Facing Capital Shortage

Press, Volume CVI, Issue 31170, 21 September 1966, Page 18

Facing Capital Shortage

It was significant that West Germany, which was one of the main sources of investment capital, should be feeling the pinch of the worldwide shortage of that capital, said Mr M. A. Connelly, M.P., who returned to Christchurch yesterday after a trip overseas.

Though Germany had brought 1.5 million workers from other countries to try to bridge its labour gap. there was still a shortage, particularly of skilled workers, he said.

“My overriding impression, however, was of the energy of the country,” he said. “Though Germany is facing the same capital shortage as the rest of the world, 1 feel the country is only marking time.” West German industry was fully committed, and there was a pause in the spectacular development, said Mr Connelly. The capital shortage

had been caused by demands from the Government, local authorities, and private borrowers.

The Federal Government was passing legislation to give it some control in the management of investment capital.

West German industry was as automated as was humanly possible, plants being designed to increase productivity and expand output while reducing costs to sell competitively.

Visiting the Dyckerhoff Cement Company at Frankfurt, Mr Connelly was shown the contrast between new and

old plants. The old plant had a capital investment of £11,250 a worker, and production of cement was 2500 tons a year a worker. In the new plant, capital a worker was £45,000, and output 4000 tons, for a total production of 800.000 tons a year higher that that of all the New Zealand cement manufacturers.

At the Bayer chemical plant near Cologne, he learnt that 5 per cent of the 3686 million marks annual turn-over was spent on research. The company had 10 or 12 economists continuously at work investigating foreign legislation, and