FOUR EUROPEAN SATELLITE COUNTRIES PURCHASE PLASTICS PLANTS FROM THE FREE WORLD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001100010001-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: November 16, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 1
• Publication Date: June 15, 1961
• Content Type: BRIEF

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CIA/RR-CB-61-34 Copy No.-
15 June ].961
CURRENT SUPPORT BRIEF
FOUR EUROPEAN SATELLITE COUNTRIES PURCHASE
PLASTICS PLANTS FROM THE FREE WORLD
OFFICE OF RESEARCH AND REPORTS
CENTRAL INTELLIGENCE AGENCY
This report represents the immediate views of the
originating intelligence components of the Office
of Research and Reports. Comments are solicited.
W-A-R-N-I-N-G
This document contains information affecting the national defense of
the United States, within the meaning of the espionage laws, Title 18
USC, Sections 793 and 794, the transmission or revelation of which
in any manner to an unauthorized person is prohibited by law.
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FOUR EUROPEAN SATELLITE COUNTRIES PURCHASE
PLASTICS PLANTS FROM H FREE WORLD
In one of the most significant steps to date in the Bloc campaign
to catch up with the Free World in chemical production, four European
Satellite countries recently contracted to buy $25 million worth of
plastics producing equipment and technology from the United Kingdom.
Under the terms of the contract, East Germany, Poland, Czechoslovakia,
and Rumania reportedly will each obtain equipment for a plant capable
of producing 24 thousand tons of polyethylene plastic per year. If
adequate provisions for raw materials have been made the plants should
be in full operation by the end of 1964 and will contribute signifi-
cantly to the attainment of 1965 goals for production of plastics in
the Satellite area. The transaction adds to the list of some 100 major
contracts for chemical plants, equipment and technology concluded by
the USSR and the European Satellite countries with Free World firms in
1958-60.
In April 1961 a consortium formed a year earlier by East Germany,
Poland, Czechoslovakia, and Rumania reached the agreement with two
British firms to buy equipment and technology for producing polyethy-
lene. 1/ Of the estimated $25 million provisional value of the con-
tract T20 million is to go to Simon-Carves Limited for engineering
work and equipment and. $.5 million to Imperial Chemicals Limited (ICI),
the firm.which.developed and patented the original polyethylene pro-
cess about 30 years ago.. Each country is reported to be buying spec-
ialized equipment and help in the construction and initial operation
of one 24-thousand ton plant. Construction work is scheduled for com-
pletion within three years. 2/
This single transaction represents an important move on the
part of the European Satellite countries to implement ambitious plans
for expansion of plastics production in the 1961-65 plan period.
Plastics production in these four countries is scheduled to rise
from an estimated 218,000 tons in 1960, mostly older types of plas-
tics, to roughly 800,000 tons in 1965. Of the 600,000-ton increase,
about 80,000 tons or 13 percent is estimated to be for polyethylene,
Which is not produced commercially in the Europe-an Satellites at
present. (Table 1) Bulgaria and Hungary also plan to erect poly-
ethylene plants during the period but the requisite technology and
equipment reportedly is to be obtained from the USSR rather than
from the Free World. 3/
The plans for production of polyethylene in the European Satel-
lites, as well as elsewhere in the Bloc,* are part of it general plan
to catch up with the Free World in the plastics field as well as in
other areas of chemical production.. In the polyethylene field the
Bloc is perhaps 10 years behind the West. The first commercial pro-
cess for making polyethylene was developed before World War Il: in the
*Soviet production in 1960 is estimated to have been very limited,
but plans call for production of about 300,000 tons in.1965. Cur-
rent plans for producting polyethylene elsewhere in the Sino-Soviet
Bloc are unknown.
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United Kingdom by ICI.* By 1939 polyethylene was being produced in
the United .Kingdom and by 1943 in the United States. 4/ Polyethylene
is a versatile plastic with applications ranging from the fabrication
of toys and houseware to the manufacture of electric insulating ma-
terial and piping, (Table 2), and in recent years it has become the
most widely produced plastic in the United States. (Table 3) Other
important producing countries now include the United. Kingdom, France,
Italy, West Germany, and Japan. The production of polyethylene is
not limited to the developed countries of the Free World.. For example,
Simon-Carves has built a polyethylene plant in India** and is building
plants in Mexico and Yugoslavia. 6/ Meanwhile, Bloc countries have
demonstrated interest in polyethylene but native research and develop-
ment work has lagged. Although polyethylene has many applications in
the consumers' goods field (which accounts for well over one half of
total United States consumption), a high percentage of Bloc production
will probably be used, at least initally, in the production of pro-
ducers' goods and military end products and in construction.
