WesWorld

Placeholder for information relating to formal economic development proposals made by Germany in-game.

Abstract: At the present time the Brazilian market for steel is highly dependent upon foreign sources for supplies, and a drain upon scarce foreign exchange reserves. The availability of steel and steel products is a significant limiting factor in domestic economic growth. The domestic iron and steel industry is not structured nor endowed with the capital resources to expand to meet the increasing demand. Limiting resources for expansion are coal, steel scrap and electric power. Coal reserves are poorly located and are of marginal quality. The domestic demand for steel products can support the creation of a modern integrated steel mill, with an estimated cost of RM 125,000,000. The port of Vitória in the province of Espírito Santo is the recommended location for such a steel mill.






The available statistical data indicates that there is a strong internal demand for pig iron and cast iron products as well as for the consumption of steel and steel products. The existing Brazilian iron and steel industry is not capable of meeting the internal demand at this time. While a formal summary of the existing industry follows, it is noteworthy that despite the recent entry into the Brazilian market of foreign capital, it has not had sufficient impact upon the iron and steel industry to address the two most important considerations thrown into light by the current state of the market.

• The cost of imported rolled steel products represents a continuing drain on Brazil’s foreign currency reserves.
• The availability of steel and steel products is a significant limiting factor in the growth of the Brazilian economy in all sectors.




Acos Villares Sociedade Anonima, Sao Caetano do Sul, Sao Paulo
This firm was founded in 1939, and its works is presently under construction. It is intended as a producer of special steels using electric furnaces to smelt steel scrap and pig iron. The estimated capacity of the works as planned is 30,000 tonnes per annum

Companhia Brasileria de Usiminas Metalurgicas, Barao de Cacais, Minas Gerais
This firm was founded in 1925 and operates two works. The principal works is a blast furnace at Barao de Cacais presently producing 70,000 tonnes of pig iron per annum; a secondary works at Sao Goncalo, Rio de Janiero, has a rolling mill for small bars, nails and other merchant products.

Companhia Ferro Brasilero Sociedade Anonima, Caete, Minas Gerais
This firm was founded in 1931 with the participation of French interests. It operates a facility for the production of centrifuged iron tubes and iron foundry products. The works has a capacity to produce up to 30,000 tons of pig iron, most of which is consumed internally.

Companhia Siderurgica Belgo-Minera Sociedade Anonima, Sabera, Minas Gerais
This firm was organised in 1921 with the participation of Belgian interests, and it currently is the principal iron and steel producer in the country. At Sabera it operates an integrated steel mill with a charcoal-based pig iron capacity of 40,000 tons per annum, a Siemens Martin steel shop of 50,000 tons capacity and a non-flat rolling mill of 60,000 tons capacity. At its Monlevade plant is operates an integrated mill with a charcoal-based pig iron capacity of 30,000 tons per annum, a Siemens Martin steel shop of 40,000 tons capacity, a flat rolling mill of 24,000 tons capacity and a non-flat rolling mill of 20,000 tons capacity.

Companhia Metalurgica Barbara, Barra Mansa, Rio de Janeiro
This firm was founded in 1937 to manufacture centrifuged iron tubes. Its works have only been recently completed, but have a planned capacity is 100,000 tonnes. Currently the works are producing 20,000 tonnes of iron tubing per annum plus 7,000 tons of other iron products.

M. Dedini Sociedade Anonima, Piracicaba, Sao Paulo
This family-owned firm produces iron and steel castings, billets, bars, shapes and wire rods using electric furnaces. The works as an ingot capacity of 24,000 tons per annum, a non-flat rolling mill capacity of 14,000 tons per annum, a steel foundry of 6,000 tons per annum and an iron foundry of 10,000 tons per annum.

Mineraco Geral do Brasil Limitada, Sao Caetano, Sao Paulo
This family-owned firm was founded in 1938 to acquire and operate existing iron and steel plants. Its principal works at Sao Caetano has a pig iron capacity of 25,000 tons per annum, a Siemens Martin steel shop with a capacity of 24,000 tons per annum, and a non-flat rolling mill of 30,000 tons capacity per annum. It produces billets and wire rods. The firm’s Usina Santa Olimpia works produces light bars and shapes in its own electric furnaces using scrap. It has an ingot capacity of 20,000 tons.

Sociedade Anonima Comercio e Industria Souza Noscheze, Sao Paulo, Sao Paulo
This firm was founded in 1920 and operates two electric furnaces which provide castings and ingots for sale to other firms, or are worked up as light bars. Its capacity is 15,000 tons per annum.

