INTERNATIONAL Capital Flows to Latin America Since W o r l d W a r II, investment rate exceeds any earlier period; chemical growth rate keeps pace u
NITED STATES direct private invest-
ments abroad are currently in excess of $22 billion and are expanding at a record rate. A t t h e e n d of 1956, Latin America's share of this w a s about $7 billion, an increase of $4 billion over a 1946 figure of $ 3 billion. According to the U . S. Department of Commerce, Office of Business Economics, in a report on "U. S. Investments in the Latin American Economy," this postwar investment rate exceeds that of any earlier extended period. And large capical expenditures appear to be continuing. Among major industries which share in this Latin American development are petroleum, manufacturing (including chemicals), and mining a n d smelting. The report gives a rather complete record, for its data are based upon reports from companies who account for about 90% of all U . S. company operations in Latin America. These companies h a d sales of $4.9 billion in 1955. Petroleum sales of about $1.9 billion originated largely in Venezuela, Colombia, a n d Peru where the output was about $1.6 billion, excluding sales of affiliated companies in countries where local production is small or nonexistent. Of total petroleum sales, over $900 million were made within Latin America, supplying much of the energy on which the area depends for economic development. T h e U . S. imported about $600 million of petroleum, and $400 million was sold for dollars to other foreign countries. • Chemicals Catch On. Manufacturing companies had a $1.5 billion output sold mainly in country of operation, with exception of meat products. Chemical sales totaled $342 million in Latin America in 1955 and were significant in Mexico, followed by Argentina and Brazil. Production a n d sale of chemicals is also becoming sizable in Colombia, Venezuela, and Cuba. Manufacturing sales by U . S. companies in Latin America reflect the differences in t h e size a n d development of the countries. Sales of from $300 to $400 million each were made in Argen72
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1958
tina, Brazil, and Mexico; $ 5 0 t o $100 million in Chile, Colombia, Cuba, a n d Venezuela. The Caribbean a n d Central American countries took less than $1 million each of products. Nearly half of t h e output of U. S. mining companies in Latin America consisted of Chilean copper a n d n i trates. Production and refining of nonferrous metals, sulfur, and other minerals was important also in Mexico a n d Peru in 1955, amounting to over $200 million and $80 million, respectively. Iron ore mining in Venezuela brought sales of about $50 million, making that country a major producer of metals a s well as petroleum. T h e U. S. companies who operate in Latin America contributed 3 0 % of all exports from the area in 1955, according to the report, and over one third of the exports t o the U . S. Sales of over $800 million to Europe and elsewhere included about $400 million of petroleum from Venezuela, about $100 million of sales of sugar a n d other agricultural products, largely from Cuba, a n d over $200 million in sales of metals a n d minerals from Chile, Mexico, a n d Peru. Some of t h e Latin American countries export one or a few major commodities produced largely by U. S. companies. But in t h e larger countries with more diversified economiesArgentina, Brazil, a n d Mexico—U. S. companies a r e less important as exporters. Their major contribution is to develop industrial capacity to supply growing local markets. U. S. company manufactures for local use in Chile, Colombia, Cuba, a n d Venezuela a r e small, but growing rapidly. Participation by U . S. companies in raising the productive capacity of t h e Latin American countries is an important factor. I n 1955, the companies included in the report made nearly $600 million in capital outlays for plant a n d equipment, n e t additions to inventories, and outlays t o explore and develop new sources of r a w materials. In 1956, capital outlays were over a billion; a n d in 1957 continued a t a high rate.
Petroleum o u d a y s were largest, more than $300 million in 1 9 5 5 . Manufacturing companies invested about $ 1 2 5 million in Latin America in t h e same year—$30 million in Mexico. Since 1946, t h e report continues, about $ 1 . 1 billion h a s been a d d e d to manufacturing investments in Latin America. Brazil accounted for a b o u t 4 0 % of t h e increase, Mexico 2 0 % . F o r t h e first time, such investment w a s sizable in Colombia a n d Venezuela. Chemicals, rubber, and automotive products accounted for a b o u t t w o thirds of postwar investments, with chemicals especially important. By 1955, the chemical industry accounted for about $35 million of plant, equipment, a n d inventory expenditures. T h e chemical industry spent $ 1 6 5 million in Latin America in 1955 for local purchases—$75 million in Mexico, $34 million in Argentina. T h e largest amounts of'tax p a i d t o Latin American governments w e r e b y r u b b e r , food, chemical, and automotive industries.
Holland Gets Rubber Plants Two synthetic rubber plants are slated to be b u i l t in T h e Netherlands. B. F . Goodrich and Algernene Kunstzijde Unie N . V . of A r n h e m , Holland, have formed a jointly owned company which will construct a p l a n t at Arnhem. Shell Pernis C h e m i s c h e Fabrieken N.V. will build t h e second p l a n t at Peniis. T h e two p l a n t s will serve different purposes. Shell's plant will produce a general purpose rubber. I t ' s initial capacity will b e at least 50,000 tons p e r year. T h e company chose t h e Pernis site because of shipping accessibility and r a w materials supply. The Goodrich plant will produce principally Goodrich special purpose Hycar nitrile latex, used for a variety of products such a s leather finishes, textile sizing a n d finishing, p a p e r saturation, a n d as a bonder f o r nonwoven fabrics. According t o Goodrich, t h e plant will be relatively modest in size, smaller than Shell's. T h e plant will b e ready about mid-1959 a n d will be t h e first in continental E u r o p e using B. F . Goodrich know-how to p r o d u c e m a n made rubber. The Arnhem plant is t h e fifth such venture of Goodrich. Such jointly owned or associate plants exist in Japan, Brazil, Mexico, and Great Britain. T h e plant in Great Britain is already p r o d u c i n g Hycar nitrile latex, and the Japanese plant 'has plans to produce this latex under w a y .
