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Mr G Barnes
Acting Secretary for the Environment
Government Secretariat
Lower Albert Road
HONG KONG
Your ref
Our ref GGR/MMD
ICI
Nobel's Explosives Company Limited
Date 29 September 1977
Dear Mr Barnes
Thank you for your letter dated 10 September with the draft concerning the information which will be requested with tenders relating to the explosives plant. I am assuming that as the note is in draft form, you would wish to have our comments in advance of finalising the document, as we are one of the interested partios.
As regards the information requested in general, we have no particular objection to supplying this, so far as we are able to do so. In certain respects, however, the information required does appear to pay little regard to the fact that the successful tenderer will require to operate the plant to the best of his ability so as to ensure the success, and maximise the profitability, of the enterprise. It could in fact be taken as axiomatic that any company with an international reputation to uphold would not enter into such a substantial capital investment without the confidence that it could supply virtually the whole of the market demand, and that it could do so at competitive prices and at adequate profitability to justify the investment. However, as has been repeatedly stressed to us, Hong Kong is essentially a free market, and therefore one in which prices are regulated by competition. In the circumstances of restricted manufacturing capacity, limited market demand and poor export potential, a local manufacturer must have substantial freedom to regulate his manufacturing operations, product pricing etc. The alternatives are that some degree of protection is given against importation of competitive products at excessively low or even dumping prices or, what is probably even less equitable; that importation of certain types of explosives is disallowed.
With regard to the more specific points, and taking these in order, I would comment as follows:-
a./
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