MAC: Mines and Communities

Venezuela: Chavez nationalizes cement and iron-steel industries

Published by MAC on 2008-04-13

Venezuela to take over foreign cement firms

A taskforce comprising state-run oil firm Pdvsa, the Ministry of Basic Industries and Mining, Ministry of Light Industries and Trade and the Ministry of Housing is to negotiate the takeover.


8th April 2008

The Venezuelan government has appointed a special taskforce to negotiate takeover of foreign cement companies operating in the country. The committee comprises representatives of state-run oil firm Pdvsa, the Ministry of Basic Industries and Mining, Ministry of Light Industries and Trade, and Ministry of Housing.

Pdvsa CEO and Energy and Petroleum Minister Rafael Ramírez is the head of the committee, which Monday met for the first time with the cement firms.

During the encounter, Ramírez advised the corporations that the Venezuelan State intends to become a majority shareholder in the sector. Consequently, the government is considering implementation of a mechanism similar to that adopted to make foreign oil corporations enter into joint ventures where Pdvsa owns a majority stake.

"We are certain there is a possibility to reach an agreement with the companies to implement a system of control, which would be similar to that adopted in the oil industry, and which involves the State holding a minimum 60 percent stake. This shall give us an efficient control," explained Ramírez.

According to the official, "the companies were explained that we have the purposes of guaranteeing control over the basic industries that are vital for our domestic development plan. The activity of the construction sector shows restrictions and bottlenecks, and cement is of the essence."

The three foreign cement corporations targeted, namely Mexico's Cemex SAB, France's Lafarge SA and Switzerland's Holcim Ltd, have to appoint their delegates to the negotiations with the committee. In this connection, Pdvsa CEO highlighted that talks would be "coordinated by the ministers, and bilateral meetings will be held."

According to Ramírez's remarks, the Venezuelan State plans to purchase a stake in the three cement corporations owned by multinationals. However, last Sunday President Hugo Chávez said "one of the owners of the cement company that has a plant in (northwestern) Zulia state sent a message showing concern. These have always been national private companies. I sent him a message back telling him not to worry. All we intend to do is nationalizing what was privatized, namely the big cement firms that were virtually given away. I am talking about the large cement plants that are owned by the State."

From the three foreign cement companies targeted, only Holcim took part in the nationalization of formerly state-owned Cementos Caribe.


The Mexican Foreign Ministry said Ambassador to Venezuela Mario Chacón held a meeting with the authorities "to obtain further information," Efe reported. Chacón said the Mexican government is ready to support "any actions that are relevant and allow the government to meet its obligations to advocate (Cemex') legitimate interests."

Meanwhile, Venezuelan Ambassador to Mexico Roy Chaderton issued a communiqué claiming "this is not a compulsive, violent or aggresive takeover of premises, but a process that meets the constitutional principles and is being negotiated with the parties concerned."

Translated by Maryflor Suárez R.

Chavez nationalizes Venezuela's cement industry


4th April 2008

CARACAS - President Hugo Chavez on Thursday announced the immediate nationalization of Venezuela's cement industry, a move that will hit Mexico's Cemex, just a year after Chavez launched a wave of state takeovers.

The former paratrooper last year launched a broad nationalization crusade in the energy and telecommunications sectors while threatening to go after other industries such as banking, cement and steel. "Nationalize it, and as of this instant take all the legal measures ... to nationalize in the short term all of the national cement industry," Chavez said during a televised speech.

Chavez has frequently accused private cement companies of exporting their production rather than selling it into the domestic market to help ease a housing shortage that has drawn complaints from his supporters. Last year he warned of "corrective actions" against Venezuelan Cemex, a local division of Cemex after residents accused it of polluting.

Analysts at the time said Cemex was big enough that it would not likely be affected by a takeover of its Venezuelan holdings. Investors in recent weeks have started worrying that the world's No. 3 cement producer could face lower profits as a result of an economic slowdown in the United States. Venezuela in 2007 took over the assets of Cementos Andinos, owned by Colombia's Argos.

Chavez threatened to nationalize steelmaker Ternium Sidor over domestic supply complaints but eventually negotiated a deal to avoid it, and threatened to nationalize banks he accused of poor lending practices, but never carried out the threat.

Thursday's announcement shows Chavez returning to his combative 2007 style of aggressive nationalizations after focusing this year on practical issues following his defeat in a December referendum that would have extended his socialist drive.

He promised to attack day-to-day issues like food shortages and rampant crime after an energy sector nationalization drive that pushed Exxon Mobil and ConocoPhillips out of the OPEC nation.

(Reporting by Brian Ellsworth; Editing by Eric Walsh)

Chavez nationalizes steel sector partly owned by Argentina

10th April 2008

President Hugo Chavez announced plans to nationalize Venezuela's biggest steel maker, Sidor, which belongs to the Argentine-Italian group Techint, with shares in the New York Stock Exchange. The group has close links with the Kirchners.

