Mexican-Japanese consortium to participate in privatization of SIDOR

Siderúrgica Lázaro Cárdenas Las Truchas SA de CV (SICARTSA) of Mexico and Kobe Steel Ltd of Japan today signed an agreement in CAF headquarters in Caracas to form a consortium to participate jointly in the SIDOR privatization process.

SICARTSA – advised by CAF, ABN Amro and Rothchild – has been negotiating with Kobe Steel with a view to forming this association, after the two companies had completed the period of visits to the SIDOR data room.

This is the first consortium to be formalized among the companies registered to take part in the SIDOR privatization process. Under the agreement, Kobe Steel will contribute its technical capacity, while SICARTSA will be responsible for operations and management.

Kobe Steel is one of the largest Japanese steel companies, with annual sales of US$10 billion from its steel and aluminum rolling operations, construction, engineering and machinery manufacture. Its operations go beyond Japan through joint ventures with other international companies such as US Steel, Alcoa and Texas Instruments. In Venezuela, its industrial operations, which cover production of pellets and hot briquetted reduced iron, are located in Ciudad Guayana.

The Mexican steel company SICARTSA produces reinforcement bars and wire. It is a subsidiary of the Villacero Group, whose annual sales top US$1 billion, providing jobs for over 10,000 workers.

In the privatization process of the Mexican state companies, SICARTSA was awarded the Villacero Group in November 1991. Since that time the company has demonstrated sustained growth of production, which is projected to reach 1.4 million tons by the end of 1997. In 1994-95, SICARTSA provided assistance to SIDOR in the area of non-flat products.