Effect of Soviet cancellation of petrochemical plant projects on east and west Europe and Malaysia
The Soviet Union has scaled down plans to build four petrochemical projects, each worth more than US $1 billion, over the next five years because it is giving priority to the re-equipment of plants. The project to build a polyvinyl plant on the shores of Lake Baikal in Siberia has been cancelled. Another scheme to build a nylon plant at Kursk has been delayed, but might still be resurrected during the present five-year plan (1986-1990). The two projects still going ahead, or which British companies are bidding, are a polyolefin plant in the north Caucasus and a polyester plant in the Urals. Despite the investment priority given by the Soviet leadership to high technology and re-equipment, diplomats in Moscow do not expect a surge of orders for Western companies. They say there are two reasons for this; Moscow wants to rely as much as possible on imports of machinery from Eastern Europe, notably East Germany and Czechoslovakia, in return for its exports of oil and gas. Senior officials say that where they cannot obtain high technology from West because of restrictive legislation they will not be prepared to accept less efficient equipment. The level of Soviet imports from hard currency supplies will be limited by the fall in Soviet exports revenues. These have been hit by a decline of some four per cent in oil exports last year and the drop in the world oil price. The Soviet Union needs to keep its customers for gas which has given increased leverage to consumers such as West Germany, Italy and France in the award of contracts. This was exemplified by the visit of Mme. Edith Cresson, the French Foreign Trade Minister, to Moscow to discuss increasing trade. Paris wants the Soviet Union to redress the adverse trade balance with France with amounted to 4.5 billion francs (L 410 million) in the first 11 months of last year.
- OSTI ID:
- 6827123
- Journal Information:
- Bus. Week; (United States), Other Information: JPRS-UCH--86-009, 9 May 1986
- Country of Publication:
- United States
- Language:
- English
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