CONFIDENTIAL
2
deployed at home; the other point was that it might damage
Courtaulds' credibility and undermine their stance with Government on the disruption caused by imports if Courtaulds manufactured themselves in a low-wage country, for assuredly the UK could not be ruled out as a sales area for the plant. Sir Peter said that he did not think that Courtaulds' credibility would be affected; nor did he think that the argument that such production would be an export of jobs held much water indeed, production at home would be assured by the export of raw material to a tied outlet. As regards management, Sir Peter thought that Courtaulds could easily buy or train good Chinese management to look after any operation they might set up in Hong Kong. The other argument was that if Courtaulds were exporting fibre and fabric to that part of the world then someone else would make it up why shouldn't
Courtaulds?
5
Sir Arthur expressed interest in what Sir Peter had to say. He said that he had not been to Hong Kong for eight years. Sir Peter urged him to go and see for himself the opportunities: a personal visit was definitely well wortwhile. He said that the Governor would make Sir Arthur very welcome.
Japan
6 Sir Arthur said that Courtaulds had small fabric sales in Japan: they found it a very difficult market to crack. Sir Peter said that time, patience and money was needed.
7 Sir Arthur said that Courtaulds had given the Japanese their formulations on marine paints. It was a bit of a gamble but could pay dividends in the long term. If their type of paint was used when a ship was first built in Japan, when the ship
subsequently put into a dry dock elsewhere in the Far East Singapore, Malaysia etc then Courtaulds themselves would have to supply the paint as the Japanese had no overseas outlets. There was the danger the Japanese, now that they had the formu- lations of Courtaulds' paint, might try to break into the market outside Japan but this was a calculated risk. Sir Peter said that, given that he believed that Korea would take over from Japan in a few years as а major shipbuilding nation, it would make sense for Courtaulds to establish themselves in marine paints in Korea.
8
Sir Arthur mentioned briefly that Courtaulds thought that the time was ripe for them to push carbon fibre products. The defect in the RB 211 engine had put back the development of carbon fibre, and it was now used mostly for golf clubs and fishing rods. However they believed that it had a large potential. They had been negotiating for a joint partnership with Mitsubishi, but their terms had been rejected by Mitsubishi as too hard.
They thought that perhaps Mitsubishi had been warned off by Toray.
9 Sir Arthur also said that Courtaulds was doig good business with North Vietnam. They had set up a special team to deal with state-trading companies and they had achieved some success, which was, of course, as yet on a relatively small scale.