre-tax
Operating Profit
Cash Flow
Net Working
Cap'l lyr.end)
Total
Assets
Term
Debt
(»% o
Equity
$MM
$ Millions
Johns-Manville
25,000
796
77.5
81.9
123.9
736
9%
Flintkote
9,300
440
24.0
38.2
91.4
360
31%
Armstrong Cork
22,500
685
78.3
68.8
165.6
511
19%
National Gypsum
15,000
519
55.9
49.4
165.2
455
20%
GAF (Ruberoid)
22,000
768
50.4
52.2
208.3
611
37%
Jim Walter
26,000
885
77.0
65.2
200.7
983
45%
Certain-Teed
8,600
393
43.0
35.2
77.1
273
23%
Nicolet Industries
450
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Source: Company and Trade Reports and Contractor's estimates.
Notes: N.A. = Not Available
TABLE XVII
RECENT TRENDS IN MATERIALS AND PAYROLL COSTS FOR THE
ASBESTOS PRODUCTS MANUFACTURING INDUSTRIES
Year Cost (Dollan per Dollar of Sales)
Payroll Materials Combined
1968 0.236 0.424 0.660
1969 0.258 0.447 0.705
1970 0.257 0.459 0.716
1971 0.252 0.460 0.712
Source: Annual Survey of Manufacturers U.S. Bureau of the Census
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• Payroll
All forms of compensation such as salaries, wages
commissions, bonuses, etc.
• Capital
Expenditures
Expenditures of the type chargeable to fixed asset
accounts, and for which depreciation charges are
normally made.
A review of these definitions indicates that they together Incorporate
the important manufacturing cost parameters, except certain elements of
general administration and sales costs as well as interest payments.
These have been estimated in the synthetic costs shown in Table XV. The
resulting 9% apparent pre-tax profit margin is roughly comparable to the
overall average of companies in Table XVI. (However, it must be borne
in mind that these companies produce a variety of products in different
industry segments.)
To derive the capital depreciation, the new depreciable capital
investment made by the industry from 1957 to 1971 ($278.4 million) has
been determined and, to a first approximation, a 15-year straight-line
depreciation has been applied.
Also shown in Table XV is a synthetic balance sheet for asbestos
products manufacturing. The balance sheet is derived by generalizing
industry financial data into the assumption that total assets are about
0.80 times sales, that year-end working capital is typically about 20%
of annual sales, that current assets are twice current liabilities, and
that debt is 20% of shareholders' equity.
The above figures applied to the Census data indicate a pre-tax
return of $57 MM, equivalent to an 18% pre-tax return on equity for the
asbestos products manufacturing industry (S.l.C. 3292) circa 1971.
Asbestos products manufacturing may be characterized as a business
with relatively low fixed costs and relatively high variable costs:
Table XVII shows that materials and supplies in 1971 accounted for nearly
50 percent of the sales dollar. An additional 25 percent is contributed
by payroll. The trends in the cost of these items for the period 1968
to 1971 are shown in Table XVII. Payroll cost per unit of sales appears
to have remained stable over this time span, presumably due to a combin-
ation of higher product prices, reduced manpower requirements, and increased
productivity. Materials costs, on the other hand, have Increased steadily.
As raw materials, utilities, and fuel costs escalate, it can reasonably
be expected that the materials cost trend shown in Table XVII will con-
tinue, further squeezing the apparent pre-tax profit margin of 9 percent
deduced for the industry as a whole. A pretax margin below 9 percent is
typically not considered particularly attractive in manufacturing,
especially with an indicated pre-tax return on investment below 20%, as
in Table XV. If this truly represents the industry average, some product
lines and/or plants obviously may be operating at margins well below this
figure. Any external pressures that threaten to substantially reduce this
margin could then conceivably endanger these segments of the industry.
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PART II: ECONOMIC IMPACT ANALYSIS
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A. PROPOSED EFFLUENT QUALITY STANDARDS
To carry out the objectives of the Federal Water Pollution Control
Act Amendments of 1972, the asbestos products manufacturing industry is
required to achieve by July 1, 1977, effluent limitations consistent with
the "best practicable" control technology (BPT); and by July 1, 1983,
effluent limitations consistent with the "best available" technology- (BAT).
The water effluent quality standards to be attained by that segment
of the asbestos products manufacturing industry that constitutes the
subject of this study were published in the Federal Register on Tuesday,
February 26, 1974, Standards of performance were also prescribed for
new sources (NSF Standards) constructed after publication of the applic-
able regulations. The specific product categories for which effluent
guidelines were developed are:
• Asbestos-cement Pipe
• Asbestos-cement Sheet Products
• Asbestos Paper (starch and elastomeric binders)
• Asbestos Millboard
• Asbestos Roofing
• Asbestos Floor Tile
Appendix A shows for each product category the effluent quality that
satisfies the BPT and BAT standards. In all cases, zero-discharge is
the only standard applicable to BAT. Thus, fresh water taken into plants
equals the sum of water incorporated in wet product and any evaporative
losses. Among the benefits thus realized is a 100 percent reduction of
all pollutant constituents, and where applicable, the chemical oxygen
demands. Zero-discharge is also required in new'sources except for
asbestos-cement pipe and asbestos paper (elastomeric binder) manufacturing
where new source standards are identical to the BPT standards.
B. EFFLUENT TREATMENT TECHNOLOGIES
The technologies described below have been advanced in the Guideline
Development Document as suitable for meeting the standards set forth in
Appendix A.
In all cases, the standards and technologies applicable to new
sources — any sources constructed after January 16, 1974, the publica-
tion date of the proposed standards — at least equal those proposed for
BPT levels.
32-#
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Product Category Applicable Technologies to Satisfy:
Asbestos-cement pipe
Asbestos-cement sheet
Asbestos paper (starch
binder)
Asbestos paper (elas-
tomer ic binder)
Asbestos millboard
Asbestos roofing
Asbestos floor tile
BPT Standards BAT Standards
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
Sedimentation
and pH control
Sedimentation
and pH control
Sedimentation
Sedimentation
100% process
water recycle
Sedimentation
Coagulation and
sedimentation
New Source
Standards
Sedimentation
and pH control
100% process
water recycle
Sedimentation
100% process
water recycle
100% process
water recycle
100% process
water recycle
100% process
water recycle
C. CURRENT LEVELS OF POLLUTION ABATEMENT
To facilitate discussion and understanding of the current state of ap-
plication of the treatment technologies discussed previously, these have
been coded with respect to the various product categories as follows:
Product Category
Code
Explanation
Asbestos-cement pipe
A
No treatment
B
Sedimentation
only
C
(BPT)
Sedimentation
and pH control
D
(BAT)
100% recycle
Asbestos-cement sheet
A
No treatment
B
Sedimentation
only
C
(BPT)
Sedimentation
and pH control
D
(BAT)
100% recycle
Asbestos Paper
A
No treatment
B
(BPT)
Sedimentation
C
(BAT)
100% recycle
Asbestos Millboard
A
No treatment
B
Sedimentation
C
(BPT & BAT)
100% recycle
Asbestos Roofing
A
No treatment
B
(BPT)
Sedimentation
C
(BAT)
100% recycle
Asbestos Floor Tile
A
No treatment
B
(BPT)
Coagulation and Sedimentation
C
(BAT)
100% recycle
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A survey of the asbestos products manufacturing plants shows, for a
cross-section of the industry, the effluent treatment pattern shown in
Appendix B. The existing utilization trend may be summarized as follows
in terms of the percentages of the total number of plants and the total
effluent discharge by each product category.
Product Category
Asbestos -cement Pipe
(Total Discharge =
2.99 x 106gpd)
Asbestos-cement Sheet
(Total Discharge =
1.84 x 106 gpd)
Asbestos Paper
(Total Discharge =
5.3 x 10® gpd)
Asbestos Millboard
(Total Discharge =
1.33 x 106 gpd)
Asbestos Roofing
(Total Discharge =
0.59 x 10® gpd)
Asbestos Floor Tile
(Total Discharge =
1.96 x 10® gpd)
Percentage of Plants Using
Treatment Technology
Alternatives
A B C D
14 43 29 14
38 38 9 15
14 57 29
29 43 28 -
56 33 11
77 23 0 -
Percentage of Discharge
Treated by Technology
Alternatives
A B C D
16 43 41 0
41 51 8 0
21 79 -
38 62 - -
44 56 - -
61 39 -
The above breakdown may be rendered as follows to indicate the
percentage of the existing plants that do not currently meet the BPT and
BAT effluent quality standards.
Product Category
Percentage of Plants Not Now Meeting
BPT Standards BAT Standards
Asbestos-cement Pipe
Asbestos-cement Sheet
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Asbestos Floor Tile
57
76
14
72
56
77
86
85
71
72
89
100
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It is difficult to arrive at a realistic estimate of the proportion
of the total discharge that goes into.public sewerage systems. However,
for those plants with no treatment facilities whatsoever, (alternative
A plants), the following percentages are estimates of the untreated waste
flows in each category that go to public sewers:
Asbestos-cement Pipe -
43%
Asbestos-cement Sheet -
62%
Asbestos Paper
100%
Asbestos Millboard
100%
Asbestos Roofing
81%
Asbestos Floor Tile
84%
D. WATER TREATMENT COSTS
The "typical plant" cost data which constitute the basis for sub-
sequent derivation of the industry water treatment costs and potential
economic impact have been developed on the basis of assumptions discussed
in the Effluent Guideline Development Document.
For each product category, a typical plant was selected on the basis
of a relatively high quality of the treatment facilities, the quantity of
wastewater discharged, the ready availability of cost data, and the
adequacy of verified information regarding the effectiveness of the treat-
ment facility. Waste flows were selected to reflect the condition at the
larger plants for each product category.
Specific applicable control technologies and costs were developed
for plants discharging their effluents into navigable waters. It should
be borne in mind that factors such as age and size of production plants,
level of implementation of in-plant process controls, and specific manu-
facturing processes and practices would directly affect the quality and
quantity of generated effluents and therefore the water treatment costs
at a given facility. Thus, it is acknowledged that, in fact, facilities
do exist with higher than "typical" water treatment costs. However, the
technique of using a "typical" plant as representative of a particular
product category does not either reveal such high-cost plants nor does
it indicate the size of these higher costs.
Additionally, in developing the costs to various plants in a product
category, it is assumed that the only variable that significantly affects
costs is the end-o£-pipe volume of wastewater discharged to the treatment
facility. It is further assumed that the Installed control facilities
require minimum space and thus no additional land requirement beyond that
currently occupied by the manufacturing plant would be involved.
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Appendix C shows the production and effluent discharge data of
plants considered "typical" of each of the product categories for which
treatment costs and technologies were developed.
