italian chemical trade boom continues

5
INTE RNATIONAL Italian Chemical Trade Boom Continues Chemical imports rise only 5.9% in 1961; exports go 23.7% higher; chemical trade almost balances Italy's chemical industry continues to rack up impressive production and ex- port records, despite the storm signals now hoisted over Germany. Last year, Italian chemical producers increased their exports 23.7% over their 1960 levels, almost as good as 1960's 29% increase over 1959. And imports rose only 5.9%, after a 43% jump in 1960. Result: Italy's chemical trade shows a 1961 deficit of only $11 million, less than 20% of 1960's $58 million, and lowest since 1954. And total chemi- cal production in Italy rose 13%. Meanwhile, the rest of the Italian economy showed sound progress rela- tive to last year. Over-all industrial production rose 9.5%. Imports rose 11.1% to $5.2 billion; exports rose 11.5% to $4.2 billion, both new rec- ords. The over-all trade deficit re- mained at about $1 billion but, as in 1960, tourism, shipping, and other fac- tors balanced the negative trade fig- ures. In fact, the Italian lira is now one of Europe's strongest currencies, and the country has relaxed many of its restrictions on currency exports. But despite this rosy picture, Ital- ians must ask themselves, "How much longer can this go on?" Germany is running into very difficult going in both its domestic and foreign mar- kets. Business in France shows signs of tapering off. The Benelux coun- tries and Great Britain are also feeling the pinch of higher costs and tougher foreign competition. The consensus among Europeans is that Italy can maintain high growth rates for several years longer than its neighbors. The reason is that Italy was almost an "underdeveloped" coun- try only 10 years ago, and still has an economically backward area in its South. Hundreds of thousands of Italians are either underemployed or work in other European countries with labor shortages. These two factors- unfulfilled demand, labor reserves- give Italy two advantages relative to the other European countries. Trading Specifics. Italian chemical exports last year were worth $350 mil- lion, imports $361 million. Major im- ports were pharmaceuticals, plastics, organics, and miscellaneous chemical products. But plastics imports were down slightly in value and tonnage. Major exports were fertilizers, pharma- ceuticals, plastics, and organics, all up 20% or more over 1960 levels. The tightening European Common Market also had a hand in setting Italy's chemical trade pattern last year. Imports from ECM reached 46% of the total imports, and were up 10% over 1960, when they repre- sented 44.3% of the total. At the same time, ECM took 22.6% of Italy's ex- ports, compared to 20.1%' the year before and 18.5% in 1959. Value of exports to ECM rose 39.2% in reach- ing their new importance. The United States, meanwhile, shipped some $98.2 million worth of chemicals to Italy, up about 6% from 1960 and representing about 27% of Italian imports of chemicals. The U.S. bought only $15.3 million worth, down 2% from the 1960 level, and a slight 4% of total Italian chemical ex- ports. Further, the much discussed Italian export of drugs to the U.S. amounted to only $2.7 million and at that was down 20% from 1960. This would indicate that dumping of Italian drugs in the U.S. may be somewhat over-rated in importance, and that Italy's proposed drug patent law (C&EN, April 9, page 74) will not have much effect on the U.S. market. Domestic Developments. Italy's overcapacity in petrochemicals and plastics—polyvinyl chloride, polysty- rene, and polyethylene and their mon- omers in particular—continues to be a problem. Their prices in the world markets cause many headaches in other countries. And balance between domestic supply and demand seems to be many years away. But in one area at least, aromatics, new plant capacity is an undisguised blessing. Italy has been short of aro- matics for years, since it has no coal of its own. It has been importing aromatics from the Soviet bloc and the U.S. Just last month, though, Shell Itali- ana brought on stream at Rho a new plant to produce benzene, toluene», and xylene. Mobil Chimia Italiana will have a similar plant at Naples on stream sometime this summer. So de- pendence on imports and susceptibil- ity to price fluctuations from Soviet bloc suppliers will both be sharply re- duced in 1962. This should be of help, too, to all the products derived from aromatics. 106 C&EN MAY 21, 1962 ggjfdhfkdfjdfjsdklfsdflsdmfdlfmdfldmfkldfms skdsdsdmm dmsdsjdddjjkassdmdmddm sfsjfksdjfslkdfjlaskdldksldksdkdkdsl;dkas jsdskd sdjdjdj

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Page 1: Italian Chemical Trade Boom Continues

