American Banks Interested in Expanding Potash Production in Israel

The First National Bank of Boston and the Lazard Freres Bank expressed interest in joining the World Bank in a major investment project to expand production of the Dead Sea potash and chemical works in Israel, it was reported today.

The two banks would provide an investment of about $11,000,000 while the World Bank would loan $22,000,000 towards the $45,000,000 investment project.

Mordechal Bentov, Minister of Development stated in the Knesset today that participation by substantial private capital in an enterprise need not change its character. “On the contrary,” he stated, “this would additionally secure its stability and profitability.”

He was replying to General Zionist Joseph Saphir who questioned the Minister’s criticism of the opinion voiced by World Bank president Eugene Black, that private investment should be encouraged for the Dead Sea project. However, Mr. Bentov reiterated his view that the Dead Sea Works Ltd. must retain its character of a national-public project.

Meanwhile, it was officially announced here today that plans for increasing Israel’s steel production within the coming years were formulated yesterday under an agreement signed by the Ministry of Commerce and Industry and the Koor Company, owners of “Steel City.” According to the official announcement, “Steel City,” which is located near Haifa, will produce 120,000 tons of steel and iron by 1962 covering practically all Israel’s demand for industrial structural steel. Under the new expansion plans, total annual production of 300,000 tons is foreseen as the ultimate goal.

Fifty-one million Israeli pounds (about $28,000,000) has already been invested in the steel plant, a considerable part of which was loaned by the Government from its Development Budget. This government participation was subject to severe criticism by economists in the past who doubted the reliability and efficiency of the plant.