1: Capital Investment Costs ,
In the derivation of "typical plant" capital investment costs, the
Guidelines Development Document includes all capital expenditures required
to bring the treatment or control technology into operation. Included,
as appropriate, are the costs of excavation, concrete, mechanical and
electrical equipment installed, and piping. In addition, an amount equal
to from 15 to 25 percent of the total of the above was added to cover
engineering design services, construction supervision, and related costs.
Land costs are assumed to be zero.
Table XXI presents the estimated capital investments (in 1971 dollars)
for a range of effluent capacities for the asbestos-cement pipe segpent
of the industry. Using as a basis the capital investment of the typical
plant facility, the corresponding investments for other size treatment
units within the range evaluated were derived using the "six-tenth rule,"
defined as follows:
Capacity of Unit X
10.6
Cost of Unit X = Cost of Typical Unit
Capacity of Typical Unit
where X is the unknown treatment facility.
TABLE XVIII
ASBESTOS-CEMENT PIPE PLANTS:
WATER TREATMENT CAPITAL INVESTMENT AS A
FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (103 Gals/Day)
Capital Investment ($) To Satisfy
BPT Standards BAT Standards
100
250
500*
1,000
1,500
76,500
133,000
201,000
305,000
389,000
116,000
201,000
305,000
462,000
590,000
^Typical Plant Capacity
Source; Based on "typical plant" cost contained in the Guidelines
Development Document.
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Appendices D to H show corresponding capital cost estimates for the
other asbestos product categories. The cost figures shown in these tables
reflect the costs incurred in attaining any of the specified standards,
by facilities that are discharging raw effluent. Thus, a plant that is
currently treating its effluent to less than a given standard would incur
only the additional cost of upgrading its facility to meet the said
standard. To a first approximation, it is assumed that this upgrading
cost equals the difference between the costs of attaining the higher and
lower levels of treatment.
It should be indicated that the decision as to whether a plant not
now meeting the BPT standards should install additional facilities to
satisfy only these standards or expend more funds now to meet the BAT
standards must be made at the corporate level, taking into account the
company's planning strategy and financial position. Where funds are
readily available and where corporate policy justifies it, it may be
advantageous to upgrade in one step to the BAT standards. In other
instances, corporate wisdom may dictate distributing the costs over a
time span stretching to 1983.
2; Annual Treatment Costs
The annual water treatment cost is comprised of the costs of capital,
depreciation, operation and maintenance, and energy and power.
Capital cost is taken, in all cases, as 8 percent of the capital
investment, a figure which is considered reasonably accurate for the
industry. Depreciation is taken on a straight line basis for 20 years,
or 5 percent of the total investment.
Operation and maintenance costs include labor, materials (including
chemicals), solid waste disposal, effluent monitoring, added administra-
tive expense, taxes, and Insurance. Due credit was applied in technol-
ogies involving water recycling. Power costs are based on a rate of
$0,025 per kilowatt/hour.
The annual treatment costs are shown in Appendices I to N for ranges
of effluent treatment capacities for the various product categories. In
the absence of detailed cost breakdown, the operation and maintenance and
energy and power costs are assumed to vary directly with the treatment
capacity, using as a basis the costs of the so-called typical plant.
The variation of treatment cost as a function of capacity is shown
graphically in Figures 14 to 19 for the product categories of interest.
3: Specific Plant Costs and Projected Industry Costs
On the basis of the projected capital and annual treatment costs
shown in Appendices D to N and knowing the treatment technologies cur-
rently being practiced by the surveyed cross-section of the industry as
shewn in Appendix B, estimates have been made, for each plant in the
sampling, of its incurred capital and annual costs to bring its effluents
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Effluent Treatment Capacity, MGD
Source: Based on "typical plant "costs in Guidelines Development Document
FIGURE 14 ASBESTOS-CEMENT PIPE PLANT: WATER TREATMENT COST VERSUS
EFFLUENT TREATMENT CAPACITY
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^ BAT £
tandards
BPT !
tandards
100 200 300 400 500 600 700 800
Effluent Treatment Capacity, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
FIGURE 15 ASBESTOS-CEMENT SHEET PLANT: EFFLUENT TREATMENT COSTS AS A FUNCTION
OF EFFLUENT TREATMENT CAPACITY
39
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0.7
0.6
0.5
0.4
0.3
0.2
250 500 700 1,000 1,250 1,500 1,750
Effluent Treatment Capacity, MGD
Source: Based on "typical plant" costs in Guidelines Development Document
FIGURE 16 ASBESTOS PAPER PLANT: WATER TREATMENT COST AS A FUNCTION
OF EFFLUENT TREATMENT CAPACITY
AO
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1.3
1.2
1.1
a
S
I
I 1.0
$
£
0.9
0.8
l
/-BPT a
/ Statu
ind BAT
ards
I 100 200 300 400 500 600
Effluent Discharge Rate. MGD
Sourca: Based on "typical plant" costs in Guidelines Development Document
700
800
900
>
a
D
£
I
n
FIGURE 17 ASBESTOS MILLBOARD PLANT: WATER TREATMENT COST VERSUS
EFFLUENT TREATMENT CAPACITY
-------
I
J- BAT
Standards
BPT
Standards
f 100 200 300 400 500 600
Effluent Treatment Capacity. MGD
Source: Based on "typical plant" costs in Guidelines Development Document
700 800
900
FIGURE 18 ASBESTOS ROOFING PLANT: WATER TREATMENT COSTS VERSUS
EFFLUENT TREATMENT CAPACITY
-------
EffI uent Treatment Capacity, MG D
Source Based on "typical plant" costs in Guidelines Development Document
FIGURE 19 VINYL ASBESTOS TILE PLANT: WATER TREATMENT COSTS VS. EFFLUENT TREATMENT CAPACITY
-------
in compliance with the BPT and BAT standards. These axe shown respec-
tively in Appendices 0 and P. Each plant's costs are based, where data
are available, on its actual reported effluent discharge rate. In a few
instances where effluent statistics are not available, it has been
assumed that the costs are equivalent to those of the "typical plant"
described in the Effluent Guidelines Development Document, as defined
previously.
After a careful review of the list of plants producing each product
of interest, as well as discussions with informed members of the asbestos
manufacturing community, it is believed that the listed plants account
for the following proportions of the current total shipments of each of
the products evaluated;
Asbestos-cement Pipe
- 95-100%
Asbestos-cement Sheet -
- 90-95%
Asbestos Paper
- 95-1001
Asbestos Millboard
- 95-1001
Asbestos Roofing
- 95-1001
Asbestos Floor Tile
• 60-70%
The capital investment and the annual water treatment costs derived
in Appendices 0 & P may be aggregated and scaled-up to indicate the total
costs to each industry segment of meeting the BPT and BAT standards.
These aggregates are shown in Tables XXII and XXIII. Thus, the manufac-
turers of the products studied can anticipate a total capital investment
of about $3 million and an annual cost of $1,4 million to bring their
facilities in compliance with the BPT guidelines. To meet the BAT
standards, the capital investment and annual costs would escalate to
$6.5 million and $2,9 million respectively.
For purposes of subsequent assessment of the corporate financial
impact of these expenditures on individual companies, these costs have
been assembled for all the product lines of the various plants of the
major asbestos products manufacturing companies. These are shown in
Table XXIV.
Individual companies can anticipate capital investments ranging
from $60,000 to $731,000 to bring their facilities in compliance with
the BPT standards, and from $144,000 to $1.5 million to satisfy the BAT
standards. As for annual costs, these range from a low of $24,000 to a
high of $336,000 to achieve the BPT standards, and from $98,000 to
$776,000 to meet the BAT guidelines.
It is instructive to express these capital expenditures for effluent
treatment in terms of the minimum annual capital outlays of each of the
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TABLE XIX
ESTIMATED TOTAL COSTS TO THE ASBESTOS PRODUCTS MANUFACTURING
INDUSTRY OF MEETING THE BPT WATER EFFLUENT STANDARDS
Product Category Costs Incurred by Costs Incurred by
Listed Plana ($) Toft Industry ($|
Capital
Annual
Capital
Annual
Asbestos-cement Pipe
666,000
327,500
700,000
345,000
Asbestos-cement Sheet
622,000
424,900
655,000
472,000
Asbestos Paper
617,000
180,600
650,000
190,000
Asbestos Milfboard
140,000
85,900
147,000
90,000
Asbestos Roofing
98,000
44,600
103,000
47,000
Asbestos Floor Tile
404,000
147,100
673,000
245,000
Total
$2,928,000
$1,389,000
TABLE XX
ESTIMATED TOTAL COSTS TO THE ASBESTOS PRODUCTS MANUFACTURING
INDUSTRY OF MEETING THE BAT WATER EFFLUENT STANDARDS
Product Category Coats Incurred by Costs Incurred by
Listed Plants ($) Total Industry ($)
Capital
Annual
Capital
Annual
Asbestos-cement Pipe
1,585,000
573,500
1,668,000
604,000
Asbestos-ce merit Sheet
1,291,000
1,036,900
1,434,000
1,152,000
Asbestos Paper
1,190,000
582,800
1,253,000
614,000
Asbestos Millboard
140,000
85,900
147,000
90,000
Asbestos Roofing
243,000
65,900
256,000
69,000
Asbestos Floor Tile
1,051,000
214,300
1,752,000
357.000
Total
$6,510,000
$2,886,000
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TABLE XXI
WATER TREATMENT COSTS, BY COMPANIES, TO MEET
THE BPT AND BAT EFFLUENT STANDARDS
BPT Standards
Company Code
Capital Investment ($)
Annual Coit ($)
AA
560,000
336,000
BB
390,000
199,100
CC
731,000
308,800
DD
156,000
58,800
EE
174,000
44,200
FF
60,000
24,400
GG
237,000
62,100
HH
157,000
110,300
BAT Standard*
AA
1,503,000
776,600
BB
665,000
262.100
CC
1,343,000
775,700
DD
435,000
110,800
EE
395,000
138,000
FF
144,000
162,000
GG
294,000
98,200
HH
256,000
189,400
firms. These ratios are shown in Table XXV, indicating that the new
water treatment capital investments required to comply with the BPT and
BAT treatment levels constitute in general only about 1 percent of the
normal annual capital investment (in all product lines) of these firms.
E. ECONOMIC IMPACT ANALYSIS
1. Methodology
The purpose of the detailed cost analysis conducted above is to
provide the essential basis for arriving at realistic conclusions
regarding the specific impacts of incurred water treatment costs. The
specific economic parameters that are vulnerable to impact, and which
are to be evaluated within the scope of this study are:
i. Product price effects
ii. Financial effects
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iii. Production effects
iv. Employment effects
v. Community effects
vi. Balance of payment effects
TABLE XXII
NEW WATER TREATMENT COSTS {BY MAJOR ASBESTOS PRODUCTS
MANUFACTURING FIRMS) AS A PROPORTION OF
ANNUAL CAPITAL EXPENDITURES
Company Estimated Minimum Naw Watar Treatment Com
Cod" Annual Capital BPT Standard^ 5aY Standard^
Expenditure ($10®)
Amount
% of Total
Amount
% of Total
($106)
Cap. Exp.
