Free China has a fast-growing fertilizer industry and soon should become an exporting country.
The island has three principal producers: the Taiwan Fertilizer Company, the Kaohsiung Ammonium Sulphate Corporation, and the Mobil China Allied Chemical Industries.
Mobil China is the newest. It began operations in the latter part of 1963. Production is 100,000 metric tons of urea annually plus 45,000 metric tons of anhydrous ammonia to TFC for ammonium sulphate. KASC produces 120,000 metric tons of ammonium sulphate annually. The Taiwan Fertilizer Company has seven plants. It produces calcium cyanamide, calcium super phosphate, nitrophosphate, nitrochalk, urea, and ammonium sulfate in a volume of 640,000 metric tons of standard fertilizer (containing 20 per cent of nitrogen or 18 per cent of potash).
There are three minor fertilizer plants—the Southeast Chemical Works, Heng Yi Plant, and Enterprise Chemical Works. Each depends on TFC for its supply of ammonia.
The fertilizer industry entered upon a new era with the development of natural gas as an economical raw material for the production of nitrogenous fertilizer. Gas has cut production costs and enabled Taiwan fertilizers to compete more favorably on the international market. The government and fertilizer producers are trying to lower the cost of urea still further.
Chen Tsung-jen, president of the Taiwan Fertilizer Company, recently said his company will have a production surplus when a new plant is completed at Hsinchu next year.
Chen said TFC will be able to export more than 100,000 metric tons of fertilizer a year. He said production cost at the new plant will be low enough for international competition.
The Hsinchu plant is scheduled to begin production in August of 1968. Designed as the biggest liquid ammonia plant in the Far East, it will have annual output capacities of 163,500 metric tons of liquid ammonia, 90,000 metric tons of urea, and 135,000 metric tons of ammonium sulfate.
Before 1952, large quantities of chemical fertilizer had to be imported. Taiwan was then predominately agricultural. As much as 400,000 metric tons was imported each year, constituting a heavy drain on foreign exchange.
In 1953 came the nation's first four-year economic development plan. Things took a turn for the better. Fertilizer moved forward with big strides. New plants were built. New equipment was installed. The government provided assistance.
Production in 1952 was 15,000 metric tons of nitrogen and 13,000 metric tons of phosphoric anhydride. By 1964, at the close of the third four-year economic development plan, the Taiwan Fertilizer Company had opened a urea plant with an annual production capacity of 75,000 metric tons, nitro-chalk plant with capacity of 60,000 metric tons and a nitro phosphate plant with capacity of 30,000 metric tons. The Mobil China Allied Chemical Industries built a urea plant with an annual capacity of 100,000 metric tons.
Potash fertilizer still must be imported. Production of nitrogenous and phosphatic fertilizers has been sufficient to meet domestic requirements since 1964. Fertilizer exports began in 1959 when 13,500 metric tons of calcium cyanamide was exported to South Korea. In 1961 a similar sale of 21,730 metric tons was made. Taiwan sold 16,949 metric tons of urea to South Vietnam in 1962 under a barter contract sponsored by the U.S. Department of Agriculture. Similar sales were made in 1963. Low labor costs give Taiwan an advantage in international bidding. Exports also attest to the high quality of Taiwan fertilizers.
Exports to Europe
Trade between the Republic of China and European countries has been materially increased in recent years as a result of the efforts of government officials and industrial and trade leaders.
Free China is trading with 18 European countries: Austria, Belgium, United Kingdom, Denmark, France, Finland, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, West Germany. Iceland, and Liechtenstein.
China sold US$58,842,000 worth of goods to Europe in 1966, accounting for 10.3 per cent of exports.
Sales to Europe have climbed steadily during the 1960s. The volume was US$10,818,000 in 1960, US$38,763,000 in 1964 and US$51,892,000 in 1965. Imports from Europe were up from US$17,550,000 in 1960 to US$48,990,000 in 1966.
West Germany is the largest European trade partner. Last year the West Germans bought US$31,492,000 worth of Taiwan products to rank fifth among ROC customers. Japan was first at US$141,716,000, the United States second at US$111,921,000, South Vietnam third at US$89,170,000, and Hongkong fourth at US$33,712,000.
Principal imports from Europe are machinery and manufactured goods. Leading exports to Europe are such canned foods as mushrooms, asparagus, and pineapple.
In 1966, free China exported US$14,309,000 worth of canned asparagus, of which US$13.572,000 worth went to Europe. West Germany led the buyers with US$9,055,000, followed by the Netherlands, US$2,704,000; Belgium, US$1,160,000; United Kingdom, US$255,000; Sweden, US$216,000; Finland, US$48,000; Switzerland, US$42,000; Norway, US$31,000; Italy, US$25,000; Denmark, US$11,000; and France, US$6,000.
