HUGE NITRATE FAILURE

Taranaki Daily News, 11 March 1933, Page 20 (Supplement)

HUGE NITRATE FAILURE

COMPANY’S £75,000,000 CAPITAL. LIQUIDATION IN Latest London files give particulars of the liquidation of Cosach, the £75,000,000 Chilean Nitrate Company. Cosach was largely the conception of the Guggenheims, an American firm interested in the commercial exploitation of scientific processes of one kind and another, though British shareholders of nitrate companies acquiesced in the merger, and the then Chilean Government, which was given a 50 per cent, interest In the new combine, smiled upon it. The new combine merged practically all the nitrate producing countries in Chile—the only country where natural nitrate as compared with synthetic nitrate manufactured from the air by a chemical process can be obtained—and controlled 95 per cent, of the country’s output.

And having formed the combine, Guggenheims started to produce nitrate by a new process which they owned, and on which they received a royalty. The process meant the doing away with a very large amount of labour, so that thousands of men formerly employed on the nitrate of incina were turned adrift.

It used imported petrol instead of Chilean coal; it had to produce more Chilean nitrate than world markets could take in order to operate at all, and the finished product was hardly any cheaper, if at all, them that produced under the old system. It did not even pay, for Cosach has never paid a dividend, and just recently announced a substantial loss on its last year’s working. Now the company is to be reorganised, and its capital written down by more than half, but much of the damage it has' done can never be repaired.