Venezuela's President Hugo Chávez announced he will loan 50mn bolívares (US$23mn) to reactivate operations at state aluminum wheel company Rialca, according to a government statement.
"The plant is paralyzed but the machinery is in operating condition and now that the president has contributed the resources, we can launch the plant within 15-20 days," the company's union vigilance officer Carlos Blanco told BNamericas.
In the meantime, Rialca's new board is expected to purchase input materials, contact providers and oversee all of the general logistics involved in normal operations.
"The idea is to start by transforming aluminum in the furnaces which will allow us to process 3,000t/m," Blanco said, adding that state aluminum reducer Alcasa will provide the aluminum.
Initially the plant will produce 10,000 wheels each week, all for the local market.
"But the plant has capacity to produce 30,000 wheels a week, which means 1.5mn each year," Blanco said.
In the statement, Chávez said that Rialca's production as a state company must supply the downstream needs of the government itself.
"These resources are a loan. It isn't a gift. This is a loan that the republic is going to give the company and you must be held responsible for every last cent," Chávez said.
The Rialca plant, with two 25t furnaces and aluminum processing capacity for 16,000t/y, is located in Carabobo state.
The Venezuelan government expropriated the Rualca plant from US aluminum producer Alcoa in June and changed its name to Rialca after the previous management decided to halt operations due to alleged losses and inadequate technology.
Alcoa International controlled 41% of Rualca, while state heavy industry holding CVG had 23%, Grupo Rimcar owned 23% and General Motors 13%.
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