The decision was announced by basic industries and mining minister and CVG president Rodolfo Sanz after he paid a visit to the plant, according to the spokesperson.

"The decision is not up for discussion considering that the labor conditions in those areas are sub-human and we are going to close them very soon," Sanz was quoted as saying in an Alcasa statement.

Line 1 will be closed halfway through the year and line 2 by end-2008.

The spokesperson said that employees working on obsolete lines will be relocated to lines 3 and 4 and to Alcasa's rolling plant.

Halting operations on lines 1 and 2 will only cut the company's total output by 20% since lines 3 and 4 have a combined capacity of nearly 168,000t/y. Alcasa's capacity with all four lines comes to 210,000t/y.

LINE 5

In regards to construction of Alcasa's production line 5, the project's future is uncertain. Since "there have been no investments to upgrade lines 1 and 2, I don't think there are any plans to invest in a new line," according to the spokesperson.

Line 5 would boost the company's output to 210,000t/y and take nearly three years to build at an estimated cost of US$710mn.

The company churned out 180,086t in 2007. Sales came to 175,644t including 110,383t to the domestic market and 65,261t for export.

Alcasa is located in the eastern Venezuelan city of Puerto Ordaz. It is 92% owned by state heavy industry holding company CVG and the remaining 8% is in the hands of US-based Alcoa (NYSE: AA).

Harvey Beltrán
Business News Americas