Market
Conference
Venezuela's Chavez To Nationalize More Metals Companies
Venezuelan President Hugo Chavez has announced plans to seize aluminum, iron and other firms in the raw materials-rich region of Guayana, part of a years-long effort to convert the area into one of his cradles of socialism.
Norpro de Venezuela, which is linked to U.S.-based Norpro, and hot-briquetted iron maker Matesi Materiales Siderurgicos were both being taken over and put into government hands, Chavez said on state television Saturday.
Both firms are located in the southeastern Guayana region, where Chavez' government has been slowly taking control of all private interests related to mining and metals.
Chavez said there also are plans to nationalize other metals firms in the area and said companies that transport raw materials in Guayana would also be seized.
"We must demolish capitalism in the Guayana region to create our socialism, taking ideas from other models but with our own identity," Chavez said.
Chavez announced plans to nationalize Matesi, a unit of Argentine steel company Tenaris (TS), a year ago, and took operational control of it in August. Since then, he said the government has sought to agree on a sale price but couldn't reach an "amicable" deal. As such, Chavez said he decided to just seize it.
Tenaris, a unit of Argentine-Italian conglomerate Techint, lost its main Venezuelan steel mill, Sidor, to Chavez's nationalization program in 2008.
Venezuela's president has been nationalizing scores of companies and entire industries during his 11 years in power, as part of an effort to create "21st Century socialism" in oil-rich Venezuela. The government controls the coffee, cement and electricity sectors, as well as large parts of oil and banking sectors. It now also controls much of the mining and metals sectors.
The government's increased control in the Guayana region could end up expanding the government's already-bloated basic industries company CVG, or Corporacion Venezolana de Guayana. It is a conglomerate of 16 firms with some 20,000 employees that suffers from chronic labor disputes and underinvestment. It doesn't provide consolidated financial reports.
During a ceremony Saturday with officials from CVG and other state-run basic industries firms, Chavez ordered dozens of them to raise their hand and take an oath of commitment to socialism and to promise to "battle corruption and inefficiency."
Chavez guaranteed he wouldn't lay off any workers from private firms that are being nationalized.
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com
Sourced from www.easybourse.com
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