Chavez to force steelmaker to supply Venezuela

Caracas, May 6: President Hugo Chavez said he would issue a decree forcing Venezuela's largest steelmaker to supply the local market, two days after he threatened to nationalize the foreign-owned company.

Chavez, who has taken over utilities and oilfields this year in a drive to turn the OPEC country into a socialist state, said he would tell the company, Sidor-Ternium, his plan at an emergency meeting with its top shareholder from Argentina next week.

''If you do not agree, give me it, I'll grab the company, I'll pay whatever it costs, I am not going to rob you,'' Chavez said at an event to form a single political party from the dozens of groups that support him.

The man who calls Cuban leader Fidel Castro his mentor said he would pass the law for Sidor using powers Congress gave him to rule by decree this year.

Chavez complained that the company, which is majority-owned by Latin America's largest steel-making group, Ternium, mainly exports its steel, leaving Venezuelans to import the product from as far away as China.

Venezuela's exchange controls prompt some companies to put a priority on selling products abroad to ensure they are paid in a foreign currency rather than the local bolivar, which trades on the black market at almost half its official rate.

Chavez, who calls capitalism an evil, said the company was violating the terms of a deal struck with a previous government when it was privatized.

''Before exporting a single ton abroad, first you have to guarantee me that all the (Venezuelan) companies are supplied,'' Chavez said today. ''I won't put up with it any more. Enough of talking.'' Chavez, who has mainly targeted US and European companies with his takeovers, said on Thursday he was reluctant to nationalize Ternium-Sidor because its main investors were Latin American. Still, the parent company's share price fell to an almost two-month low immediately after his statement on Thursday.

Reuters>