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To reduce a growing backlog of demand and to boost foreign sales of motor vehicles, Poland in 1967 embarked on a major program to expand and modernize its capacity for manufacturing passenger cars. The program has centered on the renovation of production facilities at the Fabryka Samochodtow Osebowych plant at Zeran on the banks of the Vistula near Warsaw. In 1971 the Zeran plant turned out about 60,000 "Polish Fiats," the Polish version of the Fiat 125. In October 1971, Poland signed a cooperation agreement with Fiat for the construction in Poland of a new model car, the Fiat 126, a relatively low-priced small car, which will be produced in new facilities at Bielsko-Biala and Tychy. About 75% of the Italian supplies of equipment for the plant are to be repaid by deliveries of Fiat 126 components produced in Poland. Annual production is to begin at 3,000 units in 1973 and is to reach 150,000 units by 1979. Poland hopes to boost the total number of automobiles per 1,000 inhabitants from 15 in 1970 to 25 in 1975.

Western technology is playing an increasingly important role in the Polish motor vehicle industry. In addition to the new Fiat deal, Poland has recently signed an agreement with the French firm of Berliet for the modernization of the Jelcz bus plant. The capacity of the plant eventually will be expanded to 5,000 buses annually, of which 1,700 will be produced under the Berliet license. The assembly of buses began in December 1972, largely from imported components. By 1975, more than one-half of the parts are to be made in Poland. Licenses purchased before 1970 include Weber carburetors, Leyland diesel engines for trucks, Armstrong shock absorbers, and Westinghouse brakes.

Large amounts of agricultural machinery, mainly for domestic use, are produced in Poland. The country also exports and imports some items, including tractors and harvesters. Branches of the machine building industry that produced agricultural equipment received a high priority during 1966-70 in order to support the high rate of investment and mechanization in agriculture. Poland currently is upgrading certain types of tractors and combines with the installation of high-compression Leyland engines, manufactured under license.

Poland produces much of its own mining, metallurgical, and construction equipment as well as textile machinery. It also exports a number of items in these categories, but it still depends on imports for many types of modern special purpose equipment. It buys such items as giant conveyors from East Germany, truck-mounted cranes from Czechoslovakia, and modern textile machinery from Western Europe. Production sharing ventures with Jones Cranes and Cole Cranes of the United Kingdom, Stetter of West Germany, Steyr-Daimler-Puch of Austria, and Koehring International and International Harvester of the United States provide for cooperation in the production of heavy-duty cranes, concrete mixers, trucks for construction sites, hydraulic building machinery, and heavy tractors and crawlers.

Poland also has imported a considerable amount of chemical machinery. Throughout the 1960's a high priority was given to expansion of the chemical industry, and Poland imported chemical equipment from Czechoslovakia, East Germany, and the USSR as well as from Western countries, particularly West Germany, the United Kingdom, and France.

Poland has traditionally been an important manufacturer of machine tools, producing about 350 different types in 1971. Many of the tools lack the precision, fine tolerances, and durability of Western tools, however, and others seem to be over-engineered. Nevertheless, almost one-half of all types of machine tools are exported, and machine tools are almost the only type of machinery and equipment for which the Poles have developed a steady export market in the industrial West. Since 1965, a growing number of agreements have been signed with Western industrial firms in the hope of improving the country's ability to sell machinery outside the Communist countries. Some agreements provide for Poland to manufacture certain items of machinery under Western license. In other cases, Poland has contracted to produce components of complete installations to be sold jointly with Western firms.

Poland produces sizable quantities of military equipment for its own use and for export to the USSR. It is the second-largest producer of conventional armaments among the East European Communist countries, after Czechoslovakia. Poland manufactures tanks, armored personnel carriers, military aircraft, medium landing ships, submarine chasers, and naval auxiliaries. The country also imports large amounts of military equipment from the USSR, the value of which was estimated at between $175 million and $200 million in 1971.

b. Chemicals

The Polish chemical industry produces a wide variety of products, ranging from basic chemicals to more sophisticated goods such as chemical fibers, synthetic rubber, and pharmaceuticals (Figure 16). The industry has been granted a high priority in

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070030-5