Venezuela Venalum: Had Best Ever Mo In Dec Despite Strike

Monday January 6, 11:07 PM

An ongoing 36-day-old strike general strike "had us worried for a little bit," but never shut production, Bezzara told Dow Jones Newswires in a telephone interview. Production during the year was a record 436,000 tons, he said.

Bezzara said a severe shortage of natural gas, due to the strike that began Dec. 2, shut production briefly at Bauxilum, the country's only supplier of alumina, the main raw material in aluminum production.

But Venalum has a constant 30-day supply of alumina in storage, while its sister aluminum producer Alcasa has a 10-day supply and Bauxilum, itself, had a 15-day supply, he said.

Gas supplies were returned to minimal required levels a few days after Bauxilum shut down, after an agreement was reached between the government and dissident managers at PdVSA Gas, the natural gas arm of state oil monopoly Petroleos de Venezuela SA (E.PVZ).

PdVSA officials agreed to maintain minimal gas levels because of the damage a total shut down would inflict on heavy industries in the region, Bezzara said.

Venalum, for instance, would take up to two years to restart if it ever shut down completely, he said.

That's because the company is currently operating 905 production cells, and a restart would have to be done at a maximum rate of two per day, he said.

The aluminum producers will likely be the last to suffer if there is a complete gas shut down because they don't use as much gas as do some of the other industries in the region, Bezzara said.

Venalum needs only about 6 million cubic feet per day of gas, Alcasa needs about 5 million cfpd, while Bauxilum needs about 50 million cfpd. Steel producer Sidor needs about 200 million cfpd, he said.

Japan's Showa Denko holds 7% in CVG-Venalum, Kobe Steel Ltd. (J.KOB) and Sumitomo Chemical Co. Ltd. (J.SUC) each hold 4%, Mitsubishi Materials Corp. (J.MMT) holds 3%, and Mitsubishi Aluminum Co. and Marubeni Corp. (J.MRB) each have 1%.