($106)
Cap. Exp.
AA
65
0.295
0.5
0.525
0.8
BB
13
0.205
1.6
0.231
1.8
CC
29
0.3B3
1.3
0.469
1.6
DD
30
0.084
0.3
0.154
0.5
EE
45
0.090
0.2
0.140
0.3
FF
0.75-2.0
0.03
1.5-4.0
0.05
2.5
GG
20
0.126
0.6
0.102
0.5
HH
14
0.084
0.6
0.091
0.7
NOTES:
1. Dollar investment is assumed to be funded over a period of two years {1975 and 1976).
2. Funding assumed to be funded over 3 years.
Source: Company Annual Reports and Contractor's Estimates.
It is concluded that whereas certain of these parameters must be
evaluated on a plant-by-plant basis (e.g. community effects), others are
more meaningfully assessed on a corporate basis (e.g. financial effects),
while still others must necessarily be analyzed on an industry-wide basis
(e.g. product price, production, and employment effects). This approach
has the advantage of recognizing disparities due to geographical location,
corporate organization, and the market climate of specific product
categories.
After carefully evaluating several alternative parameters that can
be applied as a measure of economic impact on specific plants, it Is felt
that the most meaningful approach for the group of Industries studied would
be to relate the added annual cost of water treatment required to comply
with a specific standard to the value of sales of a given product at each
47
Arthur D Little, !nc
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plant. It should be recalled that the prior analysis of the cost struc-
ture of the asbestos products manufacturing industry, Part I, based on
aggregate statistics from the U.S. Bureau of the Census, indicated an
apparent pre-tax profit margin of about 9 percent of sales. On the
strength of discussions with persons involved In and knowledgeable of
the asbestos products manufacturing industry, it is reasoned that this
figure can be justifiably applied to the product categories under study.
These discussions also lead to the conclusion that water treatment costs
amounting to more than about 4.5% of sales would make continued operation
of a product line or plant very unattractive. Thus, the subsequent
assessment of the sensitivity of a product line or plant to the added
water treatment costs, and in turn its probability of discontinuing
operations, is based oh how closely these costs approach or exceed 4.5%
of sales. A new water treatment cost in relation to sales of 4.5% or
higher is an indication that a plant or product line is vulnerable.
2. Impact of the BPT Standards
a. Price Effects
The price of a manufactured product is dictated to a large degree
by such economic determinants as manufacturing cost and its variation
among various producers of the same product, demand/supply balance, and
price/performance balance vis-a-vis competitive substitute materials and
imports. The prices of the product categories that form the subject of
this study are liable to be impacted differently by these various con-
siderations and therefore deserve independent evaluations.
Asbestos-cement Pipe. This product is used principally for water-
distribution systems (high-pressure pipe) and for sewer systems (low-
pressure pipe). In the former application, it competes with steel, cast
iron, plastics and concrete; in the latter, it competes with vitrified
clay, concrete, and some cast iron, where it is used as conduit for
telephone or electrical wiring. Asbestos cement is one of the least
costly pipe materials, being only more expensive than locally produced
concrete pipe. This factor should help to retard the penetration of
other pipe products into the existing markets for asbestos cement pipe.
There is also the added fact of considerable inertia to change on the
part of the civil engineering and construction professions. Thus, the
modest growth rate of perhaps 5 to 7 percent per year recently experi-
enced by this product should continue for the next five to ten years.
While the output of asbestos-cement pipe has shown a general upward
trend in recent years, the Chemical and Engineering News quoted price for
the most popular types and sizes of pipe has remained about stagnant, as
shown in Table XXVI. Apparently, the increased cost of raw materials,
supplies, labor, and other manufacturing cost items in the past 5 to 10
years has not been passed on to the consumer. On the one hand, this
may be a reflection of process and practice improvements which have
resulted in increased productivity and lower unit manufacturing costs.
On the other, it may be an indication of a realization, on the part of
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TABLE XXIII
C&EN QUOTED PRICE TREND FOR 6-INCH AND 12-INCH
ASBESTOS-CEMENT PIPE (CARLOAD LOTS)
Date Pipe Diameter Quoted Delivered Price ($)
(Inches)*
Los Angeles
New Orleans
January 1966
6
1.40 per ft.
1.30 per ft.
12
2.19
2.19
January 1968
6
1.60
1.54
12
1.96
1.96
January 1970
6
1.39
1.31
12
2.06
2.06
June 1973**
6
1.38
1.35
12
2.10
2.10
*6-inch municipal water pipe; 12-inch sewer pipe
"Contractor's Estimates
Source: C&EN
asbestos-cement pipe producers, of the rather tenuous price/performance
position of asbestos-cement pipe relative to the competing substitute
materials discussed previously.
Another worthwhile consideration to keep in mind in attempting to
forecast price trends in the asbestos-cement pipe and other asbestos-
based product markets is the role of the largest manufacturer. Speci-
fically for asbestos-cement pipe, it is estimated that at least 50
percent of the sales are attributable to Johns-Manvllle Corporation,
which operates a number of large multi-product plants. It is thus in a
position to benefit from the economics of scale and common facilities,
and, because of its dominant posture, would be expected to become the
price trend-setter in its product and/or market areas.
Fartly off-setting this factor is the fact that asbestos products
plants tend to serve restricted regional markets. Thus it is possible
for prices to be passed-on or frozen regionally, irrespective of the
decisions of the so-called trend-setter whose plants are located outside
the region in question. The analysis herein is not sufficiently specific
or detailed to determine the precise action that probably would be taken
by each individual producing plant.
In light of the above considerations, along with the fact that the
asbestos-cement manufacturing industry's additional annual costs for
49
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meeting the BPI water standards amount to only 0.2 percent of estimated
1972 sales ($345,000 versus $156 million). Table XXII, it is believed
that these additional costs would not, of themselves, result in a signi-
ficant industry-wide increase in prices. Smaller producers in certain
regional markets may be able to pass-on their water treatment costs, but
even in such cases, the resultant price increase would be insignificant,
amounting to only about 1 percent.
Asbestos-cement Sheet. Asbestos-cement sheet refers to a broad
family of corrugated and flat board products used in the construction
industry for roofing and siding. This family of products, in many respects,
has similar properties and market acceptance to the pipe products. It
competes principally with masonry, galvanized steel and aluminum, plastics,
wood, and asphalt. However, it is generally more expensive than corrugated
steel, competitive with aluminum sheets, and less expensive than conven-
tional concrete blocks and built-up roofing.
In the United States, asbestos-cement sheets are used principally for
industrial buildings (particularly fertilizer plants and other applications
where corrosion is a problem), warehouses, and in similar cost-sensitive
markets. It is also used to a limited degree as a siding in the residen-
tial market.
In recent years, the growth of the market for asbestos-cement sheets
in the United States has lagged behind that of the construction industry
in general, amounting to only a few percent per year. It is expected
that only minimal growth in the next five to ten years would occur.
Achieving a higher than nominal growth would be predicated on the level
of effort exerted to exploit the market potential for this product in
the developing nations of Africa, Asia, and South America, since these
are still cost-sensitive markets where high volumes of building, particu-
larly housing, are expected in the years ahead.
A__stagnant market for sheet products is hardly conducive to price
Increases. Accordingly, it is not expected that a price rise as a result
of the additional costs of meeting the BPI effluent standards would occur.
Even if such costs were passed on, they amount to a price increase of
about'0.5 percent of sales, and this is regarded as insignificant.
Asbestos Paper, Millboard, and Roofing. Of these products, the
related products, paper and roofing command markets that are large enough
to deserve attention. Asbestos paper is used for flooring underlay,
pipeline felt, roofing, gaskets, and electrical insulation. These
applications represent growing markets and this trend is expected to
continue. Insulating applications may represent an exception since a
number of synthetic materials may erode the market for electrical paper.
The costs incurred by asbestos paper, millboard, and roofing manu-
facturers to meet the BPT effluent standards amount to 0.2%, 1%, and
0,81 respectively of their sales of these products. Accordingly, one
may justifiably conclude that these costs can be absorbed by the
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manufacturers. Even if they are passed on to the consumer, the resulting
price increase will not significantly alter the market growth rate of
these products.
Asbestos Floor Tile. The asbestos floor tile market has been less
than spectacular in recent years as a result of strong competitive
pressures from such products as carpeting and sheet goods (e.g. linoleum).
This pressure is expected to intensify in the future and should serve as
a damper on price increases. Specifically, the additional cost of water
treatment to bring facilities in compliance with the BPT effluent guide-
lines is estimated at about 0.1% of 1972 sales. This is insignificant
and whether or not it is passed on should not in any way affect the
market situation of asbestos floor tiles vis-a-vis competitive substitute
products.
b. Financial Effects
As indicated earlier, it appears most meaningful to discuss the
financial impact of water treatment costs on a company-by-company basis.
Thus, the estimated capital investment and annualized costs as given
previously on a plant-by-plant basis have been aggregated to derive a
sum total for each of the eight major asbestos products manufacturing
companies. These firms represent the major producers of the asbestos
products of interest, and it is estimated that they account for about
80% of the sales value. The data for the individual companies are
presented in Table XXVII.
TABLE XXIV
WATER TREATMENT COSTS TO MEET PROPOSED STANDARDS
IN ASBESTOS PRODUCTS MANUFACTURING*
Capital investment Capital Charge
+ O&M Annualized
Company Code BPT BAT BPT BAT
SMM
AA
0.56
1.50
0.34
0.78
BB
0.39
0.66
0.20
0.26
CC
0.73
1.34
0,31
0.78
DO
0.16
0.44
0.06
0.11
EE
0.17
0.40
0.04
0.14
FF
0.06
0.144
0.024
0.162
GG
0.24
0.29
0.0$
0.10
HH
0.16
0.26
0.11
0.19
'Unadjusted basis - 197! constant dollars.
Source: Contractor's estimates
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Profitability Effects. Before using the data in Table XXVII which
are in constant 1971 dollars, it should be emphasized that the financial
impact as seen by any individual company will be measured in terms of
current dollars, i.e., as an increase in cost of operations and capital
investment measured in the same dollars as the company's financial results
to be reported in a future accounting period. To a good approximation,
the impact in 1972 dollars may be synthesized by inflating the data in
Table XXVII by 5% and relating the resultant figures to the reported sales
and operating profits of these companies for 1972. This is shown in Table
XXVIII. On the assumption that these water treatment costs expressed in
1972 dollars inflate to 1977 dollars at about the same rate as asbestos
products sales, then the ratios of Table XXVIII will remain relatively
stable. However, even if there is some upward shift, the important point
is that they are so close to zero as to be well within the limits of the
companies' assumed ability to predict year-to-year variations in sales
or profit margin.
