' a supplement to International Netherlands 1963 TRADE MISSION REPORT/ A U.S. DEPARTMENT OF COMMERCE PUBLICATION Final Report 1963 Trade Mission To The Netherlands U.S. DEPARTMENT OF COMMERCE Luther H. Hodges, Secretary BUREAU OF INTERNATIONAL COMMERCE Eugene M. Braderman, Director For sale by the U.S. Department of Commerce, Washington 25, D.C. Price 25 cents. Members of Netherlands Trade Mission: ROBERT D. SHARPE, Mission Director Deputy Director, Trade Missions Division, Office of International Trade Promotion, Bureau of International Commerce. Sam G. Adler, Jr. Executive Vice President Adler's Department Store Savannah, Ga. Jack Gomperts, President Calagrex, Inc. San Francisco, Calif. Mrs. Mildred Andrews Executive Secretary American Textile Machinery Assoc. Vienna, Virginia Louis E. Nordholdt Vice President Temco, Inc. Nashville, Tenn. Mt- Edgar W. Barnwell President-Owner Apex Corporation Roseville, Mich. Walter D. Voelker Consulting Engineer Philadelphia Penna. FREDERIK G. KESSENER, Trade Development Officer Program Officer, Trade Mission Division, Office of International Trade Promotion, Bureau of International Commerce. * ■ f. rjp !£ Above — Mrs. Mildred Andrews examines Dutch man-made fabrics Trade Gain possible Netherlands, old U.S. trading partner, provides market for producer, consumer goods The Netherlands is one of America's oldest trading partners, but this long- standing association should not be taken for granted. Recent trade between the two countries seems to have settled at a high plateau, with U.S. exports other than agricultural products increasing less than 1% in 1962 and exports from the Netherlands showing no appreciable in- crease during the same period. The U.S. Trade and Industrial Equip- ment Mission to the Netherlands, the first of its kind to visit that country, in April took 650 business proposals from American firms as tangible proof to the Dutch community that U.S. business was not taking our traditional trading partner- ship lightly. In the many business and official con- tacts by the Mission during their 4-week stay in the Netherlands, several overall conclusions, aside from those concerned with individual proposals from Dutch firms, were reached: O The market for the sale of U.S. consumer as well as producer goods can be increased; however, the right repre- sentation is important in order to de- velop potentials fruitfully. U.S. industries seeking distributors will find that their acceptance of reason- able financing of goods shipped will prove secure and successful. Dutch industry is presently expe- riencing a shortage of labor. Increased use of automation processes in' offices and factories as well as in transportation was evident. Such industry must con- tinue to make more effective use of exist- ing labor sources by increased purchases of automated machinery and equipment — and therein lies a definite potential for 'he sale of U.S. goods. Industrial center The Netherlands continues in its tradi- tional role as a trading and transporta- tion nation and in maintaining its in- tensive agricultural economy. Modern Holland, however, is rapidly developing into an industrial center. Old established industries such as Fokker, Phillips' Stork, and Unilever are rapidly diversifying and expanding, while new industries covering a wide range of products are developing with banks eager to support new en- deavors. Today nearly 45% of Hollands gross national product is derived from its industry. This rapid growth of industry along with its political stability and excellent Government-business relations continues to increase the overall potential of U.S. sales, especially in quality goods. Members of the U.S. Mission were: Robert D. Sharpe, Mission Director and Deputy Director, Trade Missions Pro- gram, Bureau of International Commerce. Department of Commerce: Mildred An- drews, executive secretary. American Textile Machinery Association: E. W. Barnwell, president. Apex Corp.: Jack Gomperts, president, Calgrex. Inc.: Louis E. Nordholt, vice-president and technical director, Temco, Inc.: Sam G. Adler, Jr.. executive vice-president, Adler's Depart- ment Store: Walter D. Voelker. consult- ing engineer and Frederick G. Kessener, Mission Trade Development Officer and Program Officer, Trade Missions Pro- gram. BIC. E. W. Barnwell, second from right, at Hispano Suiza plant , U.S. toys in Rotterdam store attract Mission member Sam G. Adler, Jr. Below — Dutch businessmen being interviewed at Trade Information Center Netherlands gas industry on verge of vast expansion Ill-equipped housewife could be insatiable market for U.S. goods; potential is bright, but penetrating market won't be a cakewalk; industries as well as home appliances may be revolutionized LOUIS E. NOROHOLT By LOUIS E. NORDHOLT Vice-President for Engineering, Temco Corp. The Netherlands, indeed the entire European Economic Community (Com- mon Market), is on the brink of a dy- namic expansion in the gas industry. Recent discoveries of large natural gas reserves in Northern Holland's Gro- ningen Province are sparking a new surge of enthusiasm in the Netherlands com- mercial and indus- trial community. This nation, which has traditionally been deficient in na- tural resources, has suddenly become the possessor of a valuable and timely source of energy that could well revolutionize the average European's concept of com- fort heating and kitchen conveniences. American manufacturers of equip- ment and supplies for the gas industry would be well advised to take a good look at the market created by this poten- tial industrial revolution. Since being forewarned is to be forearmed, it should be pointed out that penetrating this mar- ket is not a part time job to be accom- plished by correspondence or simply ap- pointing an export or import agency. Potential roadblocks In the first place, approval require- ments of the various European coun- tries do not necessarily coincide with the requirements of American agencies, nor do they always coincide with each other. Local approval would be necessary for any sizeable acceptance. Secondly, there are numerous well- founded, well-managed and well-equip- ped appliance manufacturers