RUMANIA LOWERS GOAL FOR SYNTHETIC RUBBER AFTER FAILING TO GET US PLANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A002300190001-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: December 12, 2016
• Document Release Date: January 31, 2002
• Sequence Number: 1
• Publication Date: August 1, 1965
• Content Type: BRIEF

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,AFTER FAILING TO GET US PLANT
DIRECTORATE OF INTELLIGENCE
Office of Research and Reports
CONFIDENTIAL
GROUP 1
Excluded from automatic
downgr,ading and
declossificatirn
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Copy 'No.
RUMANIA LOWERS GOAL FOR SYNTHETIC RUBBER
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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RUMANIA LOWERS GOAL FOR SYNTHETIC RUBBER
AFTER FAILING TO GET US PLANT
Rumania has cut back its 1970 plan for the production of synthetic
rubber because of failure to obtain a plant from the United States. Under
the new Five Year Plan (1966-70) the goal for the production of synthetic
rubber in 1970 has been reduced to 60, 000 tons from earlier proposals
for more than 100, 000 tons. Although the Rumanians are still interested
in buying a synthetic rubber complex, they apparently have concluded that
the delay in acquiring new facilities will prevent the output of synthetic
rubber in 1970 from rising much beyond the rated capacity of the existing
plant. The reduction in the goal for the domestic production of synthetic
rubber in 1970 may have forced the Rumanians to scale down goals for
production of rubber goods, notably tires.
1. Rumania's Output of Synthetic Rubber
In 1964, Rumania produced about 19, 400 tons of synthetic rubber, of
which 6, 600 tons was exported. The remainder -- almost 13, 000 tons comprised about one-third of the total rubber consumed for the manu-
facture of tires and other rubber products. Imports, chiefly of natural
rubber, were needed to meet residual requirements. Rumania's sole
producing facility -- a plant at Gheorghe Gheorghiu-Dej -- has operated
at well below its rated annual capacity of 50, 000 tons since it began pro-
duction in 1963. Moreover, the type of synthetic rubber produced,
styrene-butadiene, is inferior to natural rubber for such uses as heavy-
duty truck and aircraft tires.
As early as in 1960, Rumania was considering expansion of the
volume of production and the assortment of synthetic rubbers, not only
to eliminate dependence on imports but also to provide a significant
surplus for export. In 1963, Rumania first announced its intention of
purchasing a complex from the United States to produce polyisoprene and
polybutadiene, two new stereoregular rubbers. * Although the USSR
produces limited quantities of the new types of rubber, Rumania apparently
preferred to seek the required technology and equipment in the Free World.
Poland and Czechoslovakia as well as the USSR also have expressed inter-
est in purchasing such plants.
*~ The term stereoregular rubber applies to polymers, developed recently,
in which the molecular structure and properties closely resemble those
of natural rubber.
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2. Efforts to Buy A Synthetic Rubber Complex in the United States
In 1964, Rumania submitted to the United States a list of proposed
purchases of modern industrial plants, headed by a complex capable of
producing 60, 000 tons of polybutadiene and polyisoprene annually. With
the additional capacity, Rumania reportedly would be able to meet domestic
requirements fully and have an exportable surplus. Following negotia-
tions with several US firms, the Rumanians initialed a $50 million con-
tract in December 1964 with the Firestone Tire and Rubber Company for
purchase of the rubber complex. In April 1965, Firestone -abruptly
withdrew its offer, citing fears of commercial losses in the US market
stemming from adverse publicity by a major competitor and by groups
opposed to trade with Communist countries. This failure to obtain the
vitally needed complex came at a time when Rumania's new Five Year
Plan (1966-70) was in the final stages of preparation.
3. Adjustment to a Smaller Supply of Rubber
With no immediate prospect of producing stereoregular rubber,
Rumanian planners have reduced the goal for the production of synthetic
rubber in 1970 to 60, 000 tons, compared with the level of more than
100, 000 tons proposed earlier. The new goal is only slightly higher than
the rated capacity of the existing plant. Moreover, the 70-percent in-
crease planned for the output of synthetic rubber during 1966-70 is
significantly below the increase of 130 percent planned for the output of
chemicals as a whole. Inasmuch as most of the rubber produced in 1970
will be butadiene-styrene, Rumania will still require imports of natural
rubber. The extent of such imports cannot presently be determined,
because information is lacking on Rumania's trade plans. Details of
Rumania's supply position in 1963-64 and available data on plans for 1965
and 1970 are shown in the table.
The reduced goal for the production of synthetic rubber in 1970
probably has affected Rumanian goals for rubber products, particularly
tires. According to the new plan, the output of tires, scheduled at
1. 3 million in 1965, will increase less than 50 percent during 1966-70,
compared with the increase of 290 percent in 1960-64. It now seems
unlikely that Rumania will proceed with earlier efforts to acquire
another tire plant but will rely instead on expanding its two existing
plants .
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Rumania's Estimated Rubber Supply
1963-64 and Plans for 1965 and 1970
Metric Tons
1963
1964
1965 Plan
1970 Plan
Production
5 90606
19,373
35,000
60,900
Imports
3 ,b 000
27,700
N. A.
N.A.
Synthetic
16,800
5,4oo
N.A.
N.A.
Natural
19,200
22,300
N.A.
N.A.
Total supply
41,906
47,073
N.A.
N.A.
Exports (synthetic)
1,100
6,591
N.A.
N.A.
Consumption(apparent)
40,806
40,482
45,000
65,000
4. Prospects
In spite of the recent experience with Firestone, Rumania is still
committed to the further expansion and improvement of its rubber indus-
try. The complex for producing stereoregular rubber remains high on
Rumania's list of priority projects and efforts presumably will be :renewed
to find a supplier. Rumania's prospects for obtaining such a plant from
the United States may improve as a result of a recent White House state-
ment that such transactions are in the national interest. Although the
United States probably is in the best position to provide Rumania with the
type of plant desired, other potential suppliers also exist in Western
Europe. The delay already encountered suggests, however, that even if
a new contract is successfully negotiated, Rumanian production of syn-
thetic rubber in 1970 will not reach the level hoped for earlier.
Analyst:
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Rumania Lowers Goal for Synthetic Rubber After Falling to Get us
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2 4 August 1965
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