TABLE XXV
FINANCIAL IMPACT OF THE BPT STANDARDS ON THE MAJOR ASBESTOS
PRODUCTS MANUFACTURING COMPANIES
Company Code
"Annualized" Cost!
of Treatment (in
1972 Dollars)''
Percent
1972
Total Co.
Sales
Percent of
1972 Total
Oper. Profit
Before Taxes
"Annualized" Costs of
Treatment —1972
Dollars-Expressed In
Terms of Asbestos
Operations Only2
<$MM)
(%>
{%)
% of Sales
AA
0.357
nil
0.5
nil
BB
0.210
nil
0.5
nit
CC
0.326
nil
0.6
nil
DD
0.063
nil
nil
nil
EE
0.042
nil3
nil3
nil3
FF
0.025
nil
1.1E
nil
GG
0.063
nil
nil
nil
HH
0.116
nil
nil
nit
NOTES:
1. Table 6 data {1971 dollars) inflated 5%.
2. That is, dividing Column 2 by estimated asbestos products sales only.
3. Denotes a figure below 0.5%
E = Estimated
Source: Contractors estimates; company annual reports.
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In the last column of Table XXVIII, to estimate the impact of water
treatment costs — not on a company's total sales, but only on its asbes-
tos products sales — these costs have been divided by an estimate of the
aggregate value of each company's 1972 sales of asbestos products of
interest. The calculation in all cases gave a result of under 0,51 of
sales. The actual figures are subject to considerable variation, depending
on actual production levels, transfer prices, and net shipments to market.
However, it is felt that the results presented give a reasonably good
picture of the order of magnitude of the cost impact-in all cases it
appears to be less than 0.5% of sales.
Capital Availability. The range of estimated capital investment
requirements to meet the BPT standards is $0.16 to 0.73 million. This
may be put in the perspective of each company's operation as previously
shown in Table XXV, relating these amounts to each company's level of
total capital spending.
In Table XXV, estimates have been made of the minimum annual levels
of capital expenditures over the near term for each of the companies
studied, based on the recent pattern as reported by each company. To
keep the comparisons on a consistent basis, these minimum assumed levels
are expressed in constant 1972 dollars. The dollar investment require-
ments for water treatment, also exp sssed in constant 1972 dollars, were
obtained from the values in Table XXVII inflated 5%. For comparison with
each company's minimum level of total capital expenditures, one may
assume that the amounts to be spent on water treatment will be spread
over two years (i.e., 1975 and 1976) to meet the BPT standards, and the
amounts required to meet the BAT standards will be funded over a three-
year period.
It is clear from the table that the burden imposed by such capital
investment requirements is not of large proportions when viewed in this
light.
c. Production Effects
Appendices Q to V represent a plant-by-plant compilation, for each
product category, of the water treatment costs required to comply with
the BPT standards as a percentage of the estimated 1972 sales.
Asbestos-cement Pipe (App. Q). Of the 14 plants tabulated, only
eight would incur any expenses to bring their present treatment facilities
in compliance with the BPT standards. As a percent of sales, these
expenses range from 0.02 to 1.3%. As such, it is not expected that any
of these plants would be liable to adverse production impact as a result
of the added cost of meeting the BPT effluent guidelines.
Asbestos-cement Sheet (App. E). All but 3 of the 13 plants surveyed
would incur annual expenses, ranging from 0.05% to 4.1% of sales, to meet
the BPT standards. Potentially, the maximum impact would be experienced
by SS-3, a very small plant with about $1 million in sales, located in
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Che Southern United States or Puerto Rico.
Asbestos Paper (App. S). Only two plants, out of 12, will be required
to up-grade their facilities to meet the BPT standards. For these, the
expenditures amount to 1.44% and 0.75% of sales, and they are thus not
considered economically sensitive to the additional costs of upgrading
these facilities.
Asbestos Millboard (App. T). The effluent standards for the asbestos
millboard segment of the industry are identical for BPT and EAT levels of
treatment. This may be considered a disadvantage by the industry since
the period over which the costs of meeting the BAT standards may be spread
is correspondingly reduced. For this segment alone, therefore, the two
plants whose added water treatment costs amount respectively to 4.9% and
3.5% of their annual sales are considered as being relatively sensitive
to the BPT standards. EM-1 is a small facility located in the Eastern
United States with annual millboard sales of about $0.8 million. Similarly,
EM-3, a slightly larger facility with annual sales of $1.1 million, is
located in the Eastern United States.
Asbestos Roofing (App. U). As indicated previously, asbestos roofing
constitutes a very small fraction (perhaps less than 2%) of the total
roofing market. Thus, asbestos roofing may be considered a "specialty"
product. Appendix U shows that for those facilities whose effluents do
not currently meet the BPT guidelines, the annual expense of upgrading
these facilities ranges from 0.4 to 2.3% of sales. These product lines
are not considered vulnerable to shutdown or production curtailment by
reason of these added costs.
Asbestos Floor Tile (App. V). It can be stated that, for this
product category, the annual water treatment costs for meeting the BPT
guidelines are insignificantly small in comparison to annual sales,
ranging up to 0.24% in the worst case. Thus, no plants are considered
sensitive to these additional costs.
In summary, therefore, these analyses have identified the following
plants or product lines as being potentially vulnerable as a result of
the BPT effluent guidelines:
Plant Code
SS-3
EM-I
EM-3
Product
Sheet
Millboard
Millboard
Location
Southern U.S."
Eastern U.S.**
Eastern U.S."
Annual Sale*
of Product
(»106)
1.0
0.77
1.1
Additional Annual
Water Treatment Cost
$40,900
38,000
38,000
"Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Texas, Puerto Rico
"Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania
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It may be observed that these are relatively small plants or product
lines. As such, all other things being equal, the potential impact on
the national markets for their specific product lines, as a result of
these plants curtailing or ceasing production, is expected to be minimal.
It may be observed parenthetically that the apparent and potential pro-
duction loss represented by the closure of these plants should not
translate into increased imports of these products. Ordinarily, other
domestic producers (now operating at about 70 percent of capacity) would
be expected to take up this relatively small slack in supply. Further-
more, it is unlikely that foreign producers, in light of the relatively
high freight rates involved, would be attracted by such low-value products.
d. Employment Effects
According to the U.S. Bureau of the Census, the asbestos products
manufacturing industry (SIC 3292), which includes asbestos-cement products,
roofing, textiles, floor tile, and friction materials, in 1971 employed
a work-force of 18,900, a decrease of 19 percent from the 1969 total.
It is believed that the attrition in the number of employees is con-
tinuing at a reduced rate, and therefore 1973 employment is estimated at
about 17,000. The product lines under study - asbestos-cement pipe and
sheet, asbestos paper, roofing, and millboard, and asbestos floor tile -
probably account for 80 percent of the total workforce, or 13,600
employees.
The three plants or product lines previously identified as potentially
vulnerable employ a total workforce estimated at about 270, equivalent to
about 2 percent of the total employment of the product categories studied.
Accordingly, it may be concluded that the impact of the BPT effluent
standards, in terms of employment reduction, is minimal for the industry
as a whole.
e. Community Effects
As discussed previously, the sheet plant identified as potentially
sensitive to the costs of meeting the BPT guidelines is located in the
Southern region of the United States (which includes Puerto Rico). The
Manpower Administration of the United States Department of Labor has, as
of June 1, 1973, classified the municipality in which this plant is
located as an area of "substantial unemployment."* Its unemployment rate
is 20 percent, an increase from 17 percent in March 1972. It may thus be
concluded that, in this case, closing of the sheet plant would aggravate
an already serious local unemployment situation. Furthermore, because
there is only a limited number of other manufacturing activities in the
immediate vicinity of the sheet plant, we believe dislocated workers will
not readily obtain other employment here in the short-run. Admittedly,
•A tabor area in which the current and anticipated local labor supply substantially exceeds labor
requirements. An area is placed in this category when (1) unemployment equals or exceeds 6% of its
work force and (2) it is anticipated that the rate of unemployment during the next two monthswill remain
at 6% or more.
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closure of this plant will result in undesirable personal impact on the
laid-off workers, but in terms of the entire community, it is not expec-
ted that the event of closure will exert any significant impact.
The impact-sensitive millboard plant, EM-1, is located in one of
the industrial Eastern states. However, the area in which it is located
has, in the last decade, witnessed a massive erosion of its industrial
base, largely the result of imports and the perfection of man-made
substitutes for the major products manufactured. The area is accordingly
classified as one of "persistent unemployment,"** its March 1973 unem-
ployment rate being 10.4%. Furthermore, the prospects for new industry
in the area are not bright. In January 1973, the total non-agricultural
employment in the immediate area around the plant was reported as 133,000.
Again, one must conclude that the possible addition of workers dislocated
from the millboard plant to the unemployment roster of about 13,000 would
not generate noticeable community impact.
The second millboard plant liable to impact, EM-3, is also located
in an Eastern U.S. industrial state. Its labor area has a moderate
unemployment rate (4.2%). Furthermore, there is a concentration of manu-
facturing and service industries which could absorb dislocated employees,
and no net loss of industry is anticipated in the next five years.
Accordingly, the community impact due to the possible closure of this
facility would be considered minimal.
f. Balance of Payments Effects
Table XXIX depicts the recent trends in the values of U.S. exports
and imports of manufactured asbestos products, including the products
covered by this study. Clearly, the trend has been in favor of the
United States, and this favorable balance should continue In
the future. In fact, there is reason to believe that if it so desires,
the U.S. asbestos products industry may advantageously participate in
the growth of consumption of asbestos-based products forecast for the
balance of this century in the developing nations of the world. For
instance, the market for sewer and water-distribution systems is con-
sidered to be attractive in these countries, many of which have no basic
sewer and water systems and, as their economies develop, and as they
obtain financial support from International agencies such as the United
Nations and the World Bank, the demand should continue to grow for large-
diameter pipes for both sewer and water systems. Similar comments may
be made regarding the future demand in these countries for sheet, roofing,
paper, and tiles.
The implementation of the BPT effluent standards, by itself, should
not alter the validity of the above observations. One may therefore
project a very favorable trade balance on asbestos products, regardless
of any price effects due to these standards.
¦"Generally indicative of an average unemployment rate of at least 50% above the national average for at
least 1 of the preceding 2 calendar years.