I N T E R N A T I O N A L

Italian Chemical Trade Boom Continues Chemical imports rise only 5.9% in 1961; exports go 23.7% higher; chemical trade almost balances

Italy's chemical industry continues to rack up impressive production and ex­port records, despite the storm signals now hoisted over Germany. Last year, Italian chemical producers increased their exports 23.7% over their 1960 levels, almost as good as 1960's 29% increase over 1959. And imports rose only 5.9%, after a 43% jump in 1960. Result: Italy's chemical trade shows a 1961 deficit of only $11 million, less than 20% of 1960's $58 million, and lowest since 1954. And total chemi­cal production in Italy rose 13%.

Meanwhile, the rest of the Italian economy showed sound progress rela­tive to last year. Over-all industrial production rose 9.5%. Imports rose 11.1% to $5.2 billion; exports rose 11.5% to $4.2 billion, both new rec­ords. The over-all trade deficit re­mained at about $1 billion but, as in 1960, tourism, shipping, and other fac­tors balanced the negative trade fig­ures. In fact, the Italian lira is now one of Europe's strongest currencies, and the country has relaxed many of its restrictions on currency exports.

But despite this rosy picture, Ital­ians must ask themselves, "How much longer can this go on?" Germany is running into very difficult going in both its domestic and foreign mar­kets. Business in France shows signs of tapering off. The Benelux coun­tries and Great Britain are also feeling the pinch of higher costs and tougher foreign competition.

The consensus among Europeans is that Italy can maintain high growth rates for several years longer than its neighbors. The reason is that Italy was almost an "underdeveloped" coun­try only 10 years ago, and still has an economically backward area in its South. Hundreds of thousands of Italians are either underemployed or work in other European countries with labor shortages. These two factors-unfulfilled demand, labor reserves-give Italy two advantages relative to the other European countries.

Trading Specifics. Italian chemical exports last year were worth $350 mil­lion, imports $361 million. Major im­ports were pharmaceuticals, plastics,

organics, and miscellaneous chemical products. But plastics imports were down slightly in value and tonnage. Major exports were fertilizers, pharma­ceuticals, plastics, and organics, all up 20% or more over 1960 levels.

The tightening European Common Market also had a hand in setting Italy's chemical trade pattern last year. Imports from ECM reached 46% of the total imports, and were up 10% over 1960, when they repre­sented 44.3% of the total. At the same time, ECM took 22.6% of Italy's ex­ports, compared to 20.1%' the year before and 18.5% in 1959. Value of exports to ECM rose 39.2% in reach­ing their new importance.

The United States, meanwhile, shipped some $98.2 million worth of chemicals to Italy, up about 6% from 1960 and representing about 27% of Italian imports of chemicals. The U.S. bought only $15.3 million worth, down 2% from the 1960 level, and a slight 4% of total Italian chemical ex­ports. Further, the much discussed Italian export of drugs to the U.S. amounted to only $2.7 million and at that was down 20% from 1960. This would indicate that dumping of Italian drugs in the U.S. may be somewhat over-rated in importance, and that Italy's proposed drug patent law (C&EN, April 9, page 74) will not have much effect on the U.S. market.

Domestic Developments. Italy's overcapacity in petrochemicals and plastics—polyvinyl chloride, polysty­rene, and polyethylene and their mon­omers in particular—continues to be a problem. Their prices in the world markets cause many headaches in other countries. And balance between domestic supply and demand seems to be many years away.

But in one area at least, aromatics, new plant capacity is an undisguised blessing. Italy has been short of aro­matics for years, since it has no coal of its own. It has been importing aromatics from the Soviet bloc and the U.S.

Just last month, though, Shell Itali-ana brought on stream at Rho a new plant to produce benzene, toluene», and xylene. Mobil Chimia Italiana will have a similar plant at Naples on stream sometime this summer. So de­pendence on imports and susceptibil­ity to price fluctuations from Soviet bloc suppliers will both be sharply re­duced in 1962. This should be of help, too, to all the products derived from aromatics.

106 C & E N MAY 21, 1962

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sfsjfksdjfslkdfjlaskdldksldksdkdkdsl;dkas jsdskd sdjdjdj

Page 2: Italian Chemical Trade Boom Continues

Last year Italy imported about 34 million tons of crude oil, 15% more than in 1960. Of that amount, the U.S.S.R. supplied 5.6 million tons or 16.5% of the total. This was more than the 14% maximum fixed in the Italo-Russian trade agreement. Ku­wait and Iraq are Italy's biggest crude oil suppliers. Together they shipped 18.6 million tons of crude to Italy last year.

