American Hoechst sees slow recovery
1
entailed hydrogénation of phenol to make the cyclohexanone intermedi- ates. (The new plant will use this process.) A 50,000 metric-ton-per- year plant came on stream in 1973. It made cyclohexanone by oxida- tion of cyclohexane via the hydroxyl- amine phosphate process developed by DSM's engineering subsidiary, Stamicarbon. This involves air oxi- dation of cyclohexane. The trouble at Flixborough arose when a fault was noticed in one of the six reactors of the cyclohexane oxidation train. The reactor was taken out of service in March of last year and a 20-inch-diameter pipe connected to the reactors on either side of it. Instead of being straight, however, this bypass pipe doglegged and was fitted to the wider openings on each reactor by bellows. The dogleg built up pres- sure in the pipe, which eventually failed. The large quantities of cy- clohexane that escaped at high temperature and pressure exploded with a force approaching that of 45 tons of TNT. "The disaster," according to the court's finding, "was caused fully by the coincidence of the number of unlikely errors in the design and in- stallations of a modification. Such a combination of errors is very un- likely ever to be repeated." D Hard times hurt aerosol industry The combination of hard times and the "ozone scare" put a double whammy on the aerosol industry last year. According to the latest annual survey of aerosols and pres- surized products, made by the Chemical Specialties Manufactur- ers Association and released last week at the CSMA meeting in Chi- cago, 2.72 billion "units" were filled in 1974. That number repre- sents a 6.6% decrease from the 2.90 billion containers reported filled in 1973. And 1973 had been just so-so, with fillings up only 2.8% from 1972. Personal products, the largest single category, were off about 11%—from 1.50 billion units in 1973 to 1.33 billion in 1974. House- hold products, the second largest category, were down by about 9%—from 689.6 million in 1973 to 625.3 million in 1974. Most other product categories showed decreases ranging from 2 to 9%. Only one cat- egory, food products, showed a sub- stantial increase. Fillings were up about 70%, from 94.6 million units in 1973 to 161.5 million in 1974, U.S. aerosol production slipped 6% last year Billions of units 3 2 f I I gl| S "J iiM.i>ii,i.«i)jln p..|.»iiif,iii i$Wuffp> »M;ii|!iM; 1 ii iMHiii ι.;<ιίί: .ΐίίφ 1968 1969 1970 1971 1972 1973 1974 Source: Chemical Specialties Manufacturers Association thanks mainly to the increased popularity of antistick sprays for cooking utensils. Fillings of prod- ucts for animals and for automo- biles (both relatively small mar- kets) were up about 3% and 8%, re- spectively. The aerosol industry grew steadily, if not spectacularly, from 1968 through 1973. A slight decline in 1971 was more than offset by a sharp rebound in 1972. CSMA's product survey committee cites both the recession and environmen- tal concerns as factors contributing to the more significant drop in 1974. At the meeting, however, it was obvious that it's the ozone scare, not the recession, that really has the aerosol industry worried. Late last summer (C&EN, Sept. 23, 1974, pages 6 and 23), scientists at the University of California, Irvine, and at the University of Michigan hypothesized that chlorofluorocar- bons (widely used as aerosol pro- pellants) eventually would find their way to the upper atmosphere. There, through a complex series of reactions, they would cause deple- tion of the ozone layer that shields the earth from much of the sun's ultraviolet radiation. More UV ra- diation reaching the earth could cause increased incidence of skin cancer and even changes in global climate patterns, the researchers point out. Although the scientists' warnings were based upon theory and labora- tory models—little is directly known of what goes on in the upper atmosphere (C&EN, April 21, page 21)— bills already have been intro- duced in Congress and in several state legislatures to prohibit the manufacture, sale, or use of aero- sols containing chlorofluorocarbons, or otherwise to regulate aerosols, chlorofluorocarbons, or both. None of the bills is law yet, but the in- dustry is running scared. Chloroflu- orocarbon producers, container and valve makers, fillers, and others in- volved in aerosols have formed a lobbying group, the Council on At- mospheric Sciences, to present their case to legislatures and other government agencies. D American Hoechst sees slow recovery This year will be quite a comedown for American Hoechst. Sales by the company, wholly owned by West Germany's Hoechst, including its own newly acquired subsidiary. Foster Grant, rose 24% in 1974 over the 1973 level to $596 million, presi- dent John G. Brookhuis disclosed in New York City last week. Com- bined earnings rose 34%. But Brookhuis' 1975 sales prediction is $630 million, only 6% above 1974. And 1975 earnings may be less than half of last year's $42 million, he says. Foster Grant, which American Hoechst purchased in December, provided a major portion of last year's growth in sales and earnings for the company. As the third largest U.S. manufacturer of polystyrene and a maker of nylon 6 and styrene, Foster Grant increased sales by 50% last year to $210 million, while earn- ings rose 92% to $16.1 million. American Hoechst's other opera- tions posted a 14% gain in sales and 13% in earnings in 1974, Brookhuis says. The worst of the 1975 downturn for American Hoechst is probably already over, but recovery will be slow. Since the beginning of the year about 300 of the 5900 people em- ployed by the company (outside of Foster Grant) have been laid off and certain plants have been work- ing shortened work weeks. But fur- ther layoffs are not expected, Brook- huis says. It may take until the end of the year to get plants back to full production. A number of company projects are being held up, at least tempo- rarily. Current plans call for capital investment of $75 million this year. Last year's investments, including the purchase of Foster Grant, were about $125 million. Among projects being delayed is a polyester fiber plant planned for Orangeburg, S.C. And the first phase of a $250 million organic chemical complex being built at Port Arthur, Tex., is at a standstill because of a construction workers strike. G 8 C&EN May 19, 1975
Transcript of American Hoechst sees slow recovery
entailed hydrogénation of phenol to make the cyclohexanone intermediates. (The new plant will use this process.) A 50,000 metric-ton-per-year plant came on stream in 1973. It made cyclohexanone by oxidation of cyclohexane via the hydroxyl-amine phosphate process developed by DSM's engineering subsidiary, Stamicarbon. This involves air oxidation of cyclohexane.
