Chemical Experts Settle Dispute Between Water Park And Chlorine Supplier

Case Overview

This case involves a dispute over a chlorine supply contract. The plaintiff was a large indoor waterpark in the northeast that was supplied chlorine by the defendant major chemical manufacturer. It was alleged that the defendant imprudently employed a cost-plus contract. An expert in chlorine manufacturing contracts was sought to opine on the dispute.

Questions to the Chemistry expert and their responses

Please describe your experience in buying/selling chlorine.

I have been involved in chlorine for many years. I worked in the chlor-alkali chemical division at a global materials supplier from 1980 until 2013. This division had a chlorine business very much like those of the major chemical companies. My primary focus was on caustic products, but chlorine and caustics are very closely tied together so I was heavily involved in chlorine sales.

Are you familiar with cost-plus terms in the context of a chlorine supply contract?

Cost-plus deals on chlorine are very reasonable, particularly in specific instances. For a case in which a supplier invests lots of money, it is prudent to use a cost-plus structure that guarantees a return on the investment. The idea of a cost-plus sales agreement when a company has invested considerable assets to supply another company is not at all uncommon. When I was working with the global materials supplier, we made contracts with cost-plus elements and also a component linked to the market. We also made multiple cost-plus proposals, including a recent dealing at another chemical manufacturer where we proposed to build assets for a company and charge with a cost-plus arrangement.

About the expert

This industry veteran has over 20 years of experience in commercial chemical roles. He earned his Bachelor of Science Chemical Engineering from the University of Toledo and then joined the Chlor-Alkali Chemical Division at PPG Industries in 1980. The expert worked in this group until 2013. For six years, he was the Business Director of Liquid & Dry Caustic Soda and Sulfur Products, and during his last seven years with PPG, he was the Director of Sales and Business Development for Chlor-Alkali Chemicals and the General Manager of Special Phosgene Derivatives. In this capacity, he managed two sales directors and nine sales professionals responsible for $1 billion in annual revenue. The expert joined Axiall Corporation, formed through a merger of Georgia Gulf Chemical Company and the PPG Industries Chlor-Alkali Chemicals Division in 2013 as the Director of Business Development. He is currently independent.