CVG subsidiaries hit by power rationing

Exports of state-run steelmaker Siderúrgica del Orinoco (Sidor) tumbled 78 percent (File photo)

Basic Industries
Both power rationing and lower income severely hit the activities of basic industries in the Venezuelan southern region of Guayana in 2010.

The 2010 Annual Reports and Accounts of the Ministry of Basic Industries and Mining showed that steel production declined 42 percent, while aluminum production fell 39 percent. As a result of low industrial capacity, domestic and foreign sales plummeted.

The report added that Venezuela's production of steel amounted to 1.8 million tons in 2010, while in 2009 steel output stood at 3 million tons. Approximately 1.4 million tons out of the total were sold in the domestic market, a 18 percent decline compared to 2009, while 204,462 tons were exported, a 78 percent fall compared with the previous fiscal year.

The steel production capacity in the subsidiaries of the Venezuelan Guayana Corporation (CVG) is 5 million tons. However, CVG's steel production only accounted for 34 percent of such capacity in 2010.

Amidst power saving measures, Sidor restricted its installed capacity and began to increase production "between June and October, when it used 41 percent of its capacity."

Additionally, "the lack of inputs due to the shortage of funds as a result of declining revenues was another critical factor affecting production."