in the Neth- erlands and other European countries who are well aware of the gas market's potentials. They all have their engineers and designers hard at work getting ready for the anticipated switch to natural gas. Several already have universal approval. Natural gas has been in use for quite a few years in certain limited localities and it is here that some experience has been acquired. Thirdly, quite a bit of consumer edu- cation must be done before American designs will be universally accepted. The European is conservative in his taste and is not inclined to accept innovations. His traditions are deep-rooted. He is willing to change only when convinced that the change is an improvement. There are 2 American heater manu- facturers already active in the Nether- lands, one with an assembly plant and the other as licensor to a Dutch firm. Although both of these firms are now producing oil heaters they could convert to gas very quickly. The brighter side Now, to the rugged individualists who have not become discouraged up to this point, it must be stated that a little effort and ingenuity could pay off handsomely if properly directed. The European Economic Community has a total population of 175 million of which 75 million are gainfully employed (versus 68 million in the U.S.). The Netherlands has a labor force in excess of 4 million. Since World War II hourly wages have increased dramatically, creat- ing a new standard of living for millions of workers. This increase should con- tinue for some time because there is a the author Mr. Nordhoh has specialized in the gas appliances field for 30 years, and has extensive experience with the industrial applications of gas. The Ohio State graduate designed and produced a complete line of glass-lined water heater tanks for Precision Engineering, Inc. This is the second time he has served on a U.S. Trade Mission. continuing labor shortage throughout Western Europe. This labor shortage may well make it impossible for local manufacturers to increase their production to keep pace with the increase in demand, thus leav- ing a gap to be filled from the outside. There is also a housing shortage in the Netherlands. This shortage must and will be corrected. American manufac- turers could spend some valuable time with local architects and builders, selling the advantages and features of American equipment. An all-gas home open to the public might start a revolution among the womenfolk and what better stimulus could any industry have? The average European kitchen for ex- ample, would not be acceptable to an American housewife. For centuries peo- ple of even modest means have had servants to work in the kitchen. This is no longer true. Domestic help simply does not exist any more. Now the house- wife has taken over, but has still to learn that her kitchen is completely out of date and inadequate. Get these house- wives stirred up and you have created an insatiable market. Now is the time As always in a development such as this, the question of timing arises, be- cause bad timing could result in a com- plete loss of effort. The Mission feels that the time is "right now." Even though the Groningen fields will not be fully connected to the present distribution sy«- tems for another year or two there is much preliminary work to be done in market analysis, laboratory approval, making the proper connections with Dutch firms or agents, and the million and one other things that must be done before the first sale is made. By the time this report goes to press new standard gas rates will have been established and it is the concensus that they will be competitive with oil and coal. Since 75% of the Netherlands population lives in municipalities that are already connected to gas supply systems, the gas appliance business is expected to start picking up as soon as the new rates are published. Even though gas is now available, the old rates are too high to permit extended use for home heating. Coal and oil are being used for this purpose, mostly through the use of room heaters with capacities from 30.000 BTU to 60.000 BTU. These room heaters look very much like American radiant vented gas heat- ers. Grey iron castings are used exten- sively in the construction of these heat- ers. Since the Netherlander likes to see the fire, in the beginning he will probably prefer radiant type heaters with fire proof glass doors or windows. Central heating rare Central heating is not unknown but is confined almost entirely to hot water sys- tems. Forced air systems could possibly be sold for new construction, but again it would require intensive selling similar to the progress in Great Britain, where this program is now beginning to show results by an increasing demand for cen- tral heat in all new construction. The natural gas discovery's impact on industry might well be even more spec- tacular than the impact on home appli- ances. Industries requiring large quan- tities of heat energy may consider establishing operations in the northern provinces of the Netherlands. The Dutch Government grants subsidies to selected new industrial establishments in certain parts of those provinces. Know the ropes Dutch businessmen have traditions in foreign commerce that are older than the U.S. Holland's very existence has depended on foreign trade, especially in making finished products from imported raw materials. He is therefore well versed in modern manufacturing and marketing methods. If inexperienced in the field of inter- national commerce, companies should send representatives to visit the nearest Department of Commerce Field Office to tap the vast reserve of information available of this subject. The Department can supply information on any country in which you may be interested, and in most cases can furnish data on the spe- cific foreign firm or agency you may be negotiating with. The Commerce Depart- ment can also acquaint U.S. businessmen with the various means for protecting foreign investment. The U.S. also has an active Embassy in The Hague, as well as Consulates in Amsterdam and Rotterdam. These agen- cies are anxious to help American busi- nessmen establish contacts and their knowledge of