hoechst plans big spending abroad

2
International European Science Foundation takes shape Its main task will be to promote fundamental research in West Europe by fostering closer scientific cooperation A European Science Foundation, a long time in coming, seems to be on the verge of becoming a reality. Prepa- rations leading to the setting up of the organization have now been hammered out in Paris. Next May, representatives of the supporting bodies from 15 Euro- pean countries plan to meet in Stock- holm to discuss the first draft of its statute and to decide where it shall have its headquarters. The foundation is expected to come into being by 1975. The principal task of the new Euro- pean Science Foundation (ESF) will be to promote fundamental research in western Europe by fostering closer co- operation and collaboration among re- search workers there. This will be done mainly by stimulating an exchange of ideas and information, by making it easier for researchers to move among the various countries, and by generally harmonizing the research programs and activities of ESF members. These members will consist of a large number of academies and re- search councils in the 15 cooperating Walker: collective projects 8 C&ENOct. 22, 1973 countries—Austria, Belgium, Den- mark, France, West Germany, Greece, Ireland, the Netherlands, Norway, Por- tugal, Spain, Sweden, Switzerland, the U.K., and Yugoslavia. The member or- ganizations won't be limited to one for each country. Denmark, Norway, and Sweden, for instance, each will have six societies within ESF; the U.K. will have seven. All told, there will be about 50 learned national bodies asso- ciated with the foundation, at least ini- tially. Similar societies in other Euro- pean countries may eventually elect to join. "We don't envisage ESF as becom- ing an executive body as such," com- ments Raymond (Henry) Walker, sec- retary of Britain's Science Research Council, who chaired the international working group leading to the recent Paris session. "We expect to harmonize activities rather than take executive action. We visualize ESF as providing a forum or a marketplace, so to speak, where scientists of the member organi- zations can exchange ideas and harmo- nize their efforts by exploring, for ex- ample, the possibility of undertaking collective projects." ESF eventually may develop to where it could make grants toward supporting collaborative programs, Mr. Walker thinks, though this is unlikely in its early stages. "The most important step that we have taken at this point," Mr. Walker says, "is the decision to set up a formal preparatory commission rather than continue as we had been doing pretty much on an ad hoc basis." This eight- member committee will be chaired by Dr. Hubert Curien, principal scientific adviser to the French government and, until recently, director general of Fran- ce's National Center for Scientific Re- search. .It will meet frequently in com- ing months to draw up details of the new organization to prepare for the Stockholm meeting next summer. Initially, ESF probably will have an annual budget of about $600,000 to fund a small secretariat. Dues will be contributed by the members, probably on the basis of each country's gross na- tional product. The president will be a prominent scientist elected for a set period. If, as now seems likely, ESF gets off the ground, it will have succeeded where the European Economic Com- munity so far has failed. The need for EEC machinery to promote closer co- operation among science programs of the community members has been dis- cussed for some time. A blueprint of action was drawn up by the EEC com- missioners in June 1972, largely at the instigation of Dr. Altiero Spinelli, who at that time was the commission mem- ber with special responsibility for in- dustrial affairs and science. It suggest- ed establishing three groups within EEC—a European Research and De- velopment Council, a European Science Foundation, and a European Research and Development Agency (C&EN, July 10, 1972, page 20). And at their summit meeting in Paris just a year ago, the heads of state of the nine EEC countries stressed the need of de- fining and developing a common communitywide policy in science and technology. Earlier this year, Dr. Ralf Dahrendorf, Dr. Spinelli's successor, proposed broad guidelines for EEC to follow in areas of education, scientific information exchange, and research. Dr. Dahrendorf says he welcomes the emergence of the new ESF, which, he notes, fits in with EEC aims for re- search cooperation. Moreover, the foundation's member organizations will include several from eight EEC countries. (Organizations in Italy have expressed interest in joining but to date haven't committed themselves to do so.) ESF will embrace all branches of science, including health sciences, eco- nomics, and social sciences, and also the humanities. Its stress will be on advancement of knowledge through collaborative fundamental research. Study areas in which it may arrange such collaboration include geophysics of the oceans, epidemiology, physical chemical analytical methods, special strains of plant and animal cell cul- tures, and special facilities for millime- ter-wave astronomy. ESF also will maintain close liaison with other inter- national scientific bodies to help en- sure that work is not duplicated. Hoechst plans big spending abroad Farbwerke Hoechst's plans for a mas- sive worldwide investment program during the coming 10 years (C&EN, Oct. 8, page 4) call for nearly half its total capital spending of about $800 million annually to be invested in proj- ects outside West Germany. The program will center mainly around three broad sectors of the com- pany's activities: dyes and pigments, synthetic fibers and their raw materi-