Siderurgica Barra Mansa Sociedade Anonima, Barra Mansa, Rio de Janeiro
This firm was established in 1937 to produce pig iron using charcoal. The planned capacity of the works is 50,000 tons per annum, but at the present time the works are capable of producing 15,000 tons of pig iron, and such production is limited by the availability of charcoal.

Unina Quires Junor Sociedade Anonima, Itabirito, Minas Gerais
Founded in 1891 this firm is the oldest in the Brazilian iron and steel sector. The Usina Esperanza works has the capacity to produce 27,000 tons of pig iron per annum, plus 6,000 tons of foundry iron per annum, as well as up to 6,000 tons of steel foundry products per annum.

Summary: In its current state the Brazilian iron and steel industry cannot support the industrial development of the Empire. The existing firms do not have the capital resources to make major investments to expand domestic production and foreign capital has heretofore not been willing to make available funds for expansion. Many of the existing firms are located in niche markets and are not capable of serving the national market for iron and steel products. Those integrated steel mills that exist are dependent upon charcoal for the fueling of their blast furnaces, which in itself is a limiting factor due to availability and cost.






Despite possessing total iron ore reserves estimated in excess of 15,400,000,000 tonnes, and working mines with reserves in excess of 1,000,000,000 tonnes, the current exploitation of iron ores in the Empire of Brazil is quite under-developed. In the year 1938 Brazil mined and processed ore with metal content of 360,000 tonnes – and this includes ore exported abroad. While far recovered from its low point of 65,000 tonnes in 1934, the recovery of the industry’s strength has been slow and is far below that required to sustain national growth.

Manganese, an essential component of modern steelmaking, is available in Brazil. Indeed, Brazil possesses eighty percent of the known reserves of manganese in South America. Most of these reserves are located in Minas Gerais, in relative proximity to existing iron ore reserves. While total reserves are estimated in excess of 150,000,000 tonnes the reserves located in that province – some 16,000,000 tonnes – are considered sufficient to sustain a first phase of expansion of the national steel industry.

Metallurgical coal is the primary component of steelmaking, and in this regard Brazil is less well endowed than in iron ore or other inputs. Substantial coal reserves exist in the province of Santa Catarina – it is estimated that reserves there are in excess of 1,700,000,000 tonnes. However, the coal is of poor quality due to its high ash content – eighteen percent. An ash content of thirteen percent is considered the maximum level for the coking process, and a level of not more than four percent is deemed preferable by the steelmaking industry. Studies of samples of coal obtained in Santa Catarina suggest that after extensive and expensive washing and preparation forty-seven percent of Santa Catarina coal might be rendered fit for use in metallurgy, and twenty-eight percent might be usable for steam generation; the remaining twenty-five percent would be unfit for any industrial use. These facts, the location of domestic coal reserves far from other resources or industrial markets and the under-developed nature of the transportation network in the southern portion of the Empire have significant impact upon the decisions to be made in locating any modern integrated steelworks.

While considered viable for small-scale smelting of iron ore, charcoal is not a substitute for metallurgical coal on a significant scale. Nevertheless the existing steel industry has exploited this resource with success; unfortunately, the consumption of forest reserves in the immediate vicinity of blast furnaces has steadily increased the cost to producers of this resource due to transportation from more distant forests or in the reforestation of areas nearby. Viable forest management techniques have allowed the iron industry to make use of charcoal as a substitute for good metallurgical coal but its continued ability to do so is open to question.

Limestone to serve as a flux in the steelmaking process is essential, and Brazil has abundant limestone resources throughout the country. High-grade dolomite deposits are located in Minas Gerais and Rio de Janeiro and are considered more than adequate to support development of a national steel industry.

Steel scrap, whether internal from the steelmaking process or external from metal recovery, is an important input to the steel making process. Many of the existing small mills are highly dependent upon recovered scrap for reprocessing. At the present time, scrap is a limiting resource in expansion of the industry and further growth will necessitate the import of scrap steel for a considerable time.

Electric power is also important for modern steelmaking, whether to power the mills themselves or in electric reduction furnaces in the smelting process. In this regard the existing Brazilian power sector is considered under-developed, which has led to high costs. Prevailing electric rates per 1,000 KwH average RM 105 (converted at the official market rate of RM = $0.20). Without concomitant expansion of available supplies, electricity will also be a limiting factor in the expansion of the steel industry.