The trouble at Flixborough arose when a fault was noticed in one of the six reactors of the cyclohexane oxidation train. The reactor was taken out of service in March of last year and a 20-inch-diameter pipe connected to the reactors on either side of it. Instead of being straight, however, this bypass pipe doglegged and was fitted to the wider openings on each reactor by bellows. The dogleg built up pressure in the pipe, which eventually failed. The large quantities of cyclohexane that escaped at high temperature and pressure exploded with a force approaching that of 45 tons of TNT.
"The disaster," according to the court's finding, "was caused fully by the coincidence of the number of unlikely errors in the design and installations of a modification. Such a combination of errors is very unlikely ever to be repeated." D
Hard times hurt aerosol industry The combination of hard times and the "ozone scare" put a double whammy on the aerosol industry last year. According to the latest annual survey of aerosols and pressurized products, made by the Chemical Specialties Manufacturers Association and released last week at the CSMA meeting in Chicago, 2.72 billion "units" were filled in 1974. That number represents a 6.6% decrease from the 2.90 billion containers reported filled in 1973. And 1973 had been just so-so, with fillings up only 2.8% from 1972.
Personal products, the largest single category, were off about 11%—from 1.50 billion units in 1973 to 1.33 billion in 1974. Household products, the second largest category, were down by about 9%—from 689.6 million in 1973 to 625.3 million in 1974. Most other product categories showed decreases ranging from 2 to 9%. Only one category, food products, showed a substantial increase. Fillings were up about 70%, from 94.6 million units in 1973 to 161.5 million in 1974,
U.S. aerosol production slipped 6% last year Billions of units
3
2 f I I gl| S
"J iiM.i>ii,i.«i)jln p..|.»iiif,iii i $ W u f f p > »M;ii|!iM; 1 ii iMHiii ι.;<ιίί: . ΐ ί ίφ
1968 1969 1970 1971 1972 1973 1974
Source: Chemical Specialties Manufacturers Association
thanks mainly to the increased popularity of antistick sprays for cooking utensils. Fillings of products for animals and for automobiles (both relatively small markets) were up about 3% and 8%, respectively.
The aerosol industry grew steadily, if not spectacularly, from 1968 through 1973. A slight decline in 1971 was more than offset by a sharp rebound in 1972. CSMA's product survey committee cites both the recession and environmental concerns as factors contributing to the more significant drop in 1974.
At the meeting, however, it was obvious that it's the ozone scare, not the recession, that really has the aerosol industry worried. Late last summer (C&EN, Sept. 23, 1974, pages 6 and 23), scientists at the University of California, Irvine, and at the University of Michigan hypothesized that chlorofluorocar-bons (widely used as aerosol pro-pellants) eventually would find their way to the upper atmosphere. There, through a complex series of reactions, they would cause depletion of the ozone layer that shields the earth from much of the sun's ultraviolet radiation. More UV radiation reaching the earth could cause increased incidence of skin cancer and even changes in global climate patterns, the researchers point out.
Although the scientists' warnings were based upon theory and laboratory models—little is directly known of what goes on in the upper atmosphere (C&EN, April 21, page 21)— bills already have been introduced in Congress and in several state legislatures to prohibit the manufacture, sale, or use of aerosols containing chlorofluorocarbons, or otherwise to regulate aerosols,
chlorofluorocarbons, or both. None of the bills is law yet, but the industry is running scared. Chloroflu-orocarbon producers, container and valve makers, fillers, and others involved in aerosols have formed a lobbying group, the Council on Atmospheric Sciences, to present their case to legislatures and other government agencies. D
American Hoechst sees slow recovery This year will be quite a comedown for American Hoechst. Sales by the company, wholly owned by West Germany's Hoechst, including its own newly acquired subsidiary. Foster Grant, rose 24% in 1974 over the 1973 level to $596 million, president John G. Brookhuis disclosed in New York City last week. Combined earnings rose 34%. But Brookhuis' 1975 sales prediction is $630 million, only 6% above 1974. And 1975 earnings may be less than half of last year's $42 million, he says.
Foster Grant, which American Hoechst purchased in December, provided a major portion of last year's growth in sales and earnings for the company. As the third largest U.S. manufacturer of polystyrene and a maker of nylon 6 and styrene, Foster Grant increased sales by 50% last year to $210 million, while earnings rose 92% to $16.1 million. American Hoechst's other operations posted a 14% gain in sales and 13% in earnings in 1974, Brookhuis says.
The worst of the 1975 downturn for American Hoechst is probably already over, but recovery will be slow. Since the beginning of the year about 300 of the 5900 people employed by the company (outside of Foster Grant) have been laid off and certain plants have been working shortened work weeks. But further layoffs are not expected, Brookhuis says. It may take until the end of the year to get plants back to full production.
A number of company projects are being held up, at least temporarily. Current plans call for capital investment of $75 million this year. Last year's investments, including the purchase of Foster Grant, were about $125 million. Among projects being delayed is a polyester fiber plant planned for Orangeburg, S.C. And the first phase of a $250 million organic chemical complex being built at Port Arthur, Tex., is at a standstill because of a construction workers strike. G
8 C&EN May 19, 1975