More than 60 per cent of free China's canned mushrooms went to Europe in 1966, earning US$15,708,000 in foreign exchange. West Germany took US$12,700,000 worth. Then came Holland, US$1,988,000; Belgium, US$413,000; Sweden, US$363,000; United Kingdom, US$138,000; Denmark, US$41,000; Italy, US$40,000; and Austria, US$25,000.
Exports of canned pineapple totaled US$19,307,000 in 1966, of which US$7,699,000 worth was sold to Europe. West Germany again was the leading buyer with US$3,815,000, followed by the Netherlands, US$1,693,000; Belgium, US$795,000; United Kingdom, US$525,000; Denmark, US$'215,000; Sweden, US$178,000; Switzerland, US$156,000; Italy, US$140,000; Spain, US$119,000; Norway, US$28,000; and Finland, US$15,000.
Other exports to Europe are citronella oil, feathers, textiles, preserved fruits, vegetables, metal manufactures, tea, chemicals, rice paper, bamboo and rattan products, cement, and other farm products.
Even Taiwan's perishable bananas found their way to Europe. Taiwan air shipped 200 pounds of the fruit to Italy in a trial sale. The Chinese Investment and Trade Service at Milan expressed hope that Italy, which imports 300,000 tons of bananas a year, will buy some from Taiwan.
Participation of trade fairs and other publicity measures have been employed to promote trade with Europe.
Since 1957, free China's products have been displayed at 20 European fairs. Six Chinese exhibitions were held in Europe last year.
The Chinese Government sent an 11-member goodwill mission to Europe last year. The mission was led by S. Y. Dao, secretary-general of the Council for International Economic Cooperation and Development. It left Taipei in February and visited Belgium, Luxembourg, the Netherlands, West Germany, Switzerland, and Italy.
A group of 10 industrial and business leaders went to Europe in May to seek new markets. This mission was headed by Ing Chang-ki, board chairman of the Reward Wool Industry Corporation.
Two goodwill missions from Italy visited Taiwan in 1965. A 17-member group led by Dr. Giuseppe Bettol came for two weeks. They urged closer economic ties between the two countries.
An Italian group of 15 members came later in 1965. Senator Virginio Bertinelli, the leader, said Italy is ready to share its chemical and marble production know-how with the Republic of China.
Many European trade leaders have visited Taiwan in recent years. George Burnay, director of the Foreign Trade Bureau of Belgium, came last April. He said Belgium is prepared to import textile products from Taiwan. He said manufacturers importing machinery from Belgium may have up to seven years of credit.
The Orient Overseas Line was admitted this year as a full member of the Far East Freight Conference, one of the world's most important shipping agreements.
C. Y. Tung, a Chinese shipping magnate, signed in London the agreement admitting the Orient Overseas Line, which is owned and operated by the Chinese Maritime Trust Ltd. of Taipei, a member of the C. Y. Tung group of shipping companies.
This is the first entry of a Chinese-owned line into a shipping conference organized in Europe.
Orient Overseas Line began service between the Far East and North America ports five year ago. European service was started with a voyage of the M. V. Ru Yung in July.
European service of the Orient Overseas Line should give impetus to free China's trade with that continent.
Wood Industry
Integrated operations of the Taiwan timber industry have resulted in diversified supply of wood products for domestic and foreign markets.
A pulp chip mill established in Ilan by the East-West Highway Development Administration with the assistance of the Joint Commission on Rural Reconstruction last year produced 30,000 cubic meters of chips for newsprint.
The chips are of superior quality, according to JCRR, and sell for US$5.75 per ton, about 3 per cent more than the floor price.
Another EWHDA—JCRR establishment in Han is a wood-working plant with annual production of 20,000 cubic meters. Its principal product is cypress strip flooring for export to Japan.
The plant's dried and treated lumber will be used for the bodies of railroad freight cars. The Taiwan Railway Administration has placed an order for 2,000 cubic meters of this lumber.
The plant also has produced 10,000 dozen spruce and hemlock hangers for the U.S. market in 1967. It can provide sash and door frames and other construction materials for residential construction.
JCRR praised the high log conversion rate of 83 per cent achieved by the plant. The 17 per cent waste is sent to the chip mill.
The two mills are operating on a 1-1/2 shift basis. Expansion is planned.
JCRR has approved a reforestation loan of US$250,000 as a continuation of a program begun in 1964. More than US$525,000 has been borrowed by 896 tree growers through the Land Bank.
During the last three years, 3,724 hectares of forest land has been replanted. The 1967 reforestation goal with JCRR loans has been fixed at 2,000 hectares.
A 10-year plan of forest conversion will start next January. The Taiwan Forest Bureau said the plan calls for expenditure of US$31,175,000. The first phase of 2,000 hectares was completed in June of last year with the help of the U.N. Food and Agricultural Organization.