the local situation can be of inestimable value. They are your rep- resentatives. Use them! This Mission Member would like to suggest that U.S. firms negotiate directly with their Dutch counterparts. You are selling a product involving experience and knowhow, and not a standard com- modity like wheat or coal that could be handled by any commission or export agent. WAITING FOR HOUSEWIVES: Typical European gas and electric water heaters line the walls, while other modern household appliances await inspection by Netherlands housewives at an exhibit in Groningen. Discovery of the Groningen natural gas field has opened new vistas to the energy-hungry Netherlands. Dutch will import more food as farm share of GNP drops Hollanders want wider vari- ety, sophistication in diet By JACK GOMPERTS President, Ca/agrex, Inc. The picture of the Netherlands as a small country populated by quaintly dressed farmers in wooden shoes, tilling 1| below-sea-level soil, admittedly is out of date; but how much that picture has changed may not be i|fe generally known. ^g I Agriculture ac- dfl It jR counts for less than 10 J| 11% of the Dutch MmM gross national prod- jack gomperts uc t whereas mining and industry contributes 43% . The share of agriculture is likely to decline further as industrial expansion attracts more la- bor and encroaches upon the available land.. Dairying remains the giant of Dutch agriculture, producing 324,000 metric tons of condensed milk and 115,- 000 metric tons of dry milk. Between 55 and 60% of the world's condensed milk trade originates in Netherlands. More food imports seen These figures are impressive but they do not go far toward feeding the popula- tion; Hollanders eat well, and want vari- ety in their diet. They will continue to import larger quantities of food. With a higher standard of living than ever before, the Dutch housewife looks for more sophisticated and if necessary more expensive items, although she is still very price-conscious. U.S. canned fruits, vegetables, and salmon speciality foods, attractively packaged, will be of increasing interest to the Dutch market. For the future, there is no doubt about the increase in frozen food consumption. Both up-to- date store freezer cabinets and home freezer boxes are potential U.S. export items. Because Dutch kitchens are gen- erally small, the popular freezer box size is apt to be about 3 cubic feet. There is probably not much future in the Netherlands for U.S. frozen chickens. Dutch chicken production is increasing (66,000 metric tons in 1962) and Hol- land will be an exporter rather than an importer. The turkey industry, however, by a special effort and advertising cam- paign might well make the Dutch house- wile more turkey conscious. Retail food distribution in the Nether- lands is still in a state of flux. Many modern supermarkets have been limit during the past 5 years but they must be close to the heavy population cen- ters, because shopping by automobile is not yet general. Altogether, there are about 23,000 food outlets, including some 3,000 self-service stores, of which 300 arc supermarkets. The remaining 20,000 arc independent retail grocery stores. In addition, about 80 depart- ment stores have substantial food de- partments. About 90% of the independent re- tailers have joined in a voluntary associa- tion with wholesalers. The wholesalers in turn belong to 1 3 different wholesalers' organizations, each having from 10 to 35 members. Some 250 wholesalers service about 20,000 retailers. The average an- nual turnover of these independent gro- cers is only about $17,000 — no wonder their number has dropped from 30,000 in 1945 to 20,000 today and is expected to diminish as more chain supermarkets are built and shopping by car increases. A strong, U.S. -type shopping bag is another item that food stores, especially the chains, could use to excellent ad- vantage. Machinery market Food packaging machinery will find an increasing market in the Netherlands, not only because of the tight labor supply but also the increasing outlet for Dutch industry in the Common Market. Special mention should be made of the possibil- ity ultimately to change part of the pack- aging of fluid milk and milk products from glass to cartons. Almost the entire output is now bottled. the author Mr. Gomperts has 44 years' ex- perience in food processing and packaging. In addition to serving as President of Calagrex, Inc., an export firm specializing in frozen and dehydrated food products, he is also head of the Pacific Coast purchasing office for all the Scan- dinavian Cooperatives (Nordisk Andelsforhund California, Inc.). Mr. Gomperts is on the board of Directors of the California Dried Fruit Export Association, the Neth- erlands Chamber of Commerce. Dutch retailers receptive to U.S. consumer goods— if right approach is made Unlimited horizons seen for enterprising U.S. exporters as Netherlands wages climb and full employment prevails By SAM G. ADLER, Jr. Executive Vice-President Adler's Department Store American consumer goods of one type or another are wanted for re-sale by the vast majority of Dutch retail establish- ments. Various cat- egories of goods are already in demand, while others have not been sufficiently pushed to commence ^ ^ tapping the demand i^V^H to waiting to be ^L ™ | crated by some good I merchandising and SAM G. ADLER, Jr. ^^ ^ ^^ With the increase in Dutch wages and practically full employment, the demand for more consumer and luxury consumer goods has unlimited horizons in the Neth- erlands. In 1959 the country had 437,000 washing machines; by 1962 there were 1,740,000 washing machines in use. Re- frigerator sales were only 63,500 in 1959, rocketing to 245,000 in 1962. The num- ber of registered users of television soared from 391,000 in 1959 to 1,275,- 000 in 1962. With Netherlands wages increasing at an average rate of 5% per annum and household rents remaining relatively constant, the future demand for consumer goods of all types will far out- strip past demand. Favorable factors Ideal conditions exist for increasing sales of U.S. consumer goods to the Neth- erlands. The two countries are fast friends, and the Dutch business