Orinoco Steel Plant

Siderúrgica del Orinoco "Alfredo Maneiro" SIDOR C.A. or known as Sidor C.A., is a Venezuelan steel complex, inaugurated in July 1962 during the government of Raúl Leoni with the first casting of 200 MT, in Matanzas, which is one of the communities that make up Ciudad Guayana, for the production of steel with Direct Reduction technologies and Electric Arc Furnaces, with natural resources available in the Guayana region. This plant is one of the largest complexes of its type in the world. The industry was sold to private consortiums during the second government of Rafael Caldera because, according to reports from the Executive, it was generating losses for the State. The government of Hugo Chávez announced its renationalization in April 2008. The company has accumulated losses since 2011 and has (end of 2015) a negative equity of -23,518,719,152 Bs. It is located in the Guayana region.

History

The creation of Siderúrgica del Orinoco, C.A. It dates back to the years 1926 and 1947 with the discovery of iron ore deposits in the El Pao and Bolívar hills, respectively. Cerro Bolívar has an approximate height of 500 m, a length of 12 km and a width of 4 km and has reserves estimated at 500 million tons.

• 1926: The deposits of iron ore are discovered in the hill El Pao, Bolivar State.

• 1947: The deposits of iron ore are discovered in the Bolivar hill, Bolivar State.

• 1951: The Venezuelan Iron and Steel Institute, a private company that began preliminary studies for the installation of a steel industry in the Country, is constituted.

• 1953: The Venezuelan Government takes the decision to build a Siderurgical Plant in Guayana. The Office of Special Studies of the Presidency of the Republic is established and entrusted to it, among others, the priority of the Siderurgical Project.

• 1955: The Venezuelan Government subscribes to a contract with the company Innocenti, from Milan, Italy, for the construction of a steel plant with production capacity of 560 thousand tons of steel lyngotes. Those who brought piece by piece to assemble the Refinery, manufactured in Milan and brought by boat through the river Orinoco.

• 1957: The construction of the Siderúrgica plant in Matanzas, Ciudad Guayana begins.

• 1958: The Venezuelan Iron and Steel Institute is created, with the aim of promoting the installation and monitoring the construction of the steel plant.

• 1960: The plant's capacity is raised to 900 thousand tons. The Venezuelan Corporation of Guayana (CVG) is created, and it is assigned the functions of the Venezuelan Institute of Iron and Steel.

• 1961: The production of seamless tubes, with imported ingots, is started. Arrabio is produced in the Electrical Reduction Hornos.

• 1962: On July 9, the first steel cast is made in the oven No. 1 of the Siemens-Martin Acry.

• 1964: The state company CVG Siderúrgica del Orinoco C.A. (Sidor) is created, and the operation of the existing plant is entrusted to it.

• 1970: On October 3, the centrifugal tube plant was inaugurated, with capacity of 30,000 t/turne.

• 1971: On March 13, at the Palace of Miraflores, a contract is signed with a Belgian-German Consortium for the construction of the flat laminate plant, with an investment of 1,250 million Bolivars (Plan IV), for the production of thick sheets and hot coils.

• 1972: The capacity of Siemens-Martin kilns is increased to 1.2 million tons of liquid steel.

• 1973: The electrolytic tin and chrome line of the Plane Production Plant is opened. Obtaining the first Norven brand in Venezuela, for the bars (Cabillas) of Sidor.

Construction of Plan IV

• 1974: Operations are started on the Plant Products Plant. Enlargement of Sidor to raise its capacity to 4.8 million tons of steel (Plan IV).

• 1978: The Pellas Plan, and the first furnaces of Plan IV's electrical mills, enter into operation.

• 1979: Start of the Midrex Direct Reduction Plant, the Electrical Acrylic, the Continuous Cold of Palanquillas, and the Laminadores de Barras y Alambrón.

• 1980: The HyL Direct Reduction Plant and Cal Plant start operations.

• 1981: In full operation the expansion of the Plant Products Plant.

Industrial Reconversion

• 1989: A conversion process is applied in Sidor.

Privatisation

• 1993: On 15 September, the Privatization Act published in Official Gazette on 22 September was enacted.

• 1995: The Privatization Act in Venezuela enters into force.

