On Sunday, October 31, Venezuelan President Hugo Chavez ordered the nationalization of Sidetur, a subsidiary of local Caracas, Venezuela-based steel company Sivensa that produces mainly rebar, bar, beam, angle and flat products.
It was the latest takeover to be announced by Chavez, who in recent weeks has ordered several nationalizations, including a fertilizer plant, a motor lubricants maker and a major local farm supplies company.
Chavez has accused Sidetur of breaking Venezuela's price controls, commenting "you will see at what price we buy them, since they belong to the people, and at what price we sell the rods." Chavez said the company was charging too much and ordered its expropriation. However Monday, Sidetur protested being nationalized by President Chavez and denied it had ever broken the South American country's price controls.
"We are concerned there is a plan to mislead public opinion and justify the expropriation with the argument that Sidetur sells rebar at high prices," the company said in a statement.
The firm claimed that it had always complied strictly with official price regulations introduced in December 2006, despite inflation increasing by close to 100 percent since then.
"We urge the government to assess the impact of this move on infrastructure and construction plans at the national level, as well as on the workers and their families, and the suppliers and clients of the company," it said.
Sidetur employs 1,857 staff directly and another 5,000 indirectly, and has six plants in Venezuela, an annual production capacity of more than 835,000 metric tons (mt) and exports its products to 25 countries.