The current state of the steel market within the Empire of Brazil can support the creation of at least one modern integrated steel mill of European or American scale; given the strong demand for imported iron and steel products and the projected growth of the Brazilian economy, additional integrated steel mills are likely to be required in the future. The parameters of this projected steel works would include:

• Conversion ovens with a capacity of 400,000 tons of coke and coke-byproducts per annum
• Blast furnaces with a capacity of 1,200,000 tons of pig iron per annum
• Siemens Martin furnaces with a capacity of 1,000,000 tons of raw steel per annum
• Flat rolling mill capacity of 600,000 tons of finished steel per annum
• Non-flat rolling mill capacity of 400,000 tons of finished steel per annum

The facility would require two large blast furnaces of 1,300 cubic meters capacity and at least eight Siemens Martin furnaces each of 350 tons capacity to achieve the projected production of iron and steel. The rolling mill division of the works would include a blooming mill; two billet mills – one of 630mm and one of 450mm; section mills of 600, 500, 450, 300 and 250mm; a plate mill of 1250mm and a continuous sheet mill. Such a facility would be capable of producing a wide range of products required for further finishing by other firms in the iron and steel sector or for immediate sale to firms in other sectors of the economy.

The cost of such a facility is projected at RM 125,000,000, as detailed below:



Due to the marginal suitability and higher costs of metallurgical coal supplies from the border regions of Santa Catarina province, it is recommended that the proposed integrated steel mill be constructed at a tidewater location, to make best use of imported metallurgical coal. Construction of the mill at an inland location would have serious implications on the costs of construction and the cost per ton of output when the plant is functioning.
The recommended location for construction of the proposed integrated steel mill is the port of Vitória in the province of Espírito Santo. It is located in the most developed of region of the empire, and is strategically located close to the major urban centres of the country. Labor costs are low compared with inland regions, and no extraordinary infrastructure costs are anticipated. There are existing rail linkages to the industrial centres of Rio de Janeiro via the Leopoldina Railway. The port has more than sufficient capacity to handle shipping necessitated by the import of coal, and can accommodate the vessels required to carry shipments of finished steel to markets further afield.

Location of the steelworks here would necessitate construction of rail linkages with the iron ore producing regions inland. The cost of constructing a railway linking the principal mines in the valley of the Rio Doce with Vitória is considered the least-cost option as compared with constructing the steelworks near the mining areas themselves – necessitating the carriage of coal inland or from far-distant domestic sources, or constructing the steelworks at some third location and adding to the transport costs of all inputs. A separate recommendation regarding the movement of iron ore from inland regions to the coast is addressed in Annex B below.

Baring industrial action or the intervention of outside forces, it is projected that completion of the construction phase of the integrated steel mill can be attained within three years of the start of construction. The training of an initial cadre of Brazilian technicians can be undertaken in that timeframe to minimize the need for continuing foreign personnel.



Annex A – Proposal for Financing Construction of the Integrated Steel Mill

It is proposed to create a new company to undertake the construction and subsequent operation of the proposed integrated steel mill. The name Companhia Siderurgica Imperial Sociedade Anonima (Imperial Steel Company Ltd.) is proposed for this entity. The construction of the steelworks itself is estimated to cost RM 125,000,000, and to maintain operations the firm would require additional working capital. The proposed Companhia Siderurgica Imperial would require a total capitalisation RM 150,000,000 plus RM 50,000,000 of bonded debt, viz.

• Mortgage bonds at 4% per annum, maturing in forty years: RM 50,000,000
• Preference shares: RM 10,000,000
• Common shares: RM 140,000,000

The proposed division of the common shares is as follows:

Reserved for Brazilian Investors: 60.00%
Friedrich Krupp AG: 15.00%
Vereinigte Stahlwerke AG: 15.00%
Mitteldeutsche Stahlwerke AG: 7.50%
Deutsche Edelstahlwerke AG: 2.50%

The non-voting preference shares would be held by the German partners, and would be entitled to twenty-five percent of all dividends declared over five percent.

The mortgage bonds would be held by the Reichsbank as guarantees for export credits in the amount of RM 50,000,000 to be used towards of the purchase in Germany of required steelmaking equipment and supplies.



