As a result of Ternium Sidor's cooperation with the Venezuelan government to reach an agreement to change what Venezuela's President Hugo Chavez called "unscrupulous business practices"; Venezuela's mining minister announced Friday that Venezuela no longer has any plans to nationalize Sidor.
After negotiating with Venezuela's Ministry of Basic Industries and Mining (MIBAM), Sidor has agreed to lower its steel product prices for Venezuela's home market and invest nearly US$500 million to create more production line and jobs. On Friday, Mining Minister Jose Khan told reporters that the government was satisfied that Sidor would provide enough steel for its domestic market, at or below international prices.
Sidor will resume talks with MIBAM next week. In mid-June, MIBAM and Ternium Sidor announced their tentative agreement, and since then the two parties have been working to refine the specifics of the agreement. Experts expect a final agreement to be reached, but some have voiced skepticism as to whether President Chavez will abide by its terms in the long run.
In May, Venezuela's President Hugo Chavez had threatened to nationalize Sidor if it did not focus on producing steel for its domestic market rather than for foreign markets, demanding that the company also lower prices for Venezuelan customers.
Sidor's parent company, Ternium SA, is controlled by the conglomerate Techint Group of Argentina. Many had speculated that Sidor's Argentine-owned parent company would ultimately prevent Mr. Chavez from nationalizing Sidor. Sidor was privatized in 1997, with Ternium holding a controlling 59.73 percent share in the company. The Venezuelan state controls 20.36 percent of Sidor through state heavy industry holding company CVG.