"Chavez Takes Over Venezuelan Iron, Steel Producers (Update4)
May 22 (Bloomberg) -- Venezuelan President Hugo Chavez announced the government will take over the hot-briquetted iron industry and other metal companies, increasing its control over the nation’s mineral-wealth industries.
Chavez, during a meeting with union workers from affiliates controlled by the state-run Corp. Venezolana de Guayana, said late yesterday that the government will seize companies including Matesi, Tavsa, Orinoco Iron, Comsigua and Ceramica Carabobo CA.
Venezuela last year seized the country’s largest steelmaker from Luxembourg-based Ternium SA and has taken majority control of oil, utilities and telecommunications industries. Chavez is seeking control of the metals industry as aluminum and bauxite companies buckle under low international prices.
“These companies will be nationalized to create a single industrial complex,” Chavez said yesterday on state television. “There’s nothing to discuss. We should have done this a long time ago.”
The companies would be brought under the same management and included in plans to build an industrial complex to refine and process raw materials into finished products in a bid to reduce expensive imports, Chavez said. No details on timing were given by the president.
On May 7, the Venezuelan government agreed to pay Ternium $1.97 billion for its 60 percent stake in the Sidor steel mill after months of negotiation over compensation.
Matesi, a venture between Luxembourg-based steel-pipe maker Tenaris SA and Venezula’s Sidor, according to its Web site, produces 1.5 million metric tons a year of hot-briquetted iron products. Hot-briquetted iron is a form of compacted iron and is used to make steel in blast furnaces.
Tubos de Acero de Venezuela SA also known as Tavsa, is another Tenaris-owned company and Venezuela’s only maker of seamless steel pipes for the oil industry. The company produces 80,000 tons a year and represents 2 percent of Tenaris’ global seamless capacity.
Tenaris said today Venezuela is trying to nationalize the company’s majority stakes in Tavsa, Materiales Siderurgicos SA, known as Matesi, and its minority interest in the Complejo Siderurgico de Guayana CA, or Comsigua.
No details have been provided about the “expropriation process,” Tenaris said today in a statement.
Tenaris added 20 cents, or 0.7 percent, to $29.05 today in New York Stock Exchange composite trading.
Japan’s Kobe Steel Ltd., which owns a 21 percent stake in Comsigua, hasn’t been contacted on the issue, said spokesman Gary Tsuchida. “Kobe Steel is unable to comment on this recent event,” he said today. Comsigua produces hot briquetted iron. Kobe is the largest shareholder of the company.
Orinoco Iron SCS can make 2.2 million tons a year and is the largest hot-briquette iron producer in the Americas, according to its Web site. It and Venezolana de Prereducidos Caroni CA, or Venprecar, will both be taken over, Chavez said.
International Briquettes Holding and its 48 percent owner, Venezuelan steel producer Siderurgica Venezolana SACA, or Sivensa, said in statements with the Caracas stock Exchange that Orinoco Iron and Venprecar were units of their companies.
“As soon as details related to the execution of these measures are made known, we will make them public,” the companies said.
Ceramica Carabobo, which is listed on the Caracas stock exchange, produces and markets ceramic tiles, glazed bricks and heat-resistant tiles.
Venezuela, the largest oil exporter in Latin America, is seeking to boost production of minerals and metals after the plunge in oil prices reduced government revenue more than 50 percent this year.
Since winning a referendum in February that allows Chavez to run for re-election indefinitely, he has seized a rice plant from U.S. foodmaker Cargill Inc. He also nationalized oilfield service facilities such as service barges and gas and steam- injection systems under a new law passed two weeks ago.
The government has published decrees taking facilities from 74 companies. Tulsa-based Williams Cos., which wasn’t named in the decrees, lost control of three gas compression and injection facilities to state oil company Petroleos de Venezuela SA.