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Latin Costs Are Hard to Figure U.S, engineers need better understanding to estimate plant and operating costs in Latin America Estimating the cost of building and operating a chemical plant in Latin America is a difficult job. Many problems occur because U.S. engineers don't fully understand the "pioneering realities" with which a Latin American plant must contend. Inflation, labor and social changes, scarcity of supplies and electric power, and import duties are only a few of the factors engineers must take into account in order to come up with accurate plant-cost estimates, Monsanto's Joseph Flanagan told engineers attending the International Congress of Chemical Engineering in Mexico City. When all the specifics are accounted for, it usually costs as much to build a chemical plant in Latin America as it does in the U.S. According to Mr. Flanagan, figuring the cost of labor is one area where engineers frequently go astray. In Latin America, labor is paid an average of one fifth the U.S. rate. But several Latin American countries have large fringe benefits or social charges. In Argentina, for example, these extra labor costs add 449c to total production cost and in Mexico they add 20% compared to about 25f'/c in the U.S. Low labor cost may cause engineers to avoid installing labor saving devices, especially in smaller plants. In die U.S. a skilled chemical operator costs about $6000 a year, and since it takes four men for one operator position, an around-the-clock operation costs $24,000, explained C. E. Waring of W. R. Grace. If money for mechanization is borrowed at 5rA interest, and fixed charges add another 159c to production costs, then $120,000 in capital is needed to eliminate one operator position. In some Latin American countries, wages and other costs for four men would total only $2400 a year. Capital cost (on a before tax basis) may be 20 9r. Taking into account fixed charges of 15