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Partly moderating the optimism implied above is the recent trend
in the value of manufactured asbestos product imports as shown in Table
XXIX. It has increased from $8.8 million in 1969 to $11,3 million in
1972, and it is expected that this trend will continue as such other
asbestos products sources as Europe, Japan, and Mexico seek to keep their
trade with the U.S. in balance by shipping asbestos-cement pipes, tex-
tiles and other asbestos articles into the United States. Another
inducement is the increasing popularity of low "back-haul" rates charged
by freighters returning to the U.S. after delivering more valuable
materials to European and Japanese markets.
TABLE XXVI
RECENT TRENDS IN VALUE OF U.S.
EXPORTS AND IMPORTS OF
MANUFACTURED ASBESTOS
PRODUCTS
Year Value
-------
Asbestos Paper
- 0.6%
Asbestos Millboard - 1.0%
Asbestos Roofing - 1.1%
Asbestos Floor Tile - 0.1%
These costs are small enough to be absorbable in the short run.
As such, it is not anticipated that implementation of the BAT standards
would, of themselves, result in a noticeable increase in the price of
the above products.
b. Financial Effects
Profitability. Based on the data in Table XXVII certain companies
will see sharply higher water treatment costs under the 1983 standards.
For the BAT impact, the contractor's estimates and calculations
indicate the following:
Annualized Water Treatment Costs*
As a Percent
of 1972 Oper-
ating Profit
As a Percent
Company Code
Before Taxes
of 1972 Sales
AA
1.06%
nil
BB
0.6%
nil
CC
1.63%
nil
DD
nil
nil
EE
nil*11
nil**
FF
7.17%
0.64%
GG
nit
nil
HH
nil
nil
*1972 dollars
** Less than 0.5%
Undoubtedly, Company FF's profits will be impacted by the BAT costs.
However, the magnitude of cost involved represents only 0.64% of this
company's sales — on a no-growth, constant 1972 dollar basis. Thus,
other things equal, company FF's impact would be lessened to the extent
it could pass along a cost increase of this magnitude.
If these calculations are of the correct order of magnitude, it
seems clear that the variation in the profitability of asbestos manu-
facturing caused by water treatment costs to meet the BAT standards will
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be quite small in comparison with that from the other factors with which
management must contend.
Capital Availability. Referring again to Table XXV, one may make a
similar comment, in respect to capital investment requirements to meet
the BAT standards, as was made above in respect to the impact of water
treatment costs on profitability. That is, the requirement for capital
funds appears small in dollar terms. Company FF has a relatively larger
requirement, but one which is not regarded as necessarily outside of
normal fluctuations in a company's capital expenditure program over a
period of years. Accordingly, the considerations of cash flows and
debt-to-equity ratios which would be important in assessing the companies'
abilities to meet large scale new capital spending plans are not called
for here. The picture is rather one in which the expenditures called
for can probably be accommodated easily within the regular corporate
planning and budgeting framework - although it cannot be suggested that
they would be viewed in the same light as investments In new capacity. One
might add that, as a result of favorable tax rulings, there has been a sharp
increase in the use of tax-exempt pollution control revenue bond financing
by industry in the last 12-18 months. The evidence suggests that an even
greater utilization of this type of financing will occur in the future.
This represents a new dimension in corporate finance and additional
flexibility for management in meeting pollution abatement requirements.
c. Production Effects
It is instructive to repeat a prior hypothesis that an asbestos
product manufacturing facility would be considered economically sensitive
if its additional annual water treatment costs required to comply with
the BAT standards exceed about 4.5% of annual sales of that product.
Accordingly, the following discussion will consider each product line
in accordance with the above criterion.
Asbestos-cement pipe (App. W). Only 2 of the 14 listed plants are ¦
already in compliance with the BAT standards. Of those requiring an up-
grading of their treatment facilities, estimates of the involved costs
show that the necessary expenditures in most cases amount to less than
1% of the annual sales. Thus, no production curtailment or cessation is
anticipated in the asbestos-cement pipe segment as a result of implemen-
tation of the BAT effluent standards.
Asbestos-cement sheet (App. X)» As with the 1PT standards, only one
sheet plant, SS-3, is susceptible to adverse economic impact from the BAT
standards. On the basis of estimated 1972 statistics, the loss of this
plant, if this should occur, would result in a production loss of only
4,000 tons (about 1% of total production), - an output which can be
easily generated by other plants which are currently operating at less
than full capacity.
Asbestos paper (App. Y). On the basis of the criterion set forth
above, only one plant, ER-1, with annual sales of $0.3 million on an
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output of 750 tons, may be regarded as potentially threatened by the
BAT standards. The potential production loss would thus be equivalent
to only 0.3% of the total estimated 1972 industry output of 230,000 per
year. Obviously, this potential production deficit can be readily made
up by the unimpacted plants.
Asbestos millboard (App.T). Since the BPT and BAT standards for
this product are identical, the comments made under the BPT treatment
effects are equally applicable here. Therefore, EM-1 and EM-3 may be
considered as potential candidates for shutdown as a result of the BAT
standards.
Asbestos roofing (App. Z). According to the pre-established criteria,
no asbestos roofing plant is considered susceptible to impact from the
BAT standards since the maximum annual cost incurred by an individual
plant or product line is 3.2% of sales.
Asbestos floor tile (App. AA). For the tile plants surveyed, the
maximum additional annual water treatment costs to comply with the BAT
standards equals only 0.3% of annual sales. As such, all the tile
facilities are regarded as relatively well insulated from any impact due
to the promulgation of these standards.
In summary, solely on the basis of high water treatment costs in
relation to estimated value of product sales, the following plants are
possible candidates for shutdown as a result of the BAT effluent standards:
Annual Sales
Additional Annual
Plant Code
Product
Location
of Product
Water Treatment Cost
(106)
SS-3
Sheet
Southern U.S.
1.0
$70,300
ER1
Paper
Eastern U.S.
0.33
20,700
EM-1
Millboard
Eastern U.S.
0.77
38,000
EM-3
Millboard
Eastern U.S.
1.1
38,000
The aggregate 1972 sales of the products under study are estimated
at about $550 million. Thus, the potential and apparent loss of sales
due to cessation of the above production lines amounts to only 0.6%.
Note that this loss does not necessarily mean a reduction in the absolute
quantity of product generated by the industry as a whole. It is rather
to be expected that installed capacity now only partially utilized at
other plants will be geared-up to compensate for these apparent losses.
d. Employment Effects
In addition to the three plants previously identified as impact-
sensitive with regard to the BPT standards, only one other facility, EB.-1,
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a paper plant located in an Eastern state, is considered threatened by
reason of the BAT standards. The total number of jobs threatened by the
possible closure of these plants is estimated at 285 — equivalent to
2.4 percent of the industry total. Thus, it is concluded that the poten-
tial employment effect due to the BAT standards is negligible.
e. Community Effects
The comments made regarding the potential conmunity effects arising
out of the possible closure of SS-3, EM-1 and EM-3 as a result of imple-
mentation of the BPT standards are equally applicable here. A comment
is warranted therefore only with regard to the potential community impact
resulting from shutdown of ER-1.
This plant is located in a sparsely populated state contiguous to
a major metropolis. The concentration of manufacturing industry in the
immediate area has been dwindling over the last two decades. Nevertheless
unemployment is below national average (3.0 to 4.9%). This suggests that
in spite of the recent erosion of manufacturing activity, employees dis-
located because of shut-down of ER-1 may be able to obtain alternative
employment in other endeavors in the area.
f. Balance of Payment Effects
As discussed previously, the trade in asbestos products has generally
been in favor of the United States, and it is expected that this pattern
will continue, unaffected by the BPT and BAT standards. By 1983, however,
one would look for the gap between the values of exports and imports to
be narrower than they are currently. As the economies of the developing
nations advance, the combination of a developed local manufacturing capa-
bility and a reduced growth rate in the construction field should dampen
their demand for imported asbestos products.
4. -Impact of New Source Performance Standards
a. Impact on Industry Growth
The asbestos products manufacturing industry experienced an impres-
sive growth from its inception in the United States through the decade of
the 1950's. That growth rate has since decreased to a current annual
level of near 5 percent, and there are indications it may not exceed this
level in the future. In combination with the fact that asbestos products
manufacturing is a relatively low profit endeavor, it is doubtful whether
large investments in new plants and capacities can be expected in the
next decade or so, especially in light of the fact that in-place plants
are currently operating at an average of near 70 percent of capacity. One
must also take into consideration the recent rash of publicity regarding
the alleged adverse environmental and health effects of asbestos, as well
as the severe competition posed to asbestos products from man-made materi-
als. Accordingly, it may be justified to conclude that the future growth
rate in this industry would probably not exceed that of the general economy.
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The additional costs of installing water treatment facilities
required to meet the proposed new source standards can only serve to In-
hibit the wide-spread installation of new plants for the manufacture of
those asbestos products which are generally regarded to be low profit
items.
While 110 hard and fast conclusions may be drawn without specific
financial analysis of a given proposed plant, it is instructive to con-
sider semi-quantitatively the potential impact of the additional water
treatment capital costs on the investment required by a new manufacturing
facility. As an illustration, consider an asbestos-cement pipe facility
with an annual production capacity of 150,000 tons. The necessary capital
investment (exclusive of working capital and water treatment capital
costs) is estimated at about $3 million. If the investment in water
treatment facilities required to comply with the BAT standards is assumed
to be identical to those of a typical pipe plant (Table XXI) and equiva-
lent to $305,000, it can be deduced that these added expenditures amount
to an additional 10 percent of the original plant cost. The specific
effects of these additional investments on the corporate decision to enter
into or stay out of such a new venture can only be determined after anal-
yzing all the financial data applicable to the contemplated installation.
In the absence of such specific data, it is only safe to observe that an
additional 10 percent capital requirement is often large enough to kill a
new manufacturing venture.
Thus, the above factors tend to indicate that, whereas even without
the proposed water treatment costs no dramatic increases In installed
capacity are thought to be forthcoming for the balance of this decade,
the imposition of these added costs can only produce a reinforcing effect,
thus worsening the situation.
b. Impact on Prices
In a previous section, it was indicated that the price of asbestos
products has, over the last five to ten years, remained reasonably stable
or increased at a rate lower than that of the general manufactured product
price index. This may be the result of increased manufacturing efficiency
and productivity and the threat of market penetration represented by com-
petitive substitute materials. All Indications are that any future price
increases will be moderate and at worst will aim to recoup increased
manufacturing costs where these cannot be comfortably absorbed. The
incremental costs of meeting the BPT and BAT standards are very negligible,
and even if these costs were to be passed-on, would not, in themselves,
inhibit demand, result in significant substitution of alternative
materials, or accelerate the rate of import penetration of the domestic
market.
c. Impact on Plant Location
In view of the very modest incremental costs incurred by the asbestos
products manufacturing industry in meeting the BPT and BAT effluent
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standards, it is not anticipated that any relocation to foreign sites,
of any of the currently operating plants would occur; nor is it visualized
that these water treatment costs are a sufficiently attractive incentive
for locating a new facility in a foreign country in preference to the
United States. It is increasingly apparent that many foreign countries
are beginning to institute environmental quality standards whose long-
term effect would be to erase the manufacturing cost advantage hitherto
enjoyed by foreign manufacturers. Thus, the attraction of these countries
as a haven from pollution regulation is fast disappearing.