com- munity and the Dutch consumer both are interested in American products. Competition is "tough" but not as severe as in our home markets. In the United States we are generally faced in our own fields with aggressive competi- tion, comparable in quality, styling. prices, packaging. In the Netherlands consumer-goods competition is not as severe. American manufacturers in many cases can beat the price of competitors in the Dutch market through U.S. tech- nological know-how in production. Full head of steam Where price cannot be beaten. Amer- ican styling, fabric design, coloring, pack- aging, and quality give the U.S. manu- facturer the edge, if — and only if — he will enter into an aggressive and hard- hitting sales campaign. Such a campaign does not have to be costly but should work towards expanded sales on many fronts: by personal con- tact; by finding a reputable, capable and hard-hitting importer or agent in the Netherlands; by a licensing agreement with a capable Dutch manufacturer — and there are many; or by entering into a joint venture with a stable, reliable, aggressive Dutch concern. The biggest share of the Dutch con- sumer-goods market is likely to go to the manufacturer who gets there first. gives good reliable service, and supports his product with the best merchandising advantages. In demand At the moment the greatest interest in American consumer goods is centered on toys, electrical appliances, ladies' and childrens' dresses, coats, suits and sports- wear. There is currently a wide price gap between foreign brands of major and small household appliances and American famous brands of these items. Nowhere, however, did the writer see non-branded American electrical house- hold appliances being sold in the Neth- erlands. These can be sold at prices com- parable to those of Dutch manufacture or at the same prices as imports from countries other than the U.S. Such non- branded American appliances would win Visits 14 cities The U.S. Trade and Machinery Equipment Mission to the Nether- lands visited 14 cities during its stay, April 20 through May 17. A total of 503 individual inter- views were held with Dutch busi- nessmen and 36 plants were visited. The Mission made 1,050 Business Proposal referrals and developed 279 export opportunities for U.S. firms. Ninety-one Dutch firms were in- terested in exporting to the United States and 43 were seeking joint venture partners. Of those inter- viewed, 116 were interested in licensing agreements with U.S. firms. hands-down due to advanced refinements, styling, coloring, and quality. They could offer the Dutch consumer a better prod- uct at prices he can afford. U.S. toys are well stocked in most stores which carry this type of mer- chandise. Most in demand are space toys such as kits for rockets, satellites, planes and ships, as well as electronic and educational toys for all ages. Ladies' and childrens' wear present the largest challenge in consumer goods. There are large varieties in major Dutch stores of such staple U.S. soft goods as brassieres and foundations, and there is a start in lingerie and some piece goods. High stakes When it comes to ladies' and childrens' ready-to-wear, the battle is on. In these fields of merchandising, manufacturers must do an educational selling job not only with the Dutch retailer, but also with the Dutch housewife. In most cases, she is not yet prepared to accept rapid changes in styles, colors, and fabrics. When the promotional job is done, these soft lines of U.S. goods will find a good market. The opportunities are there for those who have vision. the author With a lifetime of experience in retail department-store, chain-store and mail-order merchandising, Mr. Adler has served as a management official of major New York, Chi- cago, and Savannah establishments, handling durable and nondurable goods. Netherlands offers opportunities for U.S. machinery and processes Need for more automation seen as expanding markets, con- tinued labor shortages require increased productivity EDGAR W. BARNWELL By EDGAR W. BARNWELL President, Apex Corp. The Netherlands offers opportunities in all phases of manufacturing for U.S. know-how, products, equipment, and processes. There is ^g/^^ an ever expanding 01 W^\ need and preference \ by the import and sales organizations for U.S. goods and equipment. Holland, with its ports, rail- ways, and canal and trucking facilities can and does supply all of Europe. What better place for the U.S. businessman to consider as the cen- ter of his manufacturing or sales and service effort? The country in the past few years has experienced a tremendous industrial up- surge. The business community is bur- dened by a severe labor shortage while trying to cope with an ever expanding market. With few exceptions, the hard- goods manufacturing community con- sists of small- to medium-size plants, built and equipped when low-cost labor was plentiful. This picture has changed drastically in recent years. With new concepts brought about by the European Common Market and expanding opportunities for world trade, the manufacturer is faced with the responsibility of increasing pro- duction through the media of automa- tion. Automation coming Four Netherlands plants were visited by the writer during the stay of the U.S. Trade Mission. Only one — the DAF automobile plant, Holland's major pro- ducer of cars and trucks — had truly au- tomatic or inline transfer equipment as we know it. Even in this beautifully equipped and well managed plant they have not yet found their production quantities high enough to warrant fully automating. Their expectations are that the time is nearing when a combination of labor shortage, costs, and production requirements will necessitate a more fully automatic facility. The manufacturing community in gen- eral is made up predominantly of plants which produce a variety of more or less allied products in low quantity. Larger markets will bring about specialization, increased production requirements, and standards of quality, all of which lead to automatic methods. Interim process This overall change may be expected to take place gradually over a period of years, but there are