Sidor has been undergoing industrial action for months and Techint requested in a letter addressed to Venezuela's president Hugo Chavez his intervention "to help find a constructive solution to the labor conflict".

The letter was made public Wednesday a few hours after President Chavez announced the nationalization of the Sidor plant (Siderúrgica del Orinoco) belonging to Techint which in turn responds to Luxembourg based Ternium.

The nationalization decree refers to the "arrogance" with which Sidor officials addressed the collective labor bargaining process for the new contract which was started in March 2007.

Techint which is known globally as one of the world's main suppliers of steel pipes for the oil industry purchased Sidor (one of the largest from the region) in 1997 for 1.2 billion US dollars. The Argentine-Italian group holds a 60% stake, the Venezuelan government 20% and the workers and staff the other 20%

In the letter signed by Techint CEO Paolo Rocca, a close friend of the Kirchner family in Argentina, he underlines the "significant improvement in Ternium Sidor salary and benefits offer to Sidor workers" as well as the need to "keep strengthening" the close links of Venezuela, Brazil and Argentina in the framework of Mercosur.

Ternium Sidor and the plant's union, Sutiss have been discussing the new contract since March 2007 in the midst of growing animosity with a wave of stoppages and strikes. "The incorporation to the payroll of the steel plant of over 600 workers, the increase in old age minimum pensions for over 2.500 retired personnel and the willingness to offer a pay increase of 130%" were some of the "significant improvements" made by Ternium Sidor emphasized Mr. Rocca in his letter to the president of Venezuela.

Rocca played on the strong links between Venezuela, Argentina and Brazil "given the outstanding participation of Techint in the three countries". Technit is also involved in major public work contracts in Latinamerica.

He also invited President Chavez, "with the utmost sense of responsibility and participation", to join the labor contract talks so that the close links between Ternium and the Venezuelan government "help to overcome the current situation which goes back for over a year".

Venezuelan vice president Ramon Carrizalez announced on Wednesday the nationalization of Sidor, which had been privatized in 1997.

"I was in contact with President Chavez and I told him of the great arrogance of the corporation that was abandoning the negotiations round because it had no further counter offers and Chavez instructed me to inform them that the government was taking control of the company", said vice president Carrizalez.

"This is a government that supports workers", he said adding he was confident the "sovereign decision" from the Venezuelan government "would not affect relations with the Argentine nation".

"We have excellent relations with Argentina and that country has always been most respectful of our domestic decisions", said vice president Carrizalez.

In the past two years the Chavez government has taken control of foreign owned telecommunications, electricity and gas companies and just a few days ago the cement sector, involving Mexican and Swiss companies.

President Chavez believes companies should concentrate on the domestic market before overseas sales.

Chavez had already threatened to take control of the company last year unless Sidor sold more of its steel in Venezuela. At the time the intervention of Argentine president Nestor Kirchner helped Mr Rocca out of the situation.

Venezuela renationalizes iron, steel industry


9th April 2008

CARACAS -- The Venezuelan government announced Wednesday the renationalization of the Orinoco Iron and Steel (Sidor) enterprise, the biggest steel group in this South American country.

The measure is the second of its type affecting foreign capital this week after Colombian President Hugo Chavez announced on April 3 the nationalization of the cement industry.

Vice President Ramon Carrizales said Sidor's nationalization was decided by Chavez to defend the enterprise's workers. "The president has instructed me to inform the company that the government is taking control of the business," Carrizalez said .

The rights of the enterprise's major stockholders, Italian-Argentine Ternium-Technit, will be respected, said Carrizales in reference to paying for their Sidor stocks.

Carrizales called Ternium-Technit directors to begin negotiations with the government to sell their 60 percent share. The government holds 20 percent and the workers hold 20 percent.

Sidor was privatized in 1997 by the previous Venezuelan government.

The announcement of the renationalization was celebrated by thousands of workers from Sidor.

The guild was demanding Sidor to sign a new collective contract and labor improvements including a daily wage of 50 bolivares (23.25 U.S. dollars). Sidor's management was offering a maximum of 44 bolivares (some 20.46 dollars) per day.

Carrizalez said the company had shown "great arrogance" in the talks.

He added that Sidor had maintained a colonialist, disrespectful and slavery attitude toward the workers.

Carrizales claimed the workers were exploited, underpaid and the enterprise violated their labor rights enshrined in the Venezuelan constitution.

Chávez nacionalizó las cementeras


5th Abril 2008

CARACAS - Cemex, de México; Lafarge, de Francia; y Holcim, de Suiza, fueron acusadas de especular.

El presidente venezolano, Hugo Chávez, anunció la nacionalización de la industria cementera del país en el corto plazo, en una medida que afectará principalmente a la unidad local de la mexicana Cemex, la francesa Lafarge y la suiza Holcim.