Annex B – Proposal for Development of Iron Ore Resources

Successful operation of the proposed integrated steel mill will require an adequate supply of iron ore from the mines located in the province of Minas Gerais. Of these, the Caue and Casa de Pedra deposits are the best suited both in terms of their iron content and their access to modern mining methods. To mine and deliver iron ore from these locations it is proposed to create a separate firm to acquire rights to the mines themselves and to construct a rail line linking the mines with the port of Vitória. The name Companhia de Minas do Rio Doce Sociedade Anonima (Rio Doce Mine Company Ltd.) is proposed for this entity. It is estimated that the construction of the railway can be completed within three years of the start date, which assures that ore supplies will be available to the steelworks when it is ready for operation

The costs associated with this venture include an estimated cost of RM 30,000,000 for the acquisition of the rights to the preferred ore deposits and an estimated cost of RM 40,000,000 to construct and equip a metre-gauge railway of 510 km length linking the mines with the steelworks. Provision of an additional RM 15,000,000 in working capital would bring the total capital requirements of the new firm to RM 85,000,000. It is proposed to obtain this capital thusly:.

• Mortgage bonds at 4% per annum, maturing in forty years: RM 20,000,000
• Preference shares: RM 5,000,000
• Common shares: RM 60,000,000

The proposed division of the common shares is as follows:

Reserved for Brazilian Investors: 60.00%
Friedrich Krupp AG: 15.00%
Vereinigte Stahlwerke AG: 15.00%
Mitteldeutsche Stalhwerke AG: 7.50%
Deutsche Edelstahlwerke AG: 2.50%

The non-voting preference shares would be held by the German partners, and would be entitled to twenty-five percent of all dividends declared over five percent.

The mortgage bonds would be held by the Reichsbank as guarantees for export credits in the amount of RM 40,000,000 to be used towards of the purchase in Germany of required railway equipment, locomotives, rolling stock and other supplies.

Further, the German consortium partners are willing to enter into a contract with the Companhia de Minas do Rio Doce Sociedade Anonima for the purchase of up to 500,000 tonnes (metal content) of ore from its mines annually for the next ten years over and above ore consumed by the proposed steel works. At the current average market price for iron ore (RM 16 per tonne-metal content) this represents a commitment of RM 80,000,000 over the life of the proposed purchase contract.

Abstract:

The development of a sound domestic aircraft and aero-engine industry within the Turkish Republic would be of great benefit in terms of national security and the national economy. Despite minimal human capital resources sufficient skilled labor exists to support creation of such an industry. A monthly production rate of twelve single-engine and twelve twin-engine aircraft is attainable. The projected capital cost of the project is estimated at 28 million Reichsmarks. Completion of the factory is projected within two years of the start of construction.

Section I – Background

The Turkish Air Force has outstanding requirements for modern combat aircraft in several categories – including fighter and bomber aircraft – in sufficient quantities to warrant consideration of the establishment of a domestic aeronautical industry to undertake the progressive manufacture of both airframes and aero-engines. Establishment of such a domestic source would have considerable benefit to the Turkish national treasury – in the long-term cost prices to the Turkish Air Force would be lowered and the savings in foreign exchange would be substantial. While not measured in economic terms, the security benefit of a domestic aeronautical industry cannot be overlooked. Several potential barriers to establishment of such a domestic aeronautical industry exist – the general economic underdevelopment of the nation; shortages of investment capital; shortages of trained technical workers, and the competition for such from other elements of the Turkish economy. The Turkish military establishment, while an ultimate beneficiary of a domestic aeronautical industry, is also a barrier as it too competes for scarce human capital resources.

Section II – Situation

The Turkish Government has indicated its desire to create a domestic aircraft industry and further indicated that it seeks licenses for the Heinkel He100 fighter aircraft and the Dornier Do217 bomber aircraft, the Daimler-Benz DB601 and the BMW Flugmotorenbau BMW 801 aero engines to support this proposed industrial complex. It has also indicated that the skilled labor pool available at this time numbers no more than two thousand individuals in the most relevant job categories. Given these constraints it is has proved possible to develop a set of recommendations for the creation of the desired domestic aviation firm, for which the notional name of Turkiye Tayyare Fabrikasi Anonin Sirketi (Turkish Aircraft Factory Ltd.) is proposed. To take maximal advantage of existing Turkish infrastructure, it is recommended that the new complex be built at the city of Kayseri, seat of Kayseri Province, in central Anatolia. This recommendation also is in accordance with Turkish desires that the domestic aviation industry be developed in a secure area of the republic.


Section III – Outline of the Industrial Complex

The requirements and preferences of the Turkish Government dictate that the complex be organised in two divisions, that is – and airframe division and an aero-engine division. Due to the nature of its labor-intensive requirements, the aero-engine division will be addressed first, as the availability of aero-engines will be the limiting factor for domestic aircraft production.