While recognizing the virtually insignificant effect of new water
pollution control costs with respect to new plant location, it must be
observed that domestic asbestos products manufacturers have had to con-
tend with, among other non-productive costs, the expenses due to air
quality and occupational safety and health standards, which several
foreign countries do not now require. These factors, rather than incre-
mental water pollution costs, per se, may be among the significant in-
ducements to prefering a foreign plant site. It is understood that this
situation already exists with respect to the asbestos textiles manufac-
turing industry.
d. Balance of Payments Effects
As discussed previously, the United States has traditionally enjoyed
a favorable balance of trade relative to manufactured asbestos products.
While the export-versus-import gap is expected to narrow, it should con-
tinue in favor of the United States for the balance of this decade. And
since the costs of meeting the BPT and BAT standards do not, by themselves,
represent a significant incentive for foreign manufacturing of asbestos
products (by U.S. firms), it is reasoned that these modest additional
costs, per se, will not significantly alter the balance of payments
picture.
LIMITS OF THE ANALYSIS
This assessment of the potential economic impact of the BPT and "BAT
effluent guidelines on the asbestos manufacturing industry has been con-
ducted on the assumption that the unit operations and corresponding typical
plant capital investment and annual treatment costs suggested by the
Guidelines Development Document are truly applicable to the effluents
generated by the appropriate industry categories. As such, the economic
impact conclusions rest on the accuracy of these cost data and treatment
schemes.
The evaluation of the economic impact of additional water treatment
costs, and particularly the determination of specific plant costs as a
proportion of annual sales, is a function of at least three estimated
quantities, — "annualized" water treatment costs, typical annual pro-
duction rates, and representative unit sales values of products. Thus,
any gross errors in any of these quantities affects the accuracy of the
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impact parameter. To minimize such errors, careful judgment has been
exercised in the estimates and they are believed to be reasonably reflec-
tive of actual experience. A potentially complicating consideration Is the
fact that treatment and capital costs were developed in terms of 1971
dollars, whereas the financial impact for the major companies is experi-
enced in terms of current dollars. Accordingly, differing rates of
inflation and cost escalation will influence the impact parameter.
It needs to be indicated that while the present analysis has identi-
fied plants that are potentially vulnerable as a result of the effluent
guidelines, the decision to curtail or discontinue operations at a given
plant is governed by a number of interracting factors; and while water
treatment costs may appear unacceptably high at a threatened plant, the
decision to continue or terminate operations is a function of corporate
goals, present and future market conditions, etc.
Finally, the interpretation of the potential impact of the proposed
effluent guidelines has not taken into account the concurrent and rein-
forcing effects of other legislations and governmental controls which,
with the additional water control costs, may create a "last-straw" effect,
even though the effluent treatment costs may by themselves be negligible.
Specifically, the effects of these guidelines must, in a subsequent
study, be evaluated along with those of such other control regulations
as OSHA and air quality standards.
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APPENDICES
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APPENDIX A
EFFLUENT LIMITATIONS GUIDELINES FOR THE ASBESTOS MANUFACTURING POINT SOURCE CATEGORY
PRODUCT CATEGORY
EFFLUENT
CHARACTERISTIC
'
EFFLUENT LIMITATIONS (Metric units, kg/kkg of product)
BPT*
Standards
BAT* Standards
NSP* Standards
Maximum for
any one day
Average of
daily values**
Haximum for Average of
any one day daily values**
Maximum for Average of
any one day daily values**
Asbestas-cuent pipe
TSS*
pH
0.57
Within the
range
0.19
6,0 to 9.0
No discharge of process
waste water pollutants
0.57 0.19
Within the range 6.0 to 9.0
Asbestos-cement sheet
TSS
pH
0.68
Within the
range
0.23
6.0 to 9.0
No discharge of process
waste water pollutants
No discharge of process
waste water pollutants
Asbestos paper (starch
binder)
TSS
pH
0.55
Within the
range
0.35
6.0 to 9.0
No discharge of process
waste water pollutants
No discharge of process
waste water pollutants
Asbestos paper
(elastoneric binder)
TSS
pH
0.55
Within the
range
0.35
6.0 to 9.0
No discharge of process
waste water pollutants
0.55 0.35
Within the range 6.0 to 9.0
Asbestos Billboard
TSS
pH
Ho discharge of process
waste water pollutants
No discharge of process
waste water pollutants
No discharge of process
waste water pollutants
Asbestos roofing
COD##
TSS
ptt
0.015
0.010
Within the
range
0.008
0.006
6.0 to 9.0
No discharge of process
waste water pollutants
Ko discharge of process
waste water pollutants
Asbestos floor tile
COD
TSS
pH
0.14
0.06
Within the
range
0.09
0.04
6.0 to 9.0
No discharge of process
waate water pollutants
No discharge of process
waste water pollutants
(iPT " Best practicable control technology currently available
* < BAT - Best available technology economically achievable
(KSP " Standard of performance for new sources
** Average of daily values for 30 consecutive days shall not exceed this value
# Total suspended solids
#1 Chealcal oxygen deaand
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APPENDIX B
PRESENT PATTERN OF EFFLUENT TREATMENT BY ASBESTOS PRODUCTS
MANUFACTURING PLANTS
Product Category Plant Code Effluent Flow Rate Present Treatment
Asbestos-cement
_EiE£
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
(io-
Raw
555
1,740
485
GPD)
Treated
45
0
270
485
200
190
20
540
80
480
C
c
D
A
C
C
B
B
B
B
A
B
B
D
Asbestos-cement
sheet
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
HS-2
HS-3
SS-1
SS-2
SS-3
SS-4
WS-1
240
170
150
540
70
0
160
0
45
40
70
A
B
C
A
B
D
B
D
B
B
A
A
A
Asbestos paper
ER-1
ER-2
ER-3
ER-4
ER-5
ER-6
ER-7
720
270
0
1,000
1,100
1,300
0
B
C
B
B
A
B
C
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Product Category Plant Code Effluent Flow Rate Present Treatment
(103 GPD)
Raw Treated
MR-l
450
0
C
MR-2
-
-
A
SR-1
-
540
B
WR-1
-
540
B
Asbestos millboard EM-1 - A
EM-2 - B
EH-3 - A
EM-4 - B
EM-5 - - B
MM-1 1B0 0 C
MM-2 350 0 C
Asbestos roofing EF-1 - 170 B
EF-2 - A
EF-3 - B
EF-4 - A
MF-1 370 0 C
SF-1 A3 B
SF-2 7 A
SF-3 - A
WF-1 - A
Asbestos floor tile ET-1 0 60 A
ET-2 - 213 B
ET-3 - A
MT-1 - 430 B
MT-2 - A
MT-3 - - A
ST-1 - A
ST-2 68 A
ST-3 - A
WT-1 4 B
WT-2 - A
WT-3 - A
WT-4 - 7 A
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APPENDIX C
REPRESENTATIVE MANUFACTURING PLANTS USED
IN DEVELOPING COST INFORMATION
Estimated
Daily
Product Category Production Wastewater Flow
Actual Design*
Tons
MGD
MGD
Asbestos-cement pipe
160
0.56
0.50
Asbestos-cement sheet
120
0.17
0.125
Asbestos paper
70
0.72
0.50
Asbestos millboard
15
0.18
0.10
Asbestos roofing
720
0.37
0.40
Asbestos floor tile
700,000 pc
0.43
0.40
Source: Effluent Guidelines Development Document
^Design flow used in developing cost estimates.
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APPENDIX D
ASBESTOS-CEMENT SHEET PRODUCTS: WATER TREATMENT
CAPITAL INVESTMENT AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capital Investment
Capacity (10^ Gals/Day) BFT Standards
111
To Satisfy
BAT Standards
75
125*
200
500
750
68,000
92,000
122,000
211,000
270,000
111,000
151,000
200,000
347,000
442,000
^Typical Plant Capacity•
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
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APPENDIX E
ASBESTOS PAPER PLANTS: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capital Investment
Capacity (103 Gale/Day) BPT Standards
ML
To Satisfy
BAT Standards
100
250
500*
1,000
1,500
90,000
156,000
237,000
359,000
458,000
112*000
194,000
294,000
446,000
568,000
^Typical Plant Capacity.
Source: Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
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APPENDIX F
ASBESTOS MILLBOARD PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment Capital Investment ($) To Satisfy
Capacity (103 Gala/Day) BPT and BAT Standards
50 34,000
100* 52,000
250 90,000
500 137,000
750 174,000
*Typical Plant Capacity
Source; Based on "typical plant" cost contained in the Effluent Guidelines
Development Document,
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APPENDIX G
ASBESTOS ROOFING PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment
Capacity (10^ Gale/Day)
Capital Investment
BPT Standards
ill
To Satisfy
BAT Standards
25
100
250
400*
750
5,000
11,000
18,000
24,000
35,000
9,000
21,000
36,000
48,000
70,000
*Typlcal Plant Capacity
Source; Based on "typical plant" cost contained In the Effluent Guidelines
Development Document.
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APPENDIX H
ASBESTOS FLOOR TILE PLANT: WATER TREATMENT CAPITAL INVESTMENT
AS A FUNCTION OF TREATMENT CAPACITY
Effluent Treatment Capital Investment ($) To Satisfy
Capacity (103 Gals/Day) BPT Standards BAT Standards
25 10,000 21,000
100 23,000 48,000
250 39,000 83,000
400* 52,000 110,000
750 76,000 160,000
~Typical Plant Capacity.
Source; Based on "typical plant" cost contained in the Effluent Guidelines
Development Document.
