MercoPress. South Atlantic News Agency

Chavez threatens to expropriate Argentine company

President Hugo Chávez threatened to expropriate Venezuela's largest steel maker, which is owned by an Argentine group, due to what he said are the soon-to-be-nationalized company's excessive compensation demands.

Chávez said he could not help but laugh when he heard that Sidor's parent company, Luxembourg-based Ternium SA, is asking for at least 4 billion dollars in compensation for its 60% stake in Sidor. "I'm not going to pay 4 billion dollars for that company" Chávez said on radio and television programs. "If they don't want to reach an agreement with us, I'll sign an expropriation decree. I'll take immediate control over the company". Apparently Chavez estimates the Ternium share in Sidor in 800 million US dollars. Chávez ordered the nationalization of Sidor earlier this month, after months of tense negotiations between the firm and workers, who are demanding better salaries and benefits. Ternium SA is controlled by Argentine-Italian conglomerate Techint Group. Ternium currently owns 60% of Sidor, while the Venezuelan government holds 20%. The remainder is in the hands of current and former employees. The Kirchner administration on request from Techint talked to Chavez on more than an occasion to help find a way out to the Sidor conflict, but time (and influence) seems to have run out. Techint has many public work contracts with the Argentine government and its CEO Paolo Rocco is supportive of the Kirchner's policy of propping local industry. Sidor, whose formal name is Siderúrgica del Orinoco, was privatized in 1998. The conglomerate produces about 85% of the 5 million metric tons of steel produced annually in Venezuela, according to the Belgium-based International Iron and Steel Institute. The nationalization of key industries has been a centerpiece of Chávez's agenda. The government seized majority control last year of joint oil ventures previously controlled by some of the world's top oil companies, along with the country's largest telecommunications and electricity companies. Chávez also announced plans earlier this month to nationalize major cement companies. His government is currently holding talks with Mexico's Cemex SAB, France's Lafarge SA and Switzerland's Holcim Ltd. Chávez has said the companies will be allowed to stay on as minority partners.