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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7

Swedish shipbuilding firms have entered into other areas of construction in order to make full use of existing capacity during periods of slack orders: Eriksbergs Shipyards, Goteborg, and AB Civilengineering, for example, jointly designed a floating pulp factory capable of producing 40,000 tons of pulp annually. Oskarshamm Shipyard, Oskarshamm, has successfully developed a prefabricated one-family steel home in an attempt to diversify its output.

Swedish manufactures of railroad motive power and rolling stock supply most of the requirements of the Swedish State Railways, with the exception of some diesel locomotives, special freight cars, and tank cars. A considerable quantity of coupling equipment is also imported, but Sweden exports braking equipment, wheels, axles, locomotives, and some rolling stock. AB Svenska Jarnvagsverkstaderna is a major producer of diesel locomotives and all types of rolling stock and a prominent manufacturer of diesel railbuses. ASEA supplies electrical components for electric locomotives built by ''Nydqvist och Holm AB. Kockums Mekaniska Verkstads AB'' produces diesel switching locomotives and rolling stock.

Sweden also produces a wide variety of military transportation equipment and material. Production in the technologically advanced aircraft industry is limited to military-type aircraft and certain missiles and space boosters. Almost all aeronautical research is performed under government sponsorship. Jet aircraft are produced by SAAB-Scania at its Linkoping plant, while AB Malmo Flygindustri manufactures light aircraft. Svenska Flygmotor AB modifies and adapts foreign-designed engines for installation in Swedish aircraft. Domestic shipyards build submarines, light cruisers, and destroyers used by the Royal Swedish Navy. Swedish industry also produces a wide range of land combat vehicles.

c. Chemicals

The chemical industry produces about US$1 billion worth of organic and inorganic chemicals in a wide variety. Domestic output is not sufficient, however, and substantial quantity of chemicals must be imported. In 1970 Sweden had a $300 million trade deficit in chemicals, accounted for chiefly by imports of organic chemicals, basic plastics, plastic semimanufactures, and synthetic rubber. Primary Swedish manufactures in 1970 were sulfur oxide (703,000 metric tons), oxygen (364,000 tons), chlorine (300,000 tons), and fertilizer compounds (1,500,000 tons).

The chemical industry is almost entirely privately owned and is concentrated by a few large companies. A few of the leading firms are Boliden AB, the predominant manufacturer of inorganic chemicals (except for chlorine and related products normally manufactured by the pulp and paper industry — primarily Svenska Cellulose AB); AB Helios Kemisk-Tekniska Fabriker, a producer of soaps and detergents; and Mo och Domsjo AB and Korsnas-Marma AB, leading producers of organic chemicals.

The important Swedish chlorates output is closely linked to the operations of Svenska Tunsticks AB, Jonkoping; a subsidiary, Alby Nya Klorat Fabriks AB, Avesta, manufactures chlorates for the domestic and foreign match factories of the parent company. AB Bofors Nobelkrut, in addition to producing dynamite, propellants, and high explosives, holds an important position in pharmaceutical manufacturing and research.

The production of organic chemicals was spurred by the outbreak of World War II, which cut off normal trade flows. Since the war, and particularly since 1963 when the Stenungsund petrochemical complex began operations, the manufacture of organic chemicals has expanded rapidly. Plants of three companies, Fosfalbolaget, Unifos Kemi AB (owned partly by Union Carbide), and Svenska Esso AB, are located at Stenungsund, just north of Goteborg. The Svenska Esso cracking plants produce a number of basic materials including ethylene. Large quantities of the ethylene are used to produce plastics, mainly polyvinyl chloride. During 1970 and 1971, the Swedish chemical industry continued to grow at about 10% a year, nearly double the rate of growth for all industry, in spite of depressed profits and extremely slow growth in the economy as a whole.

d. Food processing

The food processing industry provides quantities of basic foodstuffs sufficient for domestic needs, as well as small amounts of certain commodities, notable meat, dairy products, and flour, for export. In terms of value added, the most important branches of the industry are slaughtering and meatpacking, baking, and dairy products. Most of the commodities processed by the industry come from domestic farm output. The market value of the total production of processed food, vegetables, and tobacco was US$3 billion in 1969.

To a much greater degree than in other Western European countries, a high degree of cooperative activity and state control characterizes the Swedish agricultural processing industry, but direct state operation is confined to the tobacco and liquor monopolies. Governmental influence, however, is

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7