Although the plants to be erected in East Germany, Poland, Czecho-
slovakia and Rumania are evidently scheduled for completion by early
1964, full-scale operation probably will hinge on the availability of
ethylene, the main starting chemical. In turn, production of ethylene
will depend, in part, on imports from the Free World of equipment for
producing ethylene and the development.of a petrochemical base in the
Bloc. Information on progress in establishing these supporting facil-
ities is incomplete. East Germany, however, has purchased two ethy-
lene installations in the Free World to be completed in 1962 or 1963. 7/
Poland is to obtain pyrolysis equipment for an ethylene plant in Czech-
oslovakia. 8/ East German, Polish, and Czechoslovak production will
probably be based wholly or partly on the additional Soviet petroleum
which would be available before 1965 through the pipeline from the
USSR now under construction. In Rumania propane and propylene obtained
from domestic petroleum are to provide the starting materials for
ethylene production. 9/
*A high-pressure process. Subsequently, a number of low-pressure
processes have been developed, initially in West Germany. The
characteristics of high-pressure polyethylene vary somewhat from
those of low-pressure polyethylene.
**According to a trade agreement signed in 1960 India will ship
polyethylene to Czechoslovakia. 5/
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Current and Planned Production of Plastics in the
European Satellite Countries
Thousand Metric Tons
Total
Country ..Plastics
Polyethylene
1960 1965 1960 1965
European
Satellites, Total 233 882 neg. 100
East Germany 93 a/ 311 neg. d/ 50
Poland 54 199 0 10
Czechoslovakia 58 197
Rumania 13 95
Hungary 9 b/ 40
Bulgaria 6 40
a. 1955:
b. 1959.
c. Estimated.
d. Experimental basis.
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0 10 c/
0 10 c/
0 10 c/
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US Domestic Consumption of Polyethylene
by End ses, a
Quantity
(Thousand Metric Tons)
Total
Film and sheeting
Injection molding b/
Blow molded bottles
Other blow molding
Wire and cable insulation
Pipe and extruded shapes (n..e.c.)
Coatings
Miscellaneous
a. Excludes ,exports.
b. Primarily housewares and toys.
TABLE 3
US Production of Plastics
Thousand. Metric Tons
Total
Year Plastics Polyethylene
1948 674 11/
7 12/
1953 1,295 11/ 63 12/
1.958 2,112 11/ 392 11/
1960 2,721 13/ 606 11/
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percent
100.0
39.5
20.4
7.4
1.7
12.7
6.5
Polyethylene as
Percent of
Total Plastics
1.0
5.0
18.6
22.3
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Analyst:
Coord:
Sources:
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25X1A
1. US Embassy, London. Foreign Service Despatch, no. 1980, Bi-
weekly Economic Review no. 41, 21 Apr 61, p. 8. U.
2. UK, Comctel Reuters. East-West Trade News, no. 13-61, 29 May
61, p. 7. U.
UK, Chemical Age, 15 Apr 61, p. 616. U.
3. East Germany, Die Wirtschaft, 15 Feb 61, pr 16. U.
CIA.. FDD Summary no. 2603, Weekly Econmic Report on Eastern
4. US - D. Van Nostrand Co. Inc., Brag"Golding, Polymers and
5. Czechoslovakia, ^SNTL Technical D Best, February 1960, vol. II,
6. US, Oil,_Paint, and Drug Repoer, vol. 179, no. 16, 17 Apr
I 2_
7. UK, Chemical Age, 27 Feb 6V, p. 353. U.
8. Ibid., 25 Fe 1, p. 323 24. U.
9. JPRS: 6995, Selected E nomi.c Translations on Eastern Europe
(390), 29 Mar 61, p, U.
10. US, Modern Plastics, ,anuary 1961, p. 86. U.
11 -
12. US, Oil, Paint, and/brug Reporter, 28 Sept 59, sec -II, p. 23.
13. US, Modern Plastig(s, January 1961, p. 82. U.
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