interim processes for the U.S. machine tool industry to con- sider: numerical controlled machines and electrochemical and electrical discharge machining. The Mission found little evi- dence of the use of these processes in Holland, in the midst of an urgent need for just this type of equipment which for relatively low investment would re- lieve many problems of the small- and medium-size manufacturers. By and large, the businessmen who came to interview the Mission indicated an awareness of the situation plus the willingness to take corrective steps. Those not financially able to expand their plants and product lines were in most instances agreeable to licensing and/ or joint ven- ture agreements. The only area where unused plant ca- pacity exists in Holland today is in the large shipbuilding or marine industry. Representatives and owners alike from the largest shipbuilders who came in for interviews were concerned mainly with securing licenses to manufacture ma- chinery and/ or equipment which can be produced by their large facilities. In many instances, where a complementary line of equipment could be found a joint venture would be considered. U.S. prices not competitive A surprising lack of U.S. -built machin- ery and equipment is evident, and at the same time an avowed preference for it because of quality and delivery; but U.S. prices are out of line with those of European manufacturers. Additionally, service availability presents a problem. Therefore it is imperative that the ma- chine tool manufacturer who seriously expects to penetrate the European mar- ket establish either manufacturing, as- 8 sembly, or sales and service facilities abroad. Living standards, wages, and prices for the next 10 years may be expected to advance at a faster rate than our own and help to close the price gap; how- ever, if the U.S. machine tool manufac- turer is to receive his share of the Eu- ropean market before it is too firmly established with other suppliers, he must recognize the opportunity and act now. The U.S. business community cannot af- ford to wait for economic and political corrective measures. the author Mr. Barnwell's firm designs and builds special machinery, tools, fixtures and gages. Mr. Barnwell has a knowledge of a wide range of special and multi-purpose ma- chine tools, including automated processes, based on 28 years of practical and theoretical experience in the machine tool industry. Be- fore establishing the Apex Corpora- tion in 1945, he served in various capacities in the machine tool in- dustry in the Detroit area. Embassy planning U.S. trade show in Togo capital Proposed dates are Nov. 6-10, with local merchants invited Local businessmen in Togo have shown great interest in a trade exhibit of U.S. goods planned for next fall, the U.S. Embassy in Lome reports. The exhibit — tentatively scheduled for Nov. 6-10. 1963, in the auditorium of the United States Information Service — would fea- ture American products loaned by local firms for display as well as samples and brochures from U.S. firms interested in exporting to Togo. Vital to success of the exhibit would be the availability of Lome cost, instirance, and freight prices for the commodities. These prices would not be displayed on the articles or with promotional materials unless desired, but would be furnished to interested businessmen on a restricted basis by the Embassy officer in charge of the exhibit. Intereted U.S. firms should write to the Embassy in Lome. Netherlands textile industry modernization, expansion open market to machine builders Hard sell needed to overcome traditional barriers, Com- mon Market tariff preferences; production at lowest cost per unit is prime factor for mill operators MILDRED ANDREWS By MILDRED ANDREWS Executive Secretary, American Textile Machinery Association The textile industry in The Nether- lands offers some opportunities for U.S.- built textile machinery, provided the hard sell is used to over- come certain barriers built in by tradition and re-enforced by the tariff preferences of the Common Market. The textile indus- try is the fourth in size in this small country, exceeded only by the melalworking, food-drink- tobacco, and chemical industries. There are 160 establishments in the cotton, rayon, and linen group, largely in the Twenthe area. The woolen industry is centered in or near Tilburg with 125 establishments. The knitwear industry has 195 plants; carpet (and bast fiber) weaving has 60 establishments; narrow fabric and lace mills number 40; and there are about 90 miscellaneous plants also in textile manufacture. Most plants are relatively small, em- ployment for the entire industry totaling 121,400. The Dutch textile industry imports almost all raw materials, and exports 35% of its total production. The mills are usually established firms, more than a hundred years old, family owned and family managed. Imports increase Since 1961. the flow of imports from other countries, largely the Common Market, has increased. This, in addi- tion to loss of the Indonesian export trade, is reflected in a highly competi- tive Dutch market where textiles pro- duced in the Netherlands became some- what less attractive when the guilder was revalued in March 1961. These developments are having a sig- nificant effect on investment planning for capital equipment. A pattern is already set for mill mergers that provide either vertical and/or horizontal integration. Building investment in a modern, per- fectly lighted, air conditioned, acousti- cally balanced, one floor modern weaving mill is about 400 guilders (approximately $110) per square meter floor space. Add to this investment the price of about 35,000 guilders ($10,500) per loom. Textile mill mergers have afforded eco- nomic relief to the participating Dutch mills, have brought into focus a pooling of technical knowledge, and have made possible modernization in its highest sense. Dutch textile mills are experiencing increasing labor costs. The average wage is 145 guilders (about $40) per 45-hour week, with each weaver tending 18 to 32 looms, depending on construction, and each fixer tending 50 looms. Three shift operation is throughout the indus- try. Labor shortages have resulted in im- portation of workers from Italy. Spain and Germany. Employment has in- creased in the Dutch textile industry by more than 209£ since 1948. These factors show clearly that the most efficient machinery that can pro- duce at the lowest cost per unit is the prime requisite for profitable longevity in the Netherlands textile industry. Success- ful mill operators today are convinced that it is a vital answer to their prob- lems. Investment in the past 10 years by textile mills has been substantial. Since 1952 more than 500 million guilders (about $100 million) has been spent by cotton spinning and weaving mills. This is modernization and expansion because war damage repairs (new equipment bought under the Marshall Plan) had been completed by that year. The trend accelerates. In 1960. 