"Nacionalícese y a partir de este instante tómense todas las medidas jurídicas (...) para nacionalizar en el corto plazo toda la industria cementera nacional", anunció el Mandatario.

"Ya basta. Se llevan el cemento", dijo Chávez, quien anunció que habrá indemnizaciones a las empresas. Luego de nacionalizar multimillonarios proyectos petroleros, firmas eléctricas y la mayor compañía de telefonía del país, el Gobierno de Venezuela hará lo mismo con las cementeras, alegando que debe combatir "la cartelización de precios" y garantizar el suministro.

El ministro de Industrias Básicas y Minería, Rodolfo Sanz, dijo que estas empresas realizan un proceso de "cartelización de los precios", es decir, que "se ponen de acuerdo para fijar el precio del cemento, trabajan muchas veces por debajo de su capacidad instalada para no impactar hacia abajo los precios del cemento".

Aseguró que las cementeras "exportan una gran cantidad de toneladas métricas que producen anualmente a todo el mundo y, en unos casos, desabastecen el mercado interno".

Cemex dijo desde México que no había sido notificada y pidió explicaciones.

Chávez afirmó que se realizará un avalúo de los activos para indemnizar a los actuales propietarios y que el Ejecutivo implementará un plan que modernizará las plantas.


La Cancillería mexicana anticipó que el gobierno del presidente Felipe Calderón hará todo lo que esté a su alcance para proteger los intereses legítimos de las empresas mexicanas en el exterior.

Suiza insistió en que Venezuela debe indemnizar a la empresa Holcim, número dos mundial del sector, pues desde 1994 mantiene con Venezuela un acuerdo de protección de inversiones extranjeras que prevé indemnizaciones de las empresas nacionalizadas.

A su vez, el Ministerio de Economía y Finanzas francés indicó que pediría explicaciones y se iba a cuidar de que el grupo Lafarge sea indemnizado, recordando que hay un acuerdo bilateral que entró en vigor el 15 de abril del 2004, que prevé que cualquier expropiación daría lugar a "una indemnización adecuada, cuyo monto es igual al valor real de las inversiones concernidas".

La tercera cementera del mundo y una de las principales empresas de materiales de construcción, la mexicana Cemex, pidió al Gobierno venezolano que le explique cuál es el alcance del anuncio de nacionalización del sector.

Cemex tiene casi el 50% de la producción venezolana, la francesa Lafarge y la suiza Holcim, cerca del 25% cada una.

Cemex se estableció en Venezuela en 1994, con una inversión de $ 300 millones, y cuenta con tres plantas con una capacidad anual de 4,6 millones de toneladas. También tiene 33 plantas de concreto, 13 centros de distribución terrestre y cuatro terminales marítimas.

Holcim tiene dos fábricas en Venezuela que producen tres millones de toneladas de cemento por año (1,5% de la producción total mundial del grupo). Está presente en Venezuela desde 1977, donde emplea a 774 trabajadores.

Lafarge no quiso reaccionar en un primer momento y se limitó a recordar que es el "número tres" en Venezuela, tras Cemex y Holcim, con una capacidad de producción de 1,6 millones de toneladas.

Gobierno venezolano decide nacionalizar Siderúrgica del Orinoco

Caracas, 9 abr, 2008 (PL) El vicepresidente de Venezuela, Ramón Carrizalez, anunció hoy la decisión del ejecutivo de nacionalizar la empresa Siderúrgica del Orinoco (SIDOR), localizada en el estado Bolívar y la mayor de su tipo en la región andina.

En declaraciones a la prensa, Carrizalez recordó que la medida se adoptó este miércoles tras un proceso de negociación realizado desde hace varios meses y en el cual la compañía se negó a reconocer los derechos de los trabajadores.

Por ello, indicó, el presidente Hugo Chávez emitió las instrucciones para informar sobre la posición del gobierno de nacionalizar la empresa al ser un área estratégica para el país.

En ese sentido, manifestó que se esperó un tiempo suficiente para llegar a un arreglo, lo cual fue imposible pues la corporación se aprovechó de las ventajas que le da el ejecutivo sin importar el bienestar de los obreros. Con ese paso el ministro de Industria Básica y Minería, Rodolfo Sanz, quedó encargado de las negociaciones para concretar la decisión del ejecutivo respecto a la compañía.

En el marco de los contactos, "sentimos una actitud arrogante y prepotente por parte de la empresa", expresó el vicepresidente.

Antes de la medida, el consorcio Ternium (perteneciente al grupo italo-argentino Techint) disponía del 60 por ciento de las acciones, con un 20 por ciento para el estado e igual cantidad en manos de trabajadores y jubilados de la empresa.

Dos decenas de instalaciones productivas y auxiliares integran la infraestructura de la compañía, la cual aporta una amplia cartera de surtidos donde destacan el acero, laminados en caliente y frió, hierro y tuberías.
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