Venezuelan President Establishes State Owned Basic Industries Co

The President of Venezuela, Hugo Chavez, established a National Company of Basic Industries with a decree issued on December 28, 2005.

The Ministry of Basic Industries and Mining (Mibam) will be the principal of the newly created company. The company was established in a move to boost local development of natural resources of Venezuela. The social capital of the company stands at 18 bln Venezuelan bolivars ($8.38m). Hugo Chavez has also issued decrees for the establishment of nine empresas de produccion social (EPS), or social production companies. All these companies will be managed and developed by the National Company of Basic Industries.

The EPS model is used by the Government to provide financial support for technical training in regions where workers have assumed control of manufacturing facilities. The government is reportedly studying several hundred businesses to determine their potential for expropriation and reorganisation along the lines of the EPS model.

The recently created EPSs will be active in the alumina laminates, seamless steel tubes, iron and steel sector, pulp and paper, cotton processing, mining, cement and raw materials processing sectors.