22? million guilders was spent. In 1961, the last year for which figures are available, spending was up 20% over the previous year. Official figures from the cotton, rayon, linen group indicate that spinning and weaving equipment investment that year averaged about $400 per worker, compared with about $250 per employee in the U.S. textile industry in 1962, a figure higher than that of 1961. There are in place today 1,045,000 spindles in this group, and a total of 32,378 looms. Of the latter, only 13,800 are automatic; an additional 4,000 have automatic attachments. Actually, auto- matic looms are divided as follows: sin- gle shuttle, 70%; box looms, 10% ; other 20% . It is understood that shortly some 1 2,000 nonautomatic looms will be re- placed by 3,000 to 4,000 automatic looms run on a three-shift basis. In the woolen division of the indus- try there are 230,600 spindles and 6,670 looms broken down as follows: 640 auto- matic looms; 4,500 nonautomatic looms for woolens and worsteds; 590 blanket looms; 240 plush looms; 700 other. Re- cently several woolen-worsted mills in the Tilburg area have bought (6 each) Bel- gium-made shuttleless looms designed for worsted weaving; and, at least 20 newly designed Belgium automatic wide carpet looms have been installed. Write-off for depreciation The economic necessity for moderni- zation has been defined, and the trend toward machine replacement established. To help this trend along the tax allow- ances on depreciation are generous. For capital equipment the write-off may be based on the economic life and need not be based on the technical life of the asset. The depreciation may begin when the contract of sale is concluded. One-third of the purchase price or manu- facturing expenses of equipment may be the author In her present position for 11 years, Mrs. Andrews serves as li- aison between the machinery in- dustry and the textile industry and the Government and its agencies; handles all public relations for the association; and travels to textile areas here and abroad. She is also Manager of the American Textile Machinery Exhibition International to be held in 1965. Previously, Mrs. Andrews was market anaylst on textile commodities for Fieldcrest Mills and The Irving Trust Com- pany of New York. MODERN TEXTILE FACTORY: Mission member visits mill in operation in the Netherlands. Some 12,000 looms in the cotton, rayon, linen group are expected to be replaced shortly by automatic looms. written off at an accelerated rate. The method of writing off a fixed percentage of the purchase price has been widely adopted, the annual depreciation is in principle 8Vi% per year, and it may be fully applied in the year in which the contract of sale is concluded. In a year in which debts or manufacturing ex- penses have been incurred in excess of 3,000 guilders (about $900) for acquir- ing new or improvement of old equip- ment, an amount of 5% of the expense may be deducted from profit for that first year and the succeeding year. There- fore, capital equipment for textile . mills may be fully depreciated within about 5 years. U.S. builders at disadvantage Although this generally favorable climate exists in the Netherlands textile industry, the U.S. machine builders are at a disadvantage compared to European builders serving this market. Traditionally, Dutch textile mills have purchased, in addition to some equip- ment produced in this country, machin- ery from England, Germany, Switzer- land, France, and Belgium. Spare parts and maintenance equipment were obtain- able on relatively short notice. In the years since World War II the tradition has not changed in any way favorable to the United States because of the geographic nearness of European build- ers and lower prices at which similar types of machinery are offered (includ- ing the difference in shipping costs and duties). Predominant buying is with EEC countries. (England apparently is rapidly losing its one-time foothold in this market.) U.S. builders of opening, picking, card- ing equipment find the advantage heavily in favor of Europeans, although it ap- pears that Dutch mills are less inclined to modernize in this area than in others. Interest in U.S. processes A great deal of interest is found, however, in the U.S. built duo-card sys- tem and the future of the air-card. Throughout the industry there is a good representation of new U.S. built highly efficient machines in the preparatory, spinning, weaving, winding and finishing processes. Some of the newest U.S. machine de- velopments such as loom winder attach- ments rapidly are gaining in favor. In the wool division of the industry there is indication of some changeover from conventional systems to the U.S. built cotton-type system for worsteds. Unless some intensive effort is put forth by U.S. machinery builders, however, the tradi- tional Dutch buying pattern will con- tinue. This may involve a complete re- evaluation of sales effort which applied to the Dutch market could be applied also in other Common Market countries. U.S. textile machine builders might consider such a joint sales effort as is practiced in Germany where textile ma- 10 chine builders have joined forces in two large groups for intensified sales promo- tion of capital equipment for textile mills. This unified effort has shown great results throughout the Common Market countries