Venezuelan Steel Company and Housing Developments Nationalized

Caracas, November 1^st 2010 (Venezuelanalysis.com) – Venezuelan President Hugo Chávez announced on Sunday the expropriation of Siderúrgica del Turbio (Sidetur), a major producer of steel used in the construction of homes, bridges and other infrastructure and public works.

The president also announced government interventions in six large housing developments currently under construction, eight others that are ready for residents to move in, and increased government oversight in an additional 19 privately-run housing projects.

Chávez announced the expropriations during his weekly televised address to the nation, “Aló Presidente.”

“Not just any company”

Sidetur manages 40% of Venezuela’s steel rod production and is accused by the government of speculating with prices of construction materials. The firm produces a number of steel-based construction materials (rebar, bar, beam, angle and flat), and manages six plants in Venezuela along with 15 collection and recycling centers for scrap metals nationwide.

According to the company’s website,  Sidetur has an annual production capacity of 835,000 tons, enough to build an estimated 160,000 homes.

“This is not just any company,” affirmed Venezuela’s Minister of Mining and Basic Industries Jose Khan. “This is a company that must serve to guarantee inputs for housing, infrastructure, and roads,” he said.

All of Sidetur’s assets and facilities are included in the expropriation decree.

In a statement published on Monday, Sidetur’s Executive Board expressed its opposition to the expropriation as well as plans to prevent it from moving forward. “There are no objective justifications for the expropriation of our firm, and we will use all legal mechanisms to oppose the government’s decision… Sidetur is a socially responsible company that respects the law and fulfills its objectives,” the company affirmed.

The company went on to ask the government “to consider the impact this measure will have on infrastructure and construction plans as well as the impact on the workers and their families.”

Elias Bessis, Lara state president of Venezuela’s largest business federation (Fedecamaras), called the expropriation “alarming… I don’t even want to know how things will look when they [the state] control all of the country’s rebar production,” he stated.

Rebar, short for reinforcing bar, is also known as reinforcing or reinforcement steel. It is commonly used as a tensioning device in reinforced concrete structures helping to hold concrete in compression, and is made of unfinished tempered steel.

Worker Support and Plan Guayana Socialista

Alejandro Alvarez, a steelworker at Sidetur’s plant in the state of Bolivar, expressed his support for the expropriation on Monday during an interview with the state television channel, Venezolana de Television (VTV).

According to Alvarez, the measure will have a positive impact on the country’s development since it will complement other publicly-owned firms in the basic industries, including Siderúrgica del Orinoco (Sidor), Industria Venezolana de Aluminio (Venalum), and Aluminio del Caroní (Alcasa).

According to Carlos de Oliveira, the president of the state-owned Siderúrgica del Orinoco (Sidor), which is Venezuela’s largest steel producer and was nationalized in 2009, the expropriation of Sidetur leaves 87% of rebar production in the hands of the Venezuelan government.

“Today we feel strengthened by the decision [to nationalize Sidetur], a decision which is neither accidental nor isolated. This decision is taken in a context in which the president has taken the problem of housing personally,” affirmed Oliveria.

Rada Gumuluch, President of the Venezuelan Aluminum Industry (Venalum), explained that Sidetur’s nationalization is part of government efforts to create a national construction industry to better serve what he called “the public good.”  

“The integration of the two iron-steel and aluminum industries is strategic for the country and for the construction of socialism… To guarantee socialism, the means of production must be at the service of the people,” stated Gumuluch on Monday.

Sidetur’s expropriation was discussed on VTV within the context of Plan Guayana Socialista 2019 – launched by Chavez in 2009 – in which the national government seeks to play a majority role in the aluminum, iron, and steel industries.

A key component of Plan Guayana Socialista is to establish worker control of production, which according to Gumuluch strengthens and democratizes these basic industries. “This conglomerate of industries [steel, iron, aluminum] will respond to the people’s needs. We are moving towards a social, collective, indirect form of property. The state will administer the industry, but the workers are the fundamental actors, in association with society,” affirmed Gumuluch.  

“We’ve been waiting a while for this to happen. It is part of securing dignity for us workers. We have finally removed the heel, the boot of the bosses,” stated Tirso Garcia, steelworker at Sidetur’s plant in Antimano, Caracas.

“Housing for the People”

“Private interests, the speculators, they don’t want us to mass produce housing for the people. They operate on the capitalist notion of supply and demand. The less housing available, the higher the demand, and higher earnings for them,” affirmed Chavez.

The interventions in the housing sector announced over the weekend include the full expropriation and culmination of six housing construction projects, four of which are found near the nation’s capital; the temporary occupation of eight housing projects (temporary because they are ready to be handed over to residents); and close supervision by government agencies of another 19 housing developments.

“To all the families who have paid into these projects, the government guarantees your deposits and your apartments, we will not allow you to become victims of the bourgeoisie. We are returning them [the apartments] to their rightful owners,” stated Chavez as he announced the housing-related interventions on Sunday.

Public housing has been in Venezuelan news recently, as heavy rains last month left hundreds of Venezuelan families dependent on government shelters. Also, President Chavez signed agreements with Russia, Iran, Belarus and Portugal to build or buy roughly 35,000 homes during his October eight-nation diplomatic tour.