Under middle-case projections, it will require 2,400 man-hours to produce and test one BMW 801 aero engine for the Dornier Do217 twin engine bomber, at a cost of Reichsmarks 28,500 ($5,700 at the current exchange rate of RM = $0.20), while for the DB601 aero engine the corresponding requirements are 3,000 man-hours to produce at a cost of RM 38,500 ($7,160). These figures alone indicate the potential cost savings in foreign exchange that can be obtained through domestic manufacture. The limitations in availability of skilled labor forces conservation in the assignment of human capital resources to aero engine manufacture, and it is recommended that the aero-engine division of the Turkiye Tayyare Fabrikasi be limited to the production of twenty-four engines of the DB601 type and forty-eight engines of the BMW801 type per month for the near term.

Given the availability of domestic aero engines cited above, it is therefore desirable to limit the aircraft production facilities to the manufacture of twelve complete airframes (or spare parts equivalent) of the Heinkel He100 type and a further twelve complete airframes (or spare parts equivalent) of the Dornier Do217) type per month for the near term. This is considered the best fit between the competing demands for skilled labor of the aero engine and airframe divisions, as well as making adequate provision for the creation of respective repair and overhaul sections within both divisions.



The salaried technical category includes individuals engaged in such functions as management, supervision, scheduling, inspection and quality control. The serial production category includes all skilled machinists, assembly and test personnel engaged in the actual manufacture of aero engines, and is the limiting factor in the near term. A provision for personnel of for a separate repair division is indicated due to the specialised nature of aero-engine overhaul and maintenance. The category of other includes personnel engaged in maintenance of the aero-engine facility itself, warehousing and materials handling and a substantial apprentice training programme (see below).

The corresponding estimates for the airframe division of the proposed Turkiye Tayyare Fabrikasi are cited below.



It is to be noted that provision has been made for the establishment of apprentice training programmes in both the aero-engine and airframe divisions. This is a long-term approach to the continued maintenance of the health of the domestic aircraft industry its long-term growth. As the Turkish Republic modernises, the demands on its human capital resources will increase, leading to increased competition for scarce trained labor resources. While the Turkish Government can control this in the short-term it is not a long-term solution to the issue. While the capital costs of establishing such an apprentice training program may seem high, for the long-term health of the industry it is an eminently worthy investment.

The potential German partners identified by the Turkish Government, Dornier-werke GmbH, Heinkelwerke GmbH, Daimler-Benz AG and BMW Flugmotorenbau GmbH have been approached and have indicated their ability and willingness to provide a cadre of technical specialists and engineers to assist in the establishment of the proposed Turkiye Tayyare Fabrikasi. The details of the arrangement of terms between the Turkish Government and its desired German partners fall outside the scope of this report.



Assuming a middle-case scenario, construction of the required factory buildings could begin within four months of conclusion of all contract arrangements. The first phase of construction, sufficient to allow limited production of airframes utilizing imported aero engines, could be completed within nine months of the start of construction. Completion of the airframe division can be accomplished within twelve months of the start of construction, but the likely availability of machine tools will delay domestic production of aero-engines at least fifteen months from the start of construction; however, after that lead time, erection of the appropriate workshops should proceed with minimal delay and the first domestic engines should be produced within twenty-one months of the start of construction, with the full capacity being reached within two years from the start date.

Abstract: The development of a sound motor vehicle industry within the Turkish Republic would be of great benefit in terms of national security and the national economy. The under-development of the Turkish industrial base requires a phased approach to the development of a domestic motor vehicle industry. The first phase of development – local assembly of imported vehicles in kit form – requires minimal capital investment and can be achieved within six months of a decision.


Section I – Background

Turkish society, the Turkish armed forces in particular, have pressing requirements for modern motor vehicles, which, to date, are met completely by imports. This results in significant expenditure of scarce foreign exchange and represents a bottleneck in modernisation of Turkish society and its armed forces. The creation of a domestic motor vehicle industry would represent savings on the import of foreign motor vehicles, promote job growth in the industrial sector of the Turkish economy, speed development of the Turkish civil economy and increase the security of the nation by the motorisation of the Turkish armed forces. However, the linkages required to support a comprehensive motor vehicle industry do not yet exist in Turkey. Therefore the development of a domestic motor vehicle industry must proceed in a phased manner.