and third countries as well. Gaps to be filled The opportunity and business climate is favorable. There are bridges to be crossed, however, and gaps to be filled by U.S. machine builders if they are to gain their proper place in the Dutch tex- tile market, for example: O Some of the leading U.S. builders have excellent sales agents in the area. A joint market study of far greater scope than has been undertaken should be made by them more clearly to understand just where machine-price influences moderni- zation planning instead of machine ef- ficiency and lower per unit cost — where habit prevails instead of judgment in ef- ficiency of machine production. © Financing is not the problem in the Netherlands as in some other coun- tries; but Americans dealing with long established reputable Dutch firms could try to establish working arrangements in sales contracts and credit terms such as are offered by European machine build- ers. European builders, it is understood, accept token payments on machine or- ders when the contract is closed, and a total of 10% to be paid in the first year, the balance over 2 or 3 years, the maxi- mum 5 years — compared with the U.S. custom of straight letter of credit. Large Dutch textile firms, however, do not ask for nor require credit other than through their own banking estab- lishments. U.S. builders should be aware also that agents in the Netherlands will pur- chase textile equipment outright and re- finance for sale there and to other areas. © Dutch capital is being used to build and equip mills in Africa. The custom seems to be to install new equipment in the Netherlands and ship the old to the newly independent countries where it is entirely suitable for the less skilled labor. At least eight extensive operations are owned by Dutch capital, in an equal number of geographic locations. In some instances also Dutch textile capital is working with companies long established in Africa to set up other mills. By this move, Dutch textile mills are expanding their own production where there are la- bor shortages and an excellent local tex- tile market. Seek complete U.S. plants Dutch textile capital also seeks com- plete textile plants in the United States for shipment to Africa. This is Dutch business but it offers an opportunity for U.S. builders to sell new equipment to a U.S. mill on a sort of trade-in basis, and later to ship the used trade-in ma- chinery to Holland interests in African textiles. U.S. machine builders have not been accustomed to this type of transac- tion, but leading bankers in Rotterdam look favorably on the idea. © There has not been, under auspices of the Dutch textile associations, a re- search seminar where new developments and new machines and processes could be discussed with U.S. technicians in an effort to eliminate any difficulties opera- tors may have with the new high speeds. This type of seminar is needed, as some complaints have been registered on both European and U.S. high-speed equipment in the preparatory field. Technical dis- cussions would be of benefit, and would doubtless promote sales throughout the industry. © Spare parts are not easily obtained for U.S. equipment. There are shipping and warehousing concerns in Amsterdam and Rotterdam who have offered the pos- sibility of an industry wide depot for U.S. textile machine parts, even to the extent of shipments in bulk and ware- houses built to suit clients. Both cities have free ports and there would be no duty on the shipment until an item is dispatched to Dutch or other Common Market customers." © There are reputable machine sales agents who wish to expand their repre- sentation. U.S. machine firms not repre- sented in the Netherlands should make contact with these people and at least have their equipment on the available list. © Efforts should be made in the Ken- nedy Round tariff negotiations to reduce the EEC rates on U.S. textile machinery so as to diminish the margin of prefer- ence enjoyed by Common Market pro- ducers of such equipment. No quotas or other nontariff restric- tions are applicable to textile machinery when imported into the Netherlands from the United States; however, the tariff on U.S. capital equipment ranges from 6.9% to 7.4% ad valorem, plus 5% Nether- lands turnover tax of tax- and duty-paid value. This compares with a 3% import duty, plus the 5% turnover tax, levied on the same type of equipment, when imported from Common Market coun- tries. The EEC common external tariff rates, which will probably become effec- tive in 1967 or 1968, range between 8% and 12%. 11 U.S. manufacturers can use machines in idle Dutch plants Shipbuilding slump makes precision machinery available; inexpensive access to Market By WALTER D. VOELKER Consuming Engineer WALTER D. VOELKER Heavy machinery manufacturers in the United States now have a unique oppor- tunity to enter the Common Market without heavy capital investment. The slump in shipbuilding has made available in the Netherlands a substan- tial amount of precision machinery of marine engine plants, as well as the pro- duction machinery of some of the finest shipbuilding yards in the world. It is reported that one large U.S. com- pany has jumped the gun and is already producing its high speed printing ma- chines in The Netherlands in a marine engine plant. These machines are now sold throughout the Common Market under the label of the U.S. company. Many years of experience in produc- tion of top quality diesel marine engines and steam turbines qualifies these Nether- lands plants for production of many types of heavy machinery. The U.S. Trade Mission to the Nether- lands met with management of several large companies of this type and they are anxious to get machinery business. They offer to the U.S. manufacturer far more than high quality production facilities behind the tariff walls and in the lowest labor cost area of the Common Market. Long experience in producing for the European market, together with daily on- the-spot observance of market conditions, permit them to take advantage of each new development to increase profits. The technology of the United States is highly esteemed and mutually profitable