Venezuelan Government Finalises Nationalisation of Steel Company
Mérida, June 19th 2012 (Venezuelanalysis.com) – President Hugo Chavez approved funds yesterday to finalise the nationalisation of Sidetur (Siderurgica del Turbio SA), a major steel producer.
“I’m approving a credit from Fonden (National Development Fund) of $21 million and 298 million bolivars from the public banks to conclude the nationalisation, payment and relaunch of Siderurgica Nacional, which we’re creating from what was Sidetur,” Chavez said during a phone call broadcast on state television.
Ricardo Menendez, vice-president of economic productivity, said that Sidetur’s six plants were “totally operative” and their production had doubled since the process of nationalisation of the company began in 2010. Between January and May last year the company produced 50,412 tonnes of steel rods, compared to 119,793 tonnes during the same period this year, he said.
“The significance of nationalising the industry is that the government has to have control of natural resources and ... in this way make sure they benefit the people, not like how it was before, where our work generated wealth for just one sector [of the population],” Alejandro Alvarez, general secretary of the Sidetur union, told Noticias24.
The Venezuelan government initially announced the nationalisation in October 2010 following price speculation by Sidetur, and also citing steel as a “strategic industry”. At the time Sidetur accounted for 40% of steel rod production.
The minister of mining and basic industries José Khan said, “This is a company that must serve to guarantee inputs for housing, infrastructure, and roads.” Housing construction is currently a top priority for the Venezuelan government.
Following the announcement, Sidetur’s executive board opposed the move, saying they would “use use all legal mechanisms to oppose the government’s decision… Sidetur is a socially responsible company that respects the law and fulfils its objectives”.
Sidetur, a subsidiary of SIVENSA, has six plants which produce rebar, bars, beams, angles and flats.
Founded in 1948, it serves Venezuela and exports to 25 countries. Its nationalisation is seen to complement other now publically owned firms in the basic industries including Siderurgica del Orinoco (Sidor), Industria Venezolana de Aluminio (Venalum), and Aluminio del Caroní (Alcasa).
Published on Jun 19th 2012 at 8.14pm
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