Section II – Situation

The manufacture of motor vehicles, whether motor cars, motor trucks or omnibuses, is a complex industrial undertaking, requiring the coordination of a number of industrial activities beyond the final manufacture of vehicles themselves. Components such as engines, transmissions and gearboxes, motor tyres, batteries and electrics, and body shells require their own factories or extensive plant facilities within a large industrial complex. While motor vehicle assembly itself requires a minimum of skilled labor and invested capital, the creation of the supporting industries require many skilled engineers and industrial technicians – which at this point in time are at a premium in Turkish industry due to other industrial development projects already in hand.


Section III – Phased Development

It is recommended that a phased approach to creation of a motor vehicle industry be adopted. These phases would be:

Phase I – Assembly of Complete-Knock-Down (CKD) motor vehicles imported from abroad
Phase II – Creation of domestic coach building facilities to produce bodywork tailored to local requirements
Phase III – Progressive substitution of domestic components for imported components as they become available
Phase IV – Full domestic manufacture of complete vehicles

The capital and labor requirements for Phase I activities are relatively small, though considerable expenditure is still required for the import of CKD motor vehicle kits. The savings achieved through assembly of such CKD kits are drawn primarily by the substitution of domestic labor for final assembly and by reduced shipping costs from the original manufacturing plant. Local assembly has the benefit of serving as a training ground for domestic labor resources.

Similarly, Phase II developments do not require heavy investments of capital, and require a minimum of supporting heavy industry; that is, unless a full pressed-steel body factory is desired, in which case the requirements for skilled labor and capital investment are significantly increased. Phase III developments must be tailored to the industrial environment and the ability of the Turkish economy to modernise. Depending upon demand, there may be situations in which it is more economically sound to continue to import specific components rather than make the investment to produce them domestically.

Phase IV is, of course, the mature result of development over a considerable period.

Section IV – Recommendations for Phase I

Plans exist for a standard automobile assembly facility requiring little site preparation and minimal investment of capital. The equipment for such a facility costs RM 1,400,000 ($280,000 at current exchange rates) and the facility can be erected in existing industrial buildings if available, though, of course, dedicated facilities are beneficial to expansions and further development. It is estimated that such a standard assembly facility – employing twenty managerial and supervisory personnel, fifty skilled and one hundred semi-skilled technicians, and 300 unskilled laborers – is capable of assembling up to twenty-five units per day at a cost of RM 110 per unit assembled. In a standard work month of twenty-six days such a plant would thus be capable of assembling up to 650 CKD vehicles per month if operated with a single work shift. Production capacity would, of course, be dependent upon the availability of CKD vehicle kits.

Such a firm, under the notional name of Turk Otomobil Fabrikasi Anonim Sirketi (Turkish Automobile Factory Ltd.), would require no more than RM 4,000,000 in start-up capital, inclusive of acquisition of minimal factory buildings, acquisition of standard assembly facility equipment and working capital to jump start production. As compared to the requirements for the proposed domestic aviation industrial complex (see Industrial Analysis Research Paper Nr.201) these capital requirements are within the reach of the Turkish entrepreneurial class and may not require investment by the State.

Baring delays in obtaining a working site and recruiting local labor, such a Phase I assembly facility would be in production within six months from the time the assembly equipment was ordered.


Section V – Recommendations for Phase II

Capital and labor requirements for Phase II activities cannot be predicted with certainty, as they are tied to the specific types of coach building activities required by the local market. However, based upon the presumption that the primary demand will be for motor trucks for the Turkish armed forces, general service load-carrying bodies, or troop-carrying bodies, can be readily constructed with available labor resources for minimal costs. For example, the standard load-carrying body for the Mercedes Benz Typ LGF medium all-wheel drive truck could be constructed in Turkey, from using local resources and labor, at a cost estimated to be RM 140 ($28), vice the cost of RM 225 ($45) for the imported component. Such savings would vary based upon local inputs and the complexity of the coach-work to be built.


Section VI – Recommendations for Phase III

Creation of domestic industries for production of motor vehicle components requires long-term planning and considerable investment of capital and the creation of a larger pool of human capital than is presently available in Turkey. However, it is recommended that one of the first elements be creation of facilities capable of maintaining and reconditioning the engines of motor vehicles, including the casting and machining of replacement components. Plans exist for a standard reconditioning plant capable of overhauling up to twenty-five engines per day, the equipment for which costs RM 2,000,000, and requires twenty managerial and supervisory personnel, sixty skilled and 120 semi-skilled technicians and one hundred unskilled laborers. The equipment for such a facility is available within six months of order.