LAG IN SOVIET EFFORTS TO CONSCRIPT PLANTS TO PRODUCE CHEMICAL EQUIPMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A002200050001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 9, 2016
• Document Release Date: March 20, 2001
• Sequence Number: 1
• Publication Date: January 1, 1965
• Content Type: BRIEF

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IN' 1 El LIGENCE BRIEF
JA/RR G13 65--5
January 1965
Copy No.
1.AG IN SOVIET EFFORTS TO CONSCRIPT PLANTS
^'y 'ROF)UC E c;H1,:MiC;AL. E'QUL1'MEN'I`
.( I'()RATF, OF INTELLIGENCE
Office of Research and Reports
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LAG IN SOVIET EFFORTS TO CONSCRIPT PLANTS
TO PRODUCE CHEMICAL EQUIPMENT
A year has now elapsed since the Soviet leadership announced a
major new effort to boost output of the chemical industry. An important
supporting role for this well-publicized program was to have been
assigned to certain machine building plants identified in December 1963
for partial conversion from their customary production to that of chem-
ical. machinery and equipment. Thus far it appears that this activity is
faltering badly.
The chemical, program as outlined by Khrushchev in December 1963
at a plenary session of the Central Committee of the Communist Party
called for massive investment through 1970 as shown in the following tab-
ulation-
Billion Rubles**
Total investment in the program
(including some investment in
other sectors)
42
Direct investment in the chemical
industry
25
Equipment
required for the program
16
Equipment
indus try
required for the chemical
10
It was evident to Soviet planners that the machinery required for the
program could not be met fully from a rapid expansion of the existing
chemical machine building industry and from imports. At that time,
Khrushcheve s Chairman of the State Committee for Chemical and Oil
Machine Building, Leonid Kostandov, rose to tell the plenum that nine
additional machine building plants would be called on to backstop the
Rubles nominally may be converted to dollars at the official rate of
exchange of 0. 90 ruble to US $1. This does not indicate, however, the
relative burden of the chemical program on the Soviet economy or the
true costs of the program in dollars. Ruble figures are intended to in-
dicate only that the requirements for chemical equipment through 1.970
are very large relative to present production. It is not intended to
suggest in any way the level of support for the program that might be
required from the nonchemical machine building sector.
S-E-C-R-E-T
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effort. Kostandov's list included two shipyards, two railroad equip-
ment plants, and several other plants producing various kinds of heavy
industrial machinery. In the weeks immediately following the plenum,
11 other nonchemical equipment plants were identified in the Soviet
press for conversion. 1/
1. Background
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A review of Soviet open-source information
for 1964 clearly suggests that the conversion program is not
going according to plan. Only in the case of the Zhdanov Shipyard in
Leningrad and a machine building plant in Kishinev has anything come
to light. The Zhdanov works is now producing heat exchangers and
condensers for chemical. combines, and the Kishinev works is produc-
ing "many types of machinery and equipment for the chemical industry.
These references, however, are not firm indications of conversion,
because both of these installations already were suppliers of limited
amounts of chemical equipment before December 1963.
Although Soviet political leaders traditionally are overly optimistic
in assigning new technological programs and generally expect more than
can be accomplished, they apparently missed the mark by a considerable
degree with the conversion program. There were hints almost from the
start that major difficulties were arising. As early as February of
1964, Khrushchev soundly castigated Soviet planners for failing to take
the necessary steps to promote the chemical industry because of
"parochial allegiance to this or that branch of production. " 2/ Some
of the bureaucratic foot-dragging can be explained by sheer inertia in
the Soviet planning system and by a strong desire on the part of indus-
trial managers to retain the type of production activity with which they
are most familiar rather than undergo a disruptive -- and bonus dimin-
ishing -- conversion to an unfamiliar product line, however well advised
it might be for the economy as a whole.
2. Specific Problems
Some of the concern., however, undoubtedly was based on the fact
that some of the plants identified for conversion were manifestly un-
suited to produce chemical equipment. One such plant is the Novo-
krama.torsk Metallurgical Equipment Combine in the Ukraine. This
industrial giant, which is geared to making mammoth castings and
forgings for the steel-processing industry, can produce and has produced
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equipment for the chemical industry, but for it to be required to
do so on a large scale would have amounted to a wholesale revamping
of the present production structure of the combine and the mothballing
of many large machine tools. The president of a US metallurgical
equipment factory somewhat similar to the Novokr.amatorsk combine
stated that such a conversion program would virtually put his company
out of business. Furthermore, this same official. said that were he the
Soviet industrial manager concerned, he would have no difficulty in pre-
senting a, convincing case against such a conversion.
There has been nothing in the Soviet press to suggest that the
leadership has now set aside the conversion program or that sufficient
chemical equipment is being produced by the specialized plants to
obviate the need for such conversion. In fact, there apparently are
some strong proponents of expanding the program, An article in the
JIu.l.y 1964 issue of Voprosy ekonomiki, the major Soviet economic jour-
nal, strongly urged that 30 to 35 machine building plants be converted
to production of chemical equipment -- not just the 9 originally iden-
tified by Kostandov -- because the present chemical: equipment industry
cannot be expanded rapidly enough through 1970 to fulfill requirements. 3i
Based on an announced planned increase of 55 percent during 1964-65,
an annual increase of 25 percent in production of chemical machinery
was needed to meet plans in 1964. The actual increase for 1.964 prob-
ably will be less than 20 percent.
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Sources:
1. CIA. CIA/RR CB 64-8, Soviet Conscription of Plants to Pro-
duce Chemical Equipment, Jan 64. S.
2. Pravda, 14 Feb 64. U.
3. Voprosy ekonomiki, no 7, Jul 64. U.
Analysts'
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Soviet Efforts to Conscript Plants to Produce Chemical E-LIRIPMER-1.1 January
Transmittal of Material
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Title La in Soviet Efforts to Conscript Plants to Produce Chemical
Equipment --- January 1965 (SECRET)
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