arrange- ments can be worked out on either contract, license, or joint venture basis. U.S. companies can move into the Com- mon Market in small steps with little investment — or at as fast a rate as they desire. The Netherlands is an open door to the Common Market. With two of the world's finest seaports connecting by river barge with the Rhine River waterway, the transportation facilities are ideal. Labor is of high caliber and labor disturbances are almost unknown. Even with labor in short supply, the hourly wage rates are rigorously controlled by government to hold down production costs so The Netherlands can maintain its favorable competitive position in world markets. To these many advantages we can add the very friendly relationship that exists between our Governments. The Nether- lands speak frequently and with deep feeling of the timely help we provided in the post-war period. The Netherlands, with their centuries of experience in world trade, are keen businessmen noted for their integrity. English is spoken by most people, and this clean industrious country is a pleas- ant place to do business. During the period 1958 through 1961 over 150 U.S. firms made very substantial investments in the country. 12 Leads for Exporters 203 Canning, Preserving Foods Distributor of household products and foods seeks exclusive distributor of canned foods in Nigeria; W. J. Besseling & Co., P.O. Box 75, Rotterdam. I.R.-8. Importer of foods seeks agency for con- centrated juices, canned fruits and can- ned asparagus; Haagimport, Heerengracht, Amsterdam. I.R. -16. Importer wants agency for single strength fruit juices, frozen juices and hotpack concentrated juices; N. V. Koop- man & Co., 73 de Lairessestraat, Amster- dam. WTD 11/2/62. I.R.-36* Food importer seeks agencies for rai- sins, prunes and canned cherries. N.V. Agentuur en Commissiehandel v/h P.C. Vis & Co., Prins Hendrikkade 20-21, Am- sterdam. IR-134 •• Agency seeks food specialities and notions to sell to wholesalers and cha'n stores, including department stores. J. H. dee Veer, 28 Hacquartstraat, Amsterdam- Z. IR— 86. 207 Confectionery Importer of food product® seeks a source of maple syrup. Direct purchase from manufacturer. M. H. Boas N.V., Kloveniersburgwal 61, Amsterdam. I.R.- 145. •• Manufacturer of candy wishes to pur- chase small consumer packages of sweets (not chocolate) for resale. Would even- tually purchase in bulk for local packag- ing. M.&P. Smulders Confectionery Works, Ltd., Ceintuurbaan 33, Rotterdam. WTD 3/8/63. I.R.-275. 208 Beverage Industries Manufacturer of Dutch liqueurs wishes to act as a distributor of a U.S. manu- facturer of liqueurs who would in turn distribute Dutch liqueurs in the U.S. Boomsma Distilleries, Leeuwarden. I.R.- 206.* 209 Food Preparations Direct import of lecithin, pretzels, fruit flavors, whip topping or preferably act- as exclusive agent for manufacturer. Im- ponex N.V. Trading Co., v. Perseijnstraat 24, Amersfoort. I.R.-54. ** Seeks direct supplier of raw materials for margarine and other edible fats and shortenings. Pon En Co., v. Perseynstraat 14-18, Amersfoort. I.R. -55. 220 Textile Mill Products Importer of fabrics wants agency for cotton, worsteds, rainwear fabrics. Jan Weve Agenturen, Rietnesse 2, Amsterdam. I.R.-204. ** Importer and distributor of textiles seeks exclusive representation for piece goods, upholstery and curtain fabrics. Martinet General Products, Museumlaan 7, Bussum. I.R.-246. ** Textile dealer wants agency for fabrics to be used in clothing manufacturer, especially raincoat and suit linings and interlinings. Louis Ph. Polak, 5 Watteaus- traat, Amsterdam. IR-107. Importer and agent for textiles wants agency for textiles and yarns, teflon coated fabrics, synthetics, blended fibers, plastic materials, stretch fabrics, woolen and worsted fabrics and synthetic laces; N. V. Koopman & Co., 73 de Lairesse- straat, Amsterdam. WTD 11/2/62. I.R.-37. 225 Knitting Mills, Products Seeks source of bulk synthetic yarns for resale to Dutch spinners. Soclete Lainiere De Filature 'Nederlandj N.V., Johan van Oldenbarneveltlaan 47, The Hague. I.R.-108. 229 Textile Goods Seeks agency for textile piece goods, rainwear fabrics, laces, lingerie, worsted suitings, and marquisette. J. Stork, 70 Burg, van de Pollstraat, Amsterdam. I.R. -112. 232 Men's Youths', Boys' Furnishings, Work Clothing Seeks exclusive representative of a U.S. manufacturer of low-priced men's fur- nishings, especially suits and sportcoats. Fasting Agentuur En Handelsondernem- ing, Europalaan 645, Tilburg. I.R. 219 233 Women's, Misses', Juniors' Outerwear Manufacturer of ladies' dresses and children's wear wishes to expand line by handling U.S.-made teenage dresses, sportswear and women's dresses. Sindorn* Confectie N.V., Damrak 49, Amsterdam. I.R. 205 •* Agency wanted for high quality ladies wear from the U.S. Also, related novelty items and accessories. Hanett Confectie C.V., Euroboutique, N.V., Dam 2A, Amster- dam. IR-109. *•* Large clothing importer seeks exclu- sive agency for U.S. ready-to-wear and lingerie. Netherlands American Import Co. Texon, 107 Rokin, Amsterdam. IR-125. •k-k Direct purchase! from manufacturer of cheap women's apparel, children's dresses, and print clothes. Agentuur-en Commissiehandel D. Holtland, Duindoorn- laan 5, Haarlem. IR-30. 260 Paper Products Seeks newsprint, writing paper, printing, fancy wrapping paper, cellophane and other plastic materials for paper convert- ing. Also cardboard, cartons. Papier Ad. Honf Carton, Rokin 90, Amsterdam. WTD 4/16/63. I.R.-61. 280 Chemicals Seeks industrial chemicals especially anti-foam agents of silicones. "Ladeco." Oud Blaricummerweg 24, Laren. I.R.-40. ** Biochemicals. beverage concentrates (for sale to manufacturers) ; sanitation chemicals, solvents, drain-cleaning: chem- icals for detecting gas leaks. N. V. Che- mische Fabriek Naarden. Naarden. WTD 12/4/62. I.R.-79. 281 Industrial Chemicals Seeks reliable sources for dyestuffs, de- tergents and chemicals for finishing fab- rics. Kvk Verkoorjbureau N.V., Paslaan 9, Apeldoorn. I.R. -97. ** Manufacturers' representative in the equipment line wishes agency for sulphur for chemical and sugar In- dustry. Fa. Stuivlnga