Meanwhile, practically all segments of Italy's economy scored production gains in 1961. Production of coal de­rivatives and petroleum climbed by 12.5%; paper by 9.4%; and liquid and gaseous fuels by 4.5%. Italy's textile industry, however, failed to jump ahead. Textile production was off by 0.2% in 1961 compared to the pre­vious year. But output of cellulose for textiles was up by 14.4%.

Italy's Foreign Trade in Chemicals, 1955-61

Plastics (Thousands of tons)

Year Imports Exports 1955 12.2 28.5 1956 15.4 33.4 1957 18.6 24.2 1958 23.5 42.3 1959 43.9 60.4 1960 60.1 99.7 1961 58.8 130.0

Inorganic Chemicals (Millions of dollars)

Imports Exports 1955 $13.8 $23.4 1956 19.5 36.2 1957 24.9 28.2 1958 20.0 22.0 1959 20.5 17.2 1960 27.2 24.4 1961 30.7 29.6

Organic Chemicals (Millions of dollars)

Imports Exports 1955 $35.9 $19.0 1956 44.5 22.8 1957 48.0 28.1 1958 61.1 33.9 1959 62.6- 62.3 1960 80.7 54.3 1961 87.2 68.4 Source: l'Estero.

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Page 3: Italian Chemical Trade Boom Continues

France Intensifies Spending for Research Fourth Plan supplement designates $400 million to expand research and supporting services

Now that France's industrial strength is growing rapidly, French planners are giving more attention to research and the governmental activities needed to strengthen it. A special supplement to the government's Fourth Plan (1962-65) outlines the financial and organizational steps the country will take during the next few years to make France a net exporter of know-how.

The problem is clear, the planners say, when one considers France's bal­ance of payments in knowledge. From 1956 to 1960, the country re­ceived income from licenses and royalties from abroad of only $145 mil­lion, shelled out to other countries almost $306 million. To be sure, this net inflow of foreign know-how added valuable fuel to France's industrial furnace. But, the planners feel, up­grading their own educational and scientific work will make their enter­prises much less dependent on such imports.

The Fourth Plan, therefore, ear­marks over $400 million to strengthen government-controlled facilities for re­search and development. With it, new labs will be built, equipment bought, scientific centers expanded. Scientific

areas considered to be most in need of help will get more than areas already in good shape.

Other parts of the plan will ensure that industry gets tax credits for re­search spending, that the new educa­tional facilities get students, that the patent system is strengthened, and that the whole effort is kept in balance.

Science Gets $220 Million. The various scientific disciplines—chem­istry, physics, mathematics, medicine, and the like—will benefit from this plan to the tune of about $220 million. Interdisciplinary activities and general services supporting research (docu­mentation, automation, pollution con­trol, for example) will get about $110 million. The remaining $70 million is at the moment held in reserve.

The plan foresees about $11.5 mil­lion being spent for physical, inor­ganic, organic, and applied industrial chemistry. Biochemistry will get about S3.5 million from the biology budget. Other projections: mathe­matics, $23 million; physics, $71 mil­lion; agronomy, $53 million.

The $400 million will go mainly to scientific centers already in operation or under construction. About two thirds of it will be expended through

the National Ministry of Education, which controls universities and the Centre National de la Recherche Scientifique (CNRS).

CNRS is the principal organ through which France carries out systematic fundamental research. It employs more than 530 scientists and 2000 technicians (technically trained per­sons between the baccalaureate and the doctorate) directly. Further, it supports about 2800 scientists and 1600 technicians in other laboratories, most of which are attached to univer­sities. It maintains more than 50 different science centers.

Through CNRS, therefore, catalysis, chemical kinetics, radiochemistry, high temperature and pressure research, microanalysis, and cellulose chemistry will get extra support. CNRS instal­lations studying mathematics, physics, geology, agronomy, biology, oceanog­raphy, and medicine are also due for Fourth Plan outlays.

French Weakness. The French General Committee on Scientific and Technological Research points out that France's science weakness is readily pinpointed. Despite the net import of know-how by purchase of licenses and payment of royalties, France actually earns more money from selling licenses than it pays for buying them. The loss comes from royalties.

