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Venezuelan Workers Demand Nationalization of SIDOR Steel Plant

Mérida, May 9, 2007 (venezuelanalysis.com)— Workers held protests outside the SIDOR steel plant in Puerto Ordaz yesterday, demanding that the government nationalize the company. Last Thursday, Venezuelan President Hugo Chavez had warned that he would nationalize the Argentinian-owned company if they didn't meet the needs of domestic industry instead of exporting to foreign customers. It appears, however, that the government has reached an agreement with the company today, allowing the company to remain in private hands.

Workers belonging to the labor union of SIDOR workers gathered outside the plant yesterday, blocking traffic of a nearby road. According to an official of the labor union, workers did not allow entry to the plant starting in the early morning hours.

"As workers we are demanding a definitive answer to the situation," said Ulmaro Ramos, secretary of the union, on a local radio station. A spokesperson for the union stated that the workers are in favor of the president's intention to nationalize the company.

"We are supporting the president's announcement about the possibility to liberate the company which has been subjected to slavery of neo-liberal capitalism for the last 8 years," said José Meléndez, member of the union organization Alianza Sindical de Sidor. Meléndez said that when the plant was privatized there were 11,600 employees and that now there are only 5,700 workers who are "exploited and without any kind of benefits."

Another union, Unidad Matancer, of the political party Causa R demanded that the government take the nationalization even further and give the majority of the company shares to the workers of the plant.

"We are not divided and we completely agree that the president should acquire the control of this company so that it can eventually be passed on to the control of the workers," said Meléndez.

SIDOR is the largest steel plant in the Andean region with a capacity of 4.2 million tons annually. The company was state property since its formation in 1962 until 1998 when it was privatized. 60 percent of the shares were acquired by a consortium named Amazonia, made up by the Argentinean firm Techint as a majority partner, as well as the Mexican Hylsamex, the Brazilian Uniminas, and the Venezuelan company Sivensa as minority partners. The Venezuelan government retained 20 percent of the shares and the remaining 20 percent were given to the workers of the plant.

SIDOR produces wire and pipes, including the kind of pipe that the Venezuelan national industry needs, and according to company reports, 63 percent of the production is directed to the Venezuelan market and 37 percent to exports.

The government, however, maintains that they have to import the piping that they need for the oil industry from as far off as China. Chávez warned SIDOR last week that if they did not supply the domestic market with the needed products, that he would put in place a law to require them to supply all Venezuelan demand before exporting any production.

"I have made the order to call Mr. Paolo Rocca (president of Techint) and I'm going to tell him: We are going to make a law, because you have to guarantee to me first, before exporting a single ton of steel, that all the Venezuelan processing companies are supplied," said Chávez in his televised address last Thursday.

Chávez went on to say that if the president of the private company did not agree then he would nationalize the company and the state would take control of it.

It appears, however, that the Venezuelan government and the Argentinean company Techint may have come to an agreement today. According to initial reports, the company has agreed to the conditions demanded by the Venezuelan government. Those conditions include:

  • Lowering the prices for the domestic market between 15 and 20 percent
  • Switching production more toward the domestic market in order to substitute imports
  • Paying a higher price for the iron used in the steel plant than it receives from the state-owned company Ferrominera.

The private steel plant receives the raw material it uses in steel production from a state-owned iron mining company that has, over the last 8 years, sold iron to the private company at a subsidized rate.

The agreement with the private company should be finalized by next week when the president of the company, Paolo Rocca, is expected to travel to Caracas to sign the final document.

Published on May 9th 2007 at 6.00pm