Don Schumacher on Nitromethane

By Darr Hawthorne
3/1/04

DRO: Are you importing Nitromethane?

DS: At this point I have imported Nitromethane from China along with Jim MacMonagle and John Warren from Worldwide Racing Fuels. We are currently distributing it to the Nostalgia guys and many of the teams, not the Pro teams out here on the NHRA national meets. The only Nitromethane you can use at an NHRA national or divisional meet is Nitromethane manufactured by Dow/Angus and WEGO. We are working on the situation and we'll see what the long-term decision is.

DRO: What is the name of this company?

DS: Pro Nitro.

DRO: Was there a need for another supplier of Nitromethane?

DS: I believe that's something that people have different opinions on. You have to be able to compete on a worldwide basis with whatever product you are manufacturing and selling ... if there's a way to get it done cheaper by somebody else in another country because of that country's economy. That's the way it is in China; most manufacturing has begun to be transferred either to Mexico or China. It's actually

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even leaving Mexico and going to China. Well, it's the same thing with Nitromethane and other chemicals and things used throughout the whole United States economy. I believe competition is good and competition of suppliers of products in this industry is better for the industry than not having competition.

DRO: Was this a price issue?

DS: Oh definitely. Last December VP Racing Fuels was given the exclusive distributorship by both WEGO and Dow to sell their Nitromethane at NHRA races, not by NHRA, to sell their product. The price went from $650 a drum that some of the teams were paying; some teams were paying considerably less than that, to $900 a drum. Also teams last year were getting free drums of alcohol and free solvents that we use in our wash tanks. We now pay for the alcohol and pay for the solvents and because of this Nitromethane that we brought into the country, it has lowered the Nitro costs here at the track to at least $850 a drum, so it's had some effect even though we can't sell it or use it out here. We'll see what the final decision is in the future.

DRO: Will you be selling your product at IHRA races?

DS: Yes it will be distributed at IHRA, all of the Nostalgia races to the Nitro Harley guys and all over the U.S. It's shocking how many e-mails and calls we have received to supply Nitromethane to these other industries where their price went up 30 percent to 60 percent. My personal cost of Nitromethane went up in excess of 60 percent going from what I was paying to $900 a drum. NHRA has allowed that the Nitro that I brought in is legal to test with. For my teams it costs somewhere between $20,000 to $25,000 per team for the races, not testing on top of that you have to add the cost of solvents and alcohol. So I'm looking at close to $100,000 additional expense, which translates to additional costs to my sponsors, which ultimately may even translate to higher ticket prices out here. It's hard to say the ramifications of this thing.