US shipping magnate Daniel Ludwig gives up his Amazonian dream
If Daniel K. Ludwig, the United States shipping magnate and financier, could not tame the Amazon, who can?Skip to next paragraph
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That is the question emerging from Mr. Ludwig's decision to give up his billion-dollar, 4 million-acre Amazonian dream.
Known as Jari, the Ludwig project sought to build a huge wood pulp and agricultural complex along the western banks of the Jari River. The Jari is a tributary of the Amazon, the world's largest river in terms of volume and area of its drainage basin.
But after investing $845 million in the complex, Mr. Ludwig is calling it quits. He is turning over the grandiose jungle development plan and its acreage, as big as Connecticut, to an all-Brazilian consortium being formed by private businessmen.
The reason: Mr. Ludwig was unable to overcome the problems of Amazon development. The tropical rain forest that blankets the 2-million-square-mile Amazonia kept swallowing up his development.
''He had a dream for a great venture that would be a kind of example to the world,'' commented Antonio de Bulhoes Carvalho, a Brazilian lawyer working on the transfer of the property for Brazilian interests.
The new firm, to be known as Companhia do Jari, brings together the heads of Brazil's top 10 banks, its three largest insurance firms, and its four biggest construction companies. Government muscle has been involved in forming the consortium, ''leaning on these businessmen as their patriotic duty to join the arrangement,'' in the words of Heitor Calvacanti de Souza, another lawyer involved in the transfer.
Mr. Ludwig will not profit from the transfer, except to end his investment drain. He is signing away the property in exchange for a small share of future profits, if any, for a cancer research institute he established some years ago.
The Ludwig dream was like many an Amazonian dream - one that drained both the physical and financial resources of the dreamer.
The history of Amazonia is replete with stories of the dreamers. Rubber barons at the turn of the century made fortunes as they sought to turn back the rain forest and win over nature only to have the Amazon and its rich tropical vegetation cover over their efforts in years later.
The city of Manaus, 1,000 miles inland, where oceangoing transport regularly come to call, has an opera house dating to that era - stark testimony to the dreams of earlier visionaries.
Mr. Ludwig had 250,000 acres of jungle cleared and replanted with Asian gmelina trees, Caribbean piones, and eucalyptus. He also planted 67,000 acres of rice and stocked a ranch with 11,000 head of cattle and buffalo.
He put in 38 miles of railroad, 300 miles of paved highway, and 2,500 miles of secondary road. A custom-built pulp factory was towed from Japan around Cape Horn and up the Amazon at a cost of millions of dollars.
A deep-water port, 250 miles up the Amazon from the Atlantic Ocean, was put in, along with a lumber mill, a paper mill, a chemical plant, and a log-burning thermal electric plant.
And a new city was raised from the jungle. Some 35,000 people live there now on a site that in 1970 supported fewer than a thousand.
But there were countless problems for Mr. Ludwig. Associates cite these:
* Investment of at least another $500 million was needed to get the project fully functioning -- and there was no assurance that this would be enough.
* Brazilian land law that kept whittling down the size of the Amazonian empire from its original 9 million acres to the present 4 million, with much of that in dispute.
* Mr. Ludwig's style of management - often secretive, more often temperamental - which resulted in some 25 changes in project directors since 1968.
* Mr. Ludwig's health problems, which have kept him sidelined off and on for the past two years.
Some of these problems will not concern the Brazilian consortium. Brazilian law will not limit the land area of the project as long as Brazilians own it.
Moreover, the Brazilian government has over the years become less than fully cooperative with Ludwig Enterprises, but is expected to lend a strong assist to the new owners. After all, the government was deeply involved in setting up the new consortium, using patriotism and a good deal of arm-twisting to get the group together.
But whether the new owners, who are to take over today, can succeed where Mr. Ludwig failed, remains to be seen. The biggest problem was not land, nor government interference, nor Mr. Ludwig's management techniques, but rather the Amazon itself.
The consortium is certainly going to try, however, under the leadership of Augusto Trajano de Azevedo Antunes, an elderly Brazilian industrialist and longtime friend of Mr. Ludwig.
For its part, the government will begin paying public services for the City of Jari - which Mr. Ludwig complained was costing him $5.5 million a year.,
Whatever the future of Jari, there is no doubt in Brazil that it is the biggest Amazon project ever begun and one that, if unsuccessful under new owners , is not likely to be tried again soon.