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International

European Science Foundation takes shape Its main task will be to promote fundamental research in West Europe by fostering closer scientific cooperation

A European Science Foundation, a long time in coming, seems to be on the verge of becoming a reality. Prepa­rations leading to the setting up of the organization have now been hammered out in Paris. Next May, representatives of the supporting bodies from 15 Euro­pean countries plan to meet in Stock­holm to discuss the first draft of its statute and to decide where it shall have its headquarters. The foundation is expected to come into being by 1975.

The principal task of the new Euro­pean Science Foundation (ESF) will be to promote fundamental research in western Europe by fostering closer co­operation and collaboration among re­search workers there. This will be done mainly by stimulating an exchange of ideas and information, by making it easier for researchers to move among the various countries, and by generally harmonizing the research programs and activities of ESF members.

These members will consist of a large number of academies and re­search councils in the 15 cooperating

Walker: collective projects

8 C&ENOct. 22, 1973

countries—Austria, Belgium, Den­mark, France, West Germany, Greece, Ireland, the Netherlands, Norway, Por­tugal, Spain, Sweden, Switzerland, the U.K., and Yugoslavia. The member or­ganizations won't be limited to one for each country. Denmark, Norway, and Sweden, for instance, each will have six societies within ESF; the U.K. will have seven. All told, there will be about 50 learned national bodies asso­ciated with the foundation, at least ini­tially. Similar societies in other Euro­pean countries may eventually elect to join.

"We don't envisage ESF as becom­ing an executive body as such," com­ments Raymond (Henry) Walker, sec­retary of Britain's Science Research Council, who chaired the international working group leading to the recent Paris session. "We expect to harmonize activities rather than take executive action. We visualize ESF as providing a forum or a marketplace, so to speak, where scientists of the member organi­zations can exchange ideas and harmo­nize their efforts by exploring, for ex­ample, the possibility of undertaking collective projects." ESF eventually may develop to where it could make grants toward supporting collaborative programs, Mr. Walker thinks, though this is unlikely in its early stages.

"The most important step that we have taken at this point," Mr. Walker says, "is the decision to set up a formal preparatory commission rather than continue as we had been doing pretty much on an ad hoc basis." This eight-member committee will be chaired by Dr. Hubert Curien, principal scientific adviser to the French government and, until recently, director general of Fran­ce's National Center for Scientific Re­search. .It will meet frequently in com­ing months to draw up details of the new organization to prepare for the Stockholm meeting next summer.

Initially, ESF probably will have an annual budget of about $600,000 to fund a small secretariat. Dues will be contributed by the members, probably on the basis of each country's gross na­tional product. The president will be a prominent scientist elected for a set period.

If, as now seems likely, ESF gets off the ground, it will have succeeded where the European Economic Com­munity so far has failed. The need for EEC machinery to promote closer co­operation among science programs of the community members has been dis­cussed for some time. A blueprint of

action was drawn up by the EEC com­missioners in June 1972, largely at the instigation of Dr. Altiero Spinelli, who at that time was the commission mem­ber with special responsibility for in­dustrial affairs and science. It suggest­ed establishing three groups within EEC—a European Research and De­velopment Council, a European Science Foundation, and a European Research and Development Agency (C&EN, July 10, 1972, page 20). And at their summit meeting in Paris just a year ago, the heads of state of the nine EEC countries stressed the need of de­fining and developing a common communitywide policy in science and technology. Earlier this year, Dr. Ralf Dahrendorf, Dr. Spinelli's successor, proposed broad guidelines for EEC to follow in areas of education, scientific information exchange, and research.

Dr. Dahrendorf says he welcomes the emergence of the new ESF, which, he notes, fits in with EEC aims for re­search cooperation. Moreover, the foundation's member organizations will include several from eight EEC countries. (Organizations in Italy have expressed interest in joining but to date haven't committed themselves to do so.)

