Venezuelan Government Aims to Revamp Industry in Bolivar State

Mérida, 3^rd  May 2013 (Venezuelanalysis.com) –The Venezuelan government appointed new management and renewed investment in the state-owned conglomerate Corporacion Venezolana de Guayana (CVG) and its subsidiaries, in efforts to raise production in Venezuela’s industrial sector.

Yesterday, Vice-president Jorge Arreaza announced that the government had appointed new presidents of CVG and a number of its subsidiaries. The move follows a surprise win by opposition candidate Henrique Capriles in Bolivar state last 14 April, despite Hugo Chavez winning in that state by 8 points last October. It also follows much worker discontent with some of the CVG management, and lower levels of production.

Former minister for food, Carlos Osorio will take over the presidency of CVG from Rafael Gil Barrios, while subsidiaries Ferrominera Orinoco (FMO), Venezuelan Aluminium (Venalum), and Siderúrgica del Orinoco Alfredo Maneiro (Sidor) will be headed by Ivan Hernandez, Major General Euclides Campos and General Justo Pietri Noguera respectively. Prior to becoming minister for food in July 2010, CVG’s new president served as president of the National Superintendency of Agricultural Silos and Storage (SADA).

Worker controlled aluminium producer Alcasa also has a new president, Angel Marcano, while in a separate announcement, the government appointed former tourism minister Alejandro Fleming to run Venezuelan Industrial Supplies.

So far, it is unclear how workers have reacted to the new presidents. Last August, Sidor workers spoke out against the Venezuelan government’s decision to dismiss the factory’s president Carlos D’Oliveira. D’Oliveira, a member of the Revolutionary Steel Worker’s Front, was nominated as company president by the plant’s workers in 2010 as part of a plan to implement worker control in the factory.

The companies are all key raw material manufacturers; Sidor is the country’s largest steel producer, while FMO supplies iron ore and other industrial materials and Venalum is a major producer of aluminium.

Renewed Investment

According to Arreaza, the new appointments are part of a government push to increase productivity in Venezuela’s industrial sector.

In a press conference on Thursday at the CVG headquarters in Ciudad Guayana, Bolivar state, Arreaza pledged to invest 4 billion bolivars in local raw material industries.

Bolivar state has historically been considered the industrial heartland of Venezuela, but in recent years the government has recognised the need to increase industrial production. A number of significant government investments have been made over the last 12 months, including a pledge last June to invest US$268 million in Sidor, and US$13.7 million in another CVG company, the aluminium producer Cabelum.

In February this year, Sidor’s mills were described by Minister of Industries Ricardo Menendez as of “high strategic value”, following a government decision to invest BsF2,308 million in the company. In the same statement, Menendez also pledged BsF62 million to another CVG subsidiary, the aluminium processor Rialca.

Overall, however, the manufacturing sector grew by only 2.1% last year, according to figures from the Venezuelan Central Bank (BCV).  In a report from the Ministry of Industry, FMO closed 2012 running a deficit for the second year in a row, despite reaching production targets. Venalum fared better, boasting a profit even though it’s running at 35% capacity, according to the ninistry.

In its 2012 third quarter report, the BCV indicates that domestic consumers of raw industrial materials were increasingly turning to imports to satisfy growing demand.

“Efficiency or Nothing”

Yesterday Arreaza also announced the creation of the industrial sector’s first “micro-missions”, a main component in the new social mission, ‘Efficiency or Nothing’. Immediately following his election last month, Maduro launched the ‘Efficiency or Nothing’; an initiative based on former President Hugo Chavez’s planned campaign to tackle bureaucracy and inefficiency.

According to the state news agency AVN, the industrial micro-missions are intended “to improve the quality of life and dignity socially workers of state enterprises, taking into account the special conditions and needs arising from the workplace”.

Arreaza stated that these micro-missions will be run by workers “chosen by their peers”, and will be coordinated by the newly formed “High Command of the Missions”. The high command is staffed by a number of senior government officials, including Arreaza himself.

Maduro is expected to meet with CVG management on Monday.