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APPENDIX I
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS-CEMENT PIPE PLANTS
I, BPT Standards
Capital Cost
6,100
10,600
16,100
24,400
31,100
Depreciation
3,800
6,600
10,100
15,300
19,430
Operation & Maintenance
17,560
43,900
87,800
175,600
263,400
Energy & Power
1,400
3,500
7.000
14.000
21.000
Total Annual Cost
28,860
64,600
121,000
229,300
334,930
Cost per 1000 gallons
0.79
0.71
0.66
0.63
0.61
II. BAT Standards
Capital Cost
9,300
16,100
24,400
37,000
47,200
Depreciation
5,800
10,100
15,300
23,100
29,500
Operation & Maintenance
22,830
49,200
98,300
196,600
294,900
Energy & Power
2,400
6.000
11,900
23.800
35.700
Total Annual Cost
40,330
81,400
149,900
280,500
406,900
Cost cer 1000 eallons
1.11
0.89
0.82
0.77
0.74
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APPENDIX J
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS-CEMENT SHEET PLANTS
I. BPT Standards
Capital Cost
5,400
7,400
9,800
16,900
21,600
Depreciation
3,400
4,600
6,100
10,600
13,500
Operation & Maintenance
32,000
53,300
85,300
213,200
319,800
Energy & Power
2.500
4,200
6f 700
16.800
25.200
Total Annual Cost
43,300
69,500
107,900
257,500
380,100
Cost per 1000 gallons
1.58
1.52
1.48
1.41
1.39
II. BAT Standards
Capital Cost
8,900
12,100
16,000
27,800
35,400
Depreciation
5,600
7,600
10,000
17,400
22,100
Operation & Maintenance
55,400
92,400
147,800
369,600
554,400
Energy & Power
4,200
7,000
11,200
28,000
42.000
Total Annual Cost
74,100
119,100
185,000
442,800
653,900
Cost per 1000 gallons
2.71
2.61
2.53
2.43
2.39
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APPENDIX K
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS PAPER PLANTS
I. BPT Standards
Cost Item
Annual
Water Treatment Costs ($)
Capacity (10^ Gals/Day)
100
250
500*
1.000
1.500
Capital Cost
7,200
12,510
18,960
28,740
36,650
Depreciation
A,510
7,820
11,850
17,960
22,910
Operation & Maintenance
3,200
8,000
16,000
32,000
48,000
Energy & Power
3.200
8.000
16.000
32.000
48.000
Total Annual Cost
18,130
36,330
62,810
110,700
155,560
Cost per 1000 gallons
0.50
0.40
0.34
0.30
0.28
11. BAT Standards
Capital Cost
8,960
15,520
23,520
35,650
45,480
Depreciation
5,600
9,700
14,700
22,280
28,420
Operation & Maintenance
8,800
22,000
44,000
88,000
132,000
Energy & Power
3.200
8.000
16.000
32.000
48,000
Total Annual Cost
26,560
55,220
98,220
177,930
253,900
Cost per 1000 stallonB
0.73
0.61
0.54
0.49
0.46
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APPENDIX L
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS MILLBOARD PLANTS
BPT & BAT Standards
Capital Cost
2,745
4,160
7,210
10,930
13,940
Depreciation
1,720
2,600
4,505
6,830
8,710
Operation & Maintenance
12,150
24,300
60,750
121,500
182,250
Energy & Power
3,500
7.000
17.500
35.000
52.500
Total Annual Cost
20,115
38,060
89,965
174,260
257,400
Cost per 1000 gallons
1.10
1.04
0.99
0.96
0.94
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APPENDIX M
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS ROOFING PLANTS
I. BPT Standards
Cost Item
Annual
Hater Treatment
Costs
($)
Capacity (10^ Gals/Dav)
25
100
250
400*
750
Capital Cob t
364
836
1,450
1,920
2,800
Depreciation
228
523
905
1,200
1,750
Operation & Maintenance
375
1,500
3,750
6,000
11,250
Energy & Power
81
325
813
1.300
2.440
Total Annual Cost
1,048
3,184
6,918
10,420
18,240
Cost per 1000 gallons
0.12
0.09
0.08
0.07
0.07
II. BAT Standards
Capital Cost
727
1,672
2,896
3,840
5,600
Depreciation
455
1,045
1,810
2,400
3,500
Operation & Maintenance
0
0
0
0
0
Energy & Power
525
2.100
5,250
8.400
15,750
Total Annual Cost
1,707
4,817
9,956
14,640
24,850
Cost per 1000 gallons
0.19
0.13
0.11
0.10
0.09
*Typical Plant Capacity
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APPENDIX N
ANNUAL WATER TREATMENT COSTS FOR ASBESTOS FLOOR TILE PLANTS
I. BPT Standards
Cost Item
Annual
Hater Treatment Costa
($>
Capacity (10^ Gals/Day)
25
100
250
400*
750
Capital Cost
788
1,812
3,138
4,160
6,064
Depreciation
493
1,133
1,960
2,600
3,790
Operation 6 Maintenance
688
2,750
6,875
11,000
20,625
Energy & Power
113
450
1.125
1.800
3.375
Total Annual Cost
2,082
6,145
13,098
19,560
33,854
Cost per 1000 eallons
0.23
0.17
0.14
0.13
0.12
II. BAT Standards
Capital Cost
1,668
3,830
5,544
8,405
10,720
Depreciation
1,043
2,394
3,465
5,253
6,700
Operation & Maintenance
675
2,700
6,750
10,800
20,250
Energy & Power
188
750
1.875
3.000
5.625
Total Annual Cost
3,574
9,674
17,634
27,458
43,295
Cost per 1000 sallons
0.39
0.27
0.19
0.18
0.16
*Typical Plant Capacity
8G
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APPENDIX O
THE ASBESTOS PRODUCTS INDUSTRY: WATER TREATMENT COSTS TO
MEET THE BPT STANDARDS
Product Category
Asbestos-cement Pipe
Plant Code
Estimated Costs
iii
Asbestos-cement Sheet
Capital
Investment
Subtotal
622,000
Annual Coat
EP-1
0
0
EP-2
0
0
MP-1
0
0
MP-2
140,000
69,500
MP-3
0
0
SP-1
0
0
SP-2
45,000
15,300
SP-3
76,000
32,900
SP-4
20,000
1,800
SP-5
80,000
43,400
WP-1
200,000
120,500
WP-2
30,000
7,300
WP-3
75,000
36,800
MP-4
0
0
btotal
666,000
327.500
ES-1
104,000
62,100
ES-2
86,000
67,000
ES-3
0
0
ES-4
65,000
40,900
ES-5
36,000
17,800
MS-1
0
0
MS-2
43,000
23,400
MS-3
0
0
SS-1
20,000
7,400
SS-2
19,000
6,600
SS-3
65,000
40,900
SS-4
92,000
69,400
WS-1
92,000
69.400
424,900
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Product Category
Plant Code
Estimated Costs ($)
Asbestos Paper
Asbestos Millboard
AsbestOB Roofing
Capital
Investment Annual Cost
ER-1
0
0
ER-2
0
0
ER-3
0
0
ER-4
0
0
1R-5
380,000
118,500
ER-6
0
0
ER-7
0
0
MR-1
0
0
MR-2
237,000
62,100
MR-3
0
0
SR-1
0
0
WR-1
0
0
Subtotal
617,000
180,600
EM-1
52,000
38,000
EM-2
12,000
3,300
EM-3
52,000
38,000
EM-4
12,000
3,300
EM-5
12,000
3,300
MM-1
0
0
MM-2
0
0
Subtotal
140,000
85,900
EF-1
0
0
EF-2
24,000
10,400
EP-3
0
0
EF-4
24,000
10,400
MF-1
0
0
SF-1
0
0
SF-2
2,000
3,000
SF-3
24,000
10,400
WF-1
24.000
10,400
Subtotal
98,000
44,600
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Product Category
Asbestos Floor Tile
Plant Code Estimated Costs ($)
Capital
Investment Annual Cost
ET-1 16,000 A,400
ET-2 0 0
ET-3 52,000 19,600
MT-1 0 0
KT-2 52,000 19,600
MT-3 52,000 19,600
ST-1 52,000 19,600
ST-2 18,000 5,000
ST-3 52,000 19,600
wr-i o o
WT-2 52,000 19,600
WT-3 52,000 19,600
WT-4 6,000 500
Subtotal 404,000 147,100
83
Arthur D Little lnc
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APPENDIX P
THE ASBESTOS PRODUCTS INDUSTRY: WATER TREATMENT COSTS TO
MEET THE BAT STANDARDS
Product Category
Asbestos-cement Pipe
Plant Code
Estimated Coeta
iil
Asbestos-cement Sheet
Capital
Investment
Annual Cost
EP-l
104,000
28,900
EP-2
35,000
5,300
MP-1
0
0
MP-2
210,000
86,700
MP-3
105,000
28,300
SP-1
60,000
16,800
SP-2
100,000
32,600
SP-3
181,000
67,200
SP-4
50,000
3,800
SP-5
190,000
71,000
WP-1
305,000
149,900
WP-2
65,000
16,400
VfP-3
180,000
66,600
WP-4
0
0
Subtotal
1.585.000
573.500
ES-1
170,000
141,300
ES-2
225,000
268,100
ES-3
59,000
49,600
ES-4
105,000
70,300
ES-5
95,000
67,600
MS-1
0
0
MS-2
110,000
84,700
MS-3
0
0
SS-1
60,000
24,600
SS-2
56,000
22,200
SS-3
109,000
70,300
SS-4
151,000
119,100
WS-1
151.000
119.100
Subtotal
1,291.000
1.036,900
84
Arthur DLittlelnc
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Product Category
Asbestos Paper
Asbestos Millboard
Asbestos Roofing
Plant Code Estimated Costs ($)
Capital
Investment Annual Cost
ER-1
38,000
20,700
ER-2
0
0
ER-3
57,000
35,400
ER-4
86,000
67,200
ER-5
470,000
194,700
ER-6
100,000
85,400
ER-7
0
0
MR-1
0
0
MR-2
294,000
98,200
MR-3
25,000
B7.800
SR-1
60,000
39,400
WR-1
60.000
39,400
Subtotal
1,190,000
582,800
EM-1
52,000
38,000
EM-2
12,000
3,300
EM-3
52,000
38,000
EM-4
12,000
3,300
EM-5
12,000
3,300
MM-1
0
0
MM-2
0
0
Subtotal
140,000
85.900
EF-1
14,000
2,200
EF-2
48,000
14,600
EF-3
24,000
4,200
EF-4
48,000
14,600
MF-1
0
0
SF-1
6,000
900
SF-2
7,000
200
SF-3
48,000
14,600
WF-1
48,000
14.600
Subtotal
243,000
65.900
85
Arthur D Little Inc
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Product Category
Plant Code Estimated Costs
Asbestos Floor Tile
Capital
Investment Annual CoBt
ET-l
33,000
7,300
ET-2
33,000
4,700
ET-3
110,000
27,500
MT-1
52,000
7,900
MT-2
110,000
27,500
MT-3
110,000
27,500
ST-1
110,000
27,500
ST-2
37,000
7,900
ST-3
110,000
27,500
WT-1
5,000
200
WT-2
110,000
27,500
WT-3
110,000
27,500
WT-4
11.000
1.100
Subtotal
1,051,000
214,300
86
Arthur D Little Inc
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APPENDIX Q
ASBESTOS-CEMENT PIPE MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE BPT STANDARDS
Plant Code
Estimated Annual
Production (Tons)
Estimated Annual
Sales ($106)
Annual Water
Treatment Coat
Water Treatment
Cost As Percent
of Sales
EP-1
EP-2
MP-1
MP-2
MP-3
SP-1
SP-2
SP-3
SP-4
SP-5
WP-1
WP-2
WP-3
WP-4
Total
83,000
40,000
67,500
66,000
72,250
31,250
30,500*
60,000*
46,250
58,000
50,000*
37,500
87,500
50.000
779,750
16.6
8.0
13.5
13.2
14.45
6.25
6.1
12.0
9.25
11.6
10.0
7.5
17.5
10.0
155.95
0
0
0
69,500
0
0
15,300
32,900
1,800
43,400
120,500
7,300
36,800
0_
327,500
0
0
0
0.53
0
0
0.25
0.27
0.02
0.37
1.3
0.10
0.21
0
0.21
Basis: 250 days/year operation; Bales price of $0.10 per pound.