The project seeks to replace 4,000,000 cubic feet of uneconomical trees with fir, pine, and cedar.
Wood production will be increased by three or four times with value doubled or tripled and 20,000 new job opportunities created.
Forestry experts are proposing a special zone where timber processing plants may be concentrated. Similar zones have been established in Japan for both export and domestic supply.
Processing zones may be set up at Taiwan ports now out of service.
Trade Sales Records
Free China had a US$500,000 favorable balance of foreign trade for the first half of this year, according to the Foreign Exchange and Trade Commission.
The nation had its first favorable trade balance of US$21 million in 1963, followed by a surplus of US$53 million in 1964. The year 1965, however, saw a reversal of the trend and a deficit of US$68 million, followed by another deficit of US$34 million last year. The record deficit of US$110 million was registered in 1961.
Exports of industrial products surpassed agricultural exports in a ratio of 53 to 47 in the first six months of 1967. Industrial exports accounted for 50 per cent of the total in 1962 as against only 5 per cent in 1952.
FETC statistics show that exports reached US$338 million during the January-June period, an increase of 65 per cent over the corresponding period last year. Imports amounted to US$337.5 million, a 65.9 per cent increase.
Textile products led exports at US$50.9 million, followed by bananas, US$43 million, and ores, metals and manufactures, US$34.6 million.
Sugar, formerly the biggest foreign exchange earner, dropped to fifth place at US$30 million.
Other major export items were chemicals, US$26 million; canned mushrooms, US$21.7 million; and cement and construction materials, US$12.3 million.
Ores, metals and products topped imports at US$50.9 million, followed by machinery and tools, US$49.9 million; cotton, US$25 million; vehicles, vessels and parts, US$24.8 million; wheat and cereals, US$20.2 million; crude oil and fuel, US$19.2 million; man-made fibers, US$17.1 million; electrical supplies, US$16.6 million; and chemical raw materials, US$11.7 million.
The trade gains were brought about by the continued diversification of export products and trading areas. To increase exports still further, the government is promoting such new products as electronic items, jewelry, wigs, and yachts.
The structure of Taiwan's exports has been changed significantly. The average annual growth rate of agriculture was 6.1 per cent and that of industry 13.2 per cent in 1966. In 1962, agriculture accounted for 35.3 per cent of the GNP and industry for 19.3 per cent. Last year's figures were 25.6 per cent for agriculture and 26.8 per cent for industry.
Food Sales to Hongkong
Farm products exported to Hongkong last year dropped to US$5,421,000, which was US$420,000 less than in 1965 and the lowest in the last four years.
The record of US$7,500,000 was set in 1963.
Fresh fruits topped the agricultural exports to Hongkong with US$1,180,000. Then came vegetables at US$1,034,000.
However, the situation changed abruptly as the Communists applied pressure in Hongkong during the spring of 1967. The Taiwan Agricultural Products Marketing Research Center said 4,275 metric tons of vegetables and fruits worth US$932,000 was exported to Hongkong in April of this year, an increase of 11 per cent over March exports.
Vegetables totaled 3,153 metric tons and represented 73.75 per cent of the April exports. Tomatoes topped the list with 769 metric tons worth US$135,000, followed by pineapples at US$130,000. Other exports included cabbages, carrots, cucumbers, ginger, and potatoes.
Taiwan is raising exports to Hongkong to a level of 6,000 metric tons to combat the Communist off-and-on embargo.
A fleet of eight cargo vessels has been assigned to carry vegetables from Kaohsiung to Hongkong on a regular basis.
The decision was reached at a meeting of representatives from the Foreign Exchange and Trade Commission, the Joint Commission on Rural Reconstruction, and the Taiwan Farmers' Association.
Exporters will improve packing so as to better preserve the freshness of vegetables.
The Assistance Commission for Retired Servicemen has been asked to increase the production on its truck farms.
Asia Needs More Cement
Asian markets are demanding more Taiwan cement, and business and industrial leaders are urging the government to help increase production.
In the first four months of this year, 488,800 metric tons of cement was exported. Principal buyers were Vietnam, Thailand, the Philippines, North Borneo, Indonesia, Hongkong, Korea, the Ryukyus, Australia, and Guam.
Production target for 1967 was 3,900,000 metric tons, mostly for domestic consumption. Asian orders are being turned away.
American Express Branch
American Express Company has opened a branch office in Taipei.
American Express has more than 40 branches in 15 countries. It had branches in Peiping, Shanghai, Tientsin, and Hangchow before the Chinese Communist takeover of the mainland in 1949.
This is the fifth foreign bank in Taipei. The others are the Bank of America, First National City Bank of New York, Bank of Bangkok, and Nippon Kangyo Bank.