Venezuela nationalises steel giant Ternium-Sidor

Caracas: Venezuelan President Hugo Chavez has signed a decree nationalising Venezuela's largest steel company, Luxembourg-based Ternium SA's subsidiary, Sidor, in which Argentina's Techint is the majority 60-per cent stakeholder.

Chavez had announced in April 2008 that he would proceed to nationalise the company subsequent to the breakdown of talks in union contracts. Ternium-Sidor has a workforce of around 12,000.

Venezuela is still discussing the price of Sidor with Ternium. Reports indicate that Venezuela's government has valued the company at $800 million, where as Chavez has said that parent Ternium is looking for a valuation between $3 - $4 billion.

In 2006, Chavez had nationalised the oil fields in the Orinoco basin, and recently nationalised cement companies that were managed by Mexico and France. Last year, Venezuela's largest telephone and electricity companies were also nationalised. Argentina`s Techint holds a 60 per cent stake in Sidor, a producer of 4.3 million tonnes of liquid steel.

The nationalisation law extends to ''certain Sidor subsidiaries and affiliated companies dealing with extraction and development'', said Chavez.

Addressing workers at the Ternium-Sidor steel plant at Ciudad Guyana, Chavez said that the nationalisation marked the beginning of a ''historic new era'', with Sidor now belonging ''neither to Chavez, Rodolfo Sanz, the management, or the Sidor workers'', adding that it now belonged to the Venezuelan people.

Chavez has set a deadline of 30 June for the transfer of all of the company's assets to the government, and appointed his industry and mining minister Rodolfo Sanz as the president of the nationalised company.

Chavez said that the Supreme Court approved nationalisation is in effect "a fundamental law to bring order to the entire steel industry'' including all activities from mining of ore to the production of steel.