~Contractor's Estimates
87
Arthur D Little, Inc.
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APPENDIX R
ASBESTOS-CEMENT SHEET MANUFACTURING INDUSTRY - ANNUAL
WATER TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Plant Code
Estimated Annual
Production (Tone)
Estimated Annual
Salee ($lp6)
Annual Water
Treatment Cost
($)
Water Treatment
Cost As Percent
of Sales
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
Total
25,000
31,250
30,000*
30,000
25,000*
25,000
65,000
30,000
30,000*
50,000
4,000
25,000*
30.000*
400,250
6.25
7.81
7.5
7.5
6.25
6.25
16.25
7.5
7.5
12.5
1.0
6.25
7.5
100.06
82,100
67,000
0
40,900
17,800
0
23,400
0
7,400
6,600
40,900
69,400
69.400
424,900
1.3
0.86
0
0.55
0.28
0
0.14
0
0.10
0.05
4.09
1.1
0.93
0.43
Basis: 250 days/year operation; $0,125 per pound sales price.
Contractor's Estimates
88
Arthur D Little, lnc
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APPENDIX S
ASBESTOS PAPER MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Annual Water Water Treatment
Plant Code Estimated Annual Estimated Annual Treatment Cost Cost As Percent
Production (Tons) Sales ($10^) ($) of Sales
ER-l
750
0.33
0
0
ER-2
17,500
7.7
0
0
ER-3
25,000*
11.0
0
0
ER-4
12,500*
5.5
0
0
ER-5
18,750*
8.25
118,500
1.44
ER-6
28,600
12.58
0
0
ER-7
24,000
10.56
0
0
MR-1
20,000
8.8
0
0
MR-2
18,750*
8.25
62,100
0.75
MR-3
14,250
6.27
0
0
SR-1
25,000*
11.0
0
0
WR-1
25.000*
11.0
0
0
Total
230,100
101.24
180,600
0.18
Basis: 250 days/year operation; sales price of $0.22 per pound.
Contractor's Estimates
89
Arthur D Little, Inc
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APPENDIX U
ASBESTOS ROOFING MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS (BY PLANTS) TO SATISFY THE
BRT EFFLUENT STANDARDS
Plant Code
Estimated Annual
Production (Ions)
Estimated Annual
Sales ($106)
Annual Water
Treatment Cost
($)
Water Treatment
Cost As Percent
of Sales
EF-1
EF-2
EF-3
EF-4
MF-1
SF-1
SF-2
SF-3
WF-1
Total
2,140
2,000*
2,500*
2,000*
3,600
2,500
3,600*
3,600*
3,600*
25,540
0.482
0.45
0.56
0.45
0.81
0.56
0.81
0.81
0.81
5.742
0
10,400
0
10,400
0
0
3,000
10,400
10.400
44,600
0
2.3
0
2.3
0
0
0.4
1.3
1.3
0.8
Basis: 250 days/year operation; average sale price of $225 per ton.
Contractor's Estimates
90
Arthur D Little, Inc.
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APPENDIX V
ASBESTOS FLOOR TILE MANUFACTURING INDUSTRY - ANNUAL WATER
TREATMENT COSTS {BY PLANTS) TO SATISFY THE
BPT EFFLUENT STANDARDS
Annual Water Water Treatment
Plant Code Estimated Annual Estimated Annual Treatment Cost Cost As Percent
Production (Tons) Salea ($10 ) of Sales
ET-l
135.0
17.55
4,400
0.03
ET-2
125.0
16.25
0
0
ET-3
162.5*
21.125
19,600
0.09
MT-1
175.0
22.75
0
0
MT-2
73.25
9.52
19,600
0.21
MT-3
125.0*
16.25
19,600
0.12
ST-1
75.0*
9.75
19,600
0.20
ST-2
85.0
11.05
5,000
0.05
ST-3
137.5
17.88
19,600
0.11
WT-1
33.75
4.39
0
0
WT-2
137.5*
17.88
19,600
0.11
WT-3
62.5*
8.13
19,600
0.24
WT-4
78.75
10.24
500
0.00
Total
1,405.75
182.765
147,100
0.08
Basis: 250 days/year operation; average sales price of $0.13 per piece.
Contractor's Estimates
91
Arthur D Little Inc.
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APPENDIX W
ASBESTOS-CEMENT PIPE MANUFACTURING INDUSTRY ANNUAL WATER
TREATMENT COSTS {BY PLANTS) TO SATISFY THE
BAT EFFLUENT STANDARDS
Plant Code
Estimated Annual
Production (tons)
Estimated Annual
SaleB ($10*)
Annual Water
Treatment
Costs ($)
EP-1
83,000
16.6
28,900
EP-2
40,000
8.0
5,300
KP-1
67,500
13.5
0
MP-2
66,000
13.2
86,700
MP-3
72,250
14.45
28,300
SP-1
31,250
6.25
16,800
SP-2
30,500*
6.1
32,600
SP^-3
60,000*
12.0
67,200
SP-4
46,250
9.25
3,800
SP-5
58,000
11.6
71,000
WP-1
50,000*
10.0
149,900
WP-2
37,500
7.5
16,400
WP-3
87,500
17.5
66,600
WP-4
50,000*
10.0
0
Total
779,750
155.95
573,500
Water Treat-
ment Cost As
Percent of
Sales
0.17
0.07
0
0.66
0.20
0.27
0.53
0.56
0.04
0.61
1.50
0.22
0.38
0
0.37
Basis: 250 days/year operation; sales price of $0.10 per pound.
~Contractor's Estimates
92
Arthur D Little, Inc.
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APPENDIX X
ASBESTOS-CEMENT SHEET MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT
COSTS (BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Plant Code
ES-1
ES-2
ES-3
ES-4
ES-5
MS-1
MS-2
MS-3
SS-1
SS-2
SS-3
SS-4
WS-1
Estimated Annual
Production (tons)
25,000
31,250
30,000*
30,000
25,000*
25,000
65,000
30,000
30,000*
50,000
4,000
25,000*
30.000*
Estimated Annual
Salea ($10fe)
6.25
7.81
7.5
7.5
6.25
6.25
16.25
7.5
7.5
12.5
1.0
6.25
7.5
Annual Water
Treatment
Costa ($)
141,300
268,100
49,600
70,300
67,600
0
84,700
0
24,600
22,200
70,300
119,100
119.100
Water Treat-
ment Cost As
Percent of
Sales
2.3
3.4
0.7
0.9
1.1
0
0.5
0
0.3
0.2
7.0
1.9
1.6
Total
400,250
100.06
1,036,900
1.0
Basis: 250 days/year operation; $0,125 per pound sales price.
Contractor's Estimates
93
Arthur D Little, Inc
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APPENDIX Y
ASBESTOS PAPER MANUFACTURING INDUSTRY WATER TREATMENT COSTS
(BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Water Treat-
Plant Code Estimated Annual Estimated Annual Annual Water ment Cost As
Production (Ions) Sales ($10^) Treatment Cost Percent of
[£) Sales
ER-l
750
0.33
20,700
6.3
ER-2
17,500
7.7
0
0
ER-3
25,000*
11.0
35,400
0.3
ER-4
12,500*
5.5
67,200
1.2
ER-5
18,750*
8.25
194,700
2.4
ER-6
28,600
12.58
85,400
0.7
ER-7
24,000
10.56
0
0
MR-1
20,000
8.8
0
0
MR-2
18,750*
8.25
98,200
1.2
MR-3
14,250
6.27
87,800
1.4
SR-1
25,000*
11.0
39,400
0.4
WR-1
25.000*
11.0
39.400
0.4
3tal
230,100
101.24
582,800
0.6
Basis: 250 days/year operation; sales price of $0.22 per pound.
Contractor's Estimates
94
Arthur D Little, Inc
-------
APPENDIX Z
ASBESTOS ROOFING MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT COSTS
(BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Water Treat-
Plant Code Estimated Annual Estimated Annual Annual Water ment Cost As
Production(Tons) Sales ($10^) Treatment Cost Percent of
($) Sales
EF-1 2,140 0.482 2,200 0.5
EF-2 2,000 0.45 14,600 3.2
EF-3 2,500* 0.56 4,200 0.8
EF-4 2,000* 0.45 14,600 3.2
MF-1 3,600 0.81 0 0
SF-1 2,500 0.56 900 0.2
SF-2 3,600* 0.81 200 0.0
SF-3 3,600* 0.81 14,600 1.8
WF-1 3,600* 0.81 14.600 1.8
Total 25,540 5.742 65,900 1.14
Basis: 250 days/year operation; average sales price of $225 per ton.
Contractor's Estimates
95
Arthur D Little Inc
-------
APPENDIX AA
ASBESTOS FLOOR TILE MANUFACTURING INDUSTRY ANNUAL WATER TREATMENT
COSTS {BY PLANTS) TO SATISFY THE BAT EFFLUENT STANDARDS
Water Treat-
Plant Code Estimated Annual Estimated Annual Annual Water ment Cost As
Production Sales (10^) Treatment Coat Percent of
(10 pes.) ($) Sales
ET-l
135.0
17.55
7,300
0.04
ET-2
125.0
16.25
4,700
0.03
ET-3
162.5*
21.125
27,500
0.13
MT-1
125.0
22.75
7,900
0.03
MT-2
73.25
9.52
27,500
0.29
MT-3
125.0*
16.25
27,500
0.17
ST-1
75.0
9.75
27,500
0.28
ST-2
85.0
11.05
7,900
0.07
ST-3
137.5*
17.88
27,500
0.15
WT-1
33.75
4.39
200
0.00
WT-2
137.5*
17.88
27,500
0.15
WT-3
62.5*
8.13
27,500
0.34
WT-4
78.75
10.24
1.100
0.01
Total
1,405.75
182.765
214,300
0.11
Basis: 250 days/year operation; average sales price of $0.13 per piece.
~Contractor's Estimates
96
Arthur D Little, Inc
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