This indicates, the committee points out, that France is good at originating ideas but is weak in translating them into commercial practicalities. But, the group adds, it also suggests that the French patent system has helped make this so.

French patent applications are not studied for novelty, unlike those in the U.S., Germany, Switzerland, and many other countries. This not only affects the eventual user of a French patent, but it means that the French inventor is not immediately prepared to fulfill patenting requirements in countries where novelty is studied. It means, too, that the French applicant does not get feedback from the patent ex­aminers—and such feedback has many benefits to the inventor, according to the committee.

Thus, the committee hopes that France will revise its patent law to make study for novelty necessary. Not only will this be good in itself, but it will also harmonize French law with that of the developing European patent system (C&EN, Feb. 5, page 62).

At the same time, one of the gen­

France Imports More Know-How Than It Sells (million of dollars)

Receipts from Know-How Sold Cost of Know-How Bought

ii * - - - ^. ; /^ "*· - «£ Λ * To non-French users, licenses plus royalties "From non-French patents, licences plus royalties Estimated Source: Banque de France

si* -

Page 4: Italian Chemical Trade Boom Continues

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Page 5: Italian Chemical Trade Boom Continues

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Physics, Agronomy Research Get Biggest Support

Support (millions of dollars)

Science Mathematics $22.7 Physics 70.8 Chemistry 11.5 Earth sciences 16.5 Oceanography 5.8 Biology (includ­

ing biochem­istry) 20.5

Medicine 22.2 Agronomy 53.1 Social sciences 11.0

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* Centre National de la Recherche Scientifique. ** Includes documentation, public works, na­

tional standards, pollution, etc. *** For new projects determined during the

life of the Fourth Plan.

eral research services to be supported by this section of the Fourth Plan is documentation of the world's patent literature—not only in Paris but also in the various regions of France. This, the committee feels, will be of much value to French inventors interested in commercializing their inventions. In fact, about $4 million is set aside for this job.

BRIEFS

Ceramica Pozzi of Italy has signed an agreement with Goodyear Tire under which Goodyear will supply technical information for construction of a 40,-000 ton-a-year polyvinyl chloride plant by the Italian company at its $50 mil­lion petrochemical plant now under construction at Ferrandina.

North American Aviation's Atomics International division has been awarded a contract for design of a prototype nuclear power reactor by the Spanish government. Site for the 30,000-kw., heavy-water-moderated, organic-cooled reactor has not been

selected, but it is expected to be lo­cated along the Alberche River about 40 miles from Madrid.

Eurochemic (European Association for Reprocessing Spent Nuclear Fuel Elements) will increase its working capital from $21.5 million to $30.7 million so as to permit 184 more par­ticipants to share in its ownership. Eurochemic is the first common enter­prise of the European Nuclear Energy Agency. Already participating are government, quasi-government, and private interests from 13 European countries.

Fertilizers and Chemicals, Travancore, Ltd., has awarded a $1 million con­tract to Dorr-Oliver to design and equip a 300 ton-per-day fertilizer plant in Kerala State, India. The new plant will be able to make 100 tons of phos­phoric acid and 300 tons of ammonium phosphate per day. Fertilizers and Chemicals also is expanding its fer­tilizer plant at Alwaye, Kerala, by add­ing plants to make 150 tons a day of ammonia and 440 tons a day of am­monium sulfate. Fertilizers and Chemicals is controlled by the Indian government.

British American Oil plans to build a research and development center in the Toronto, Ont., area. Completion of the center is scheduled for late next year.

Refineria Panama, S.A., which is jointly owned by Continental Oil and National Bulk Carriers, has completed construction of Panama's first oil re­finery. The refinery, built by Bechtel Corp., can produce 30,000 barrels per day of refined products, including gasoline, jet fuels, heating and fuel oils, butane, and asphalts.

Badger, N.V., Dutch affiliate of Badger Co., will build and engineer the heavy mercaptans plant for N.V. Fabriek van Chemische Producten Vondelingen-plaat. The plant will be adjacent to Vondelingenplaat's present plant in the Pernis area of Rotterdam. The plant will use a Pennsalt process. Pennsalt has made a substantial in­vestment in Vondelingenplaat (C&EN, Jan. 22, page 36) .

110 C & E N M A Y 2 1 , 1 9 6 2

McKenzie

N0W.1