ESF will embrace all branches of science, including health sciences, eco­nomics, and social sciences, and also the humanities. Its stress will be on advancement of knowledge through collaborative fundamental research. Study areas in which it may arrange such collaboration include geophysics of the oceans, epidemiology, physical chemical analytical methods, special strains of plant and animal cell cul­tures, and special facilities for millime­ter-wave astronomy. ESF also will maintain close liaison with other inter­national scientific bodies to help en­sure that work is not duplicated.

Hoechst plans big spending abroad Farbwerke Hoechst's plans for a mas­sive worldwide investment program during the coming 10 years (C&EN, Oct. 8, page 4) call for nearly half its total capital spending of about $800 million annually to be invested in proj­ects outside West Germany.

The program will center mainly around three broad sectors of the com­pany's activities: dyes and pigments, synthetic fibers and their raw materi-

als, and plastics and waxes. "These three sectors account for about half of all the new projects that we intend to start next year," according to Dr. Rolf Sammet, Hoechst chairman. In the case of dyes and pigments, he says, about half of the sum is intended for expansion of existing capacities in West Germany and the erection of new plants. In the case of fibers and plas­tics, most of the capital expenditure will be concentrated abroad.

The U.S. will come in for a major slice of the investment cake. According to Dr. Sammet, more than $83 million annually will go toward facilities in North America, mainly in the U.S. Elsewhere, $166 million will be spent yearly in European countries other than West Germany, $73 million will be spent in South America (most of it in Brazil), and $52 million will be spread among Africa, Asia, and Aus­tralia.

Dr. Sammet notes that sales of Hoechst's products are growing at a faster rate outside West Germany than they are in the country. Moreover, fac­tors such as rising German labor costs and the drop in the parity value of the mark relative to the dollar and other major currencies are making it increas­ingly difficult for West German exports to compete in foreign markets and still show an adequate profit.

Dr. Sammet points out, for example, that during the first eight months of this year, his company's exports to the U.S. "have risen at a below average rate. In the case of some of our prod­ucts, we have ceased exporting alto­gether." He singles out synthetic fibers and pharmaceuticals as having dropped in export sales to the U.S., while exports of dyes "are stagnating."

According to Dr. Sammet, there are three reasons for this development— reductions in sales revenue attribut­able to parity changes, cessation of noncompetitive export business, and replacement of exports by expansion of production facilities in the U.S. On the other hand, profits being turned in by wholly owned American Hoechst Corp. "can be really described as good," he observes.

American Hoechst, headquartered in Somerville, N.J., is thriving, with sales last year amounting to $260 million and a staff of more than 5000. This year, the sales are expected to grow to around $310 million. The company has two principal production centers. At Bridgewater, N.J., the company makes a range of products, including dyes and pigments, drugs, organic intermedi­ates, polyvinyl chloride film and sheet­ing, and polyester monofilaments. And at Spartenburg, S.C., the company makes polyester staple fibers and fila­ments in a $150 million complex.

Hoechst's consolidated sales of its West German operations during the first eight months of this year, Dr. Sammet notes, advanced 15.4% to around $2.85 billion compared with the

Sammet: U.S. gets major slice same period last year. Domestic West German sales increased by 12.1% to $1.54 billion, while exports moved up 19.6% to $1.32 billion. "On the other hand," he says, "we have experienced during these first eight months a fur­ther net reduction in the price of our company's products. At home, losses in sales revenue due to price reductions amounted to more than $11 million. Losses of almost $38 million in our ex­port business were also attributable to this cause."

A rise in labor costs, which moved up nearly 13% per employee in West Germany this year, also has eroded profits, as have increased costs of raw materials and feedstocks.

Partially offsetting these adverse conditions have been cost reductions made possible by operating plants at full capacity. And, Dr. Sammet adds, expansion of sales has been achieved without a corresponding increase in personnel.

Hoechst's global sales this year likely will exceed $6.2 billion and the compa­ny's management is looking to a dou­bling of total sales in the next 10 years, an overall annual growth rate of 7.2%. But this growth won't be evenly dis­tributed throughout the world. Dr. Sammet expects that the rate of sales increase will be 25% higher in other European countries and 50% higher in countries outside Europe than in West Germany itself. This will mean that the company's domestic sales by 1983 will account for less than the current 40% of total income.

However, Dr. Sammet adds that the expansion plans being contemplated don't represent a shift away from pro­duction in West Germany. "According to our current thinking, in 10 years' time some two thirds of our world sales will still come from production units in Germany," he notes.

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