• 1997: The Venezuelan government privatizes Sidor through public tendering that is won by the Amazonian Consortium, composed of Latin American companies led by Techint of Argentina. Of these actions, 60% were private property, 20% belonged to the workers and 20% to the Venezuelan State.

Financial Restructuring

• 2000: After a year of negotiations, Sidor signed the financial restructuring agreement on his debt with creditor banks and the Venezuelan State.

• 2001: Three new furnaces are opened in the Hood Acry and the Laminator Automation Project in Caliente is completed with an investment of more than $123 million.

• 2002: Direct Reduction Plant Production Record, Plant Acryyria, Alambron Train and various Plane Products installations, including the Laminator in Caliente, which exceeded the design capacity after 27 years. Also, the Siderúrgica established new brands in total billable production of Alambron and Laminated in Caliente.

• 2002: Historical export record: 2.3 million tons; and monthly export record: more than 200,000 tons.

• 2003: Five years of private management of Sidor are completed. The second financial restructuring agreement is signed, thus reducing Sidor’s debt from $1,563 million to $791 million. This agreement includes a private equity contribution of US$ 133.5 million and investments of more than US$ 300 million in the next five years, as well as an increase in state share of 30% to 40.3%.

• 2007: Nine years of private management of Sidor are completed. Historical record of Liquid Steel Production: 4.3 million tons.

Stateization

• 2008: On April 9, President Hugo Chávez decided to statize Sidor due to the long trade union conflict that paralyzed the company, for 15 months.

The National Government appoints Rodolfo Sanz, Minister of Basic Business, as President of the Board of Directors and Miguel Antonio Álvarez Cádiz as Executive Chairman of the Company.

• 2009: After the company's statization, it was reactivated, but 36% of its capacity (about 137 thousand tons of steel), leaving the market in basic inputs such as iron rods for housing construction. The result of the exercise is estimated to be loss by order of some $410 million.
• 2009: On December 22, China signed an agreement with Venezuela for 1000 million dollars in exchange for Ferrominera Orinoco was obliged to deliver 42.96 million tons of iron ore to Chinese steel company Wuhan Iron and Steel Corporation (Wisco) for eight years, this would impact on the decline in steel production in the country.

• 2010: This year the production of liquid steel was reduced by 41.4%, producing 1.8 million tons, the lowest level since 1978. One of the main causes of this fall was the energy crisis that Venezuela experienced that year.

• 2011: This year the production of liquid steel increases 36% compared to the previous year, reaching 2.46 million tons, but still being below the 4.3 million tons that occurred in 2007 under private administration.

• 2012: Steel production decreased, reaching 1.72 million tons, 63.7% of its annual modified production target of 2.7 million tons. This represents a production of 34 per cent of the capacity of the factor, and continues to below the 4.3 million tonnes that occurred under private administration in 2007.

• 2013: Steel production decreased, reaching 1.5 million tons, representing 31% of its production capacity.

• 2014: In November 2014, steel production was expected to decrease 13.3 per cent over the previous year, reaching 1.3 million tonnes produced, accounting for 28 per cent of its production capacity. José Luis Hernández, president of the Unified Union of Workers of the Siderúrgica Industry and its Similar (Sutiss) denounced that the situation is due to deviations of funds, lack of audits and follow-up and lack of spare parts and raw materials. In fact, only 1.04 million tons will be reached. This fall represents the sixth decline in production levels since 2007.

• 2015: Steel production increased slightly, reaching 1.07 million tons, representing 23% of its production capacity.

• 2016: Steel production decreased 71% from the previous year, reaching 0.31 million tons, representing less than 7% of its production capacity. Because of the energy crisis, production was totally paralyzed for several months, but even the maximum monthly production was below the average production of the previous year.

• 2018: Since mid-year Sidor paralysed its production, despite this he hired new managers

• 2019:
  • The Pellas plant is the only active plant in Sidor and its current production is 6.3% of its production capacity.
  • The economist Urbi Garay expressed about Sidor who was “A major source of foreign exchange, of employment in the Bolivar state, and of inputs for the national industry was destroyed”, today steel production is in zero

• 2020: After several months the production is paralyzed in July, the start of the production plants is achieved, with the supply of Oxygen, Nitrogen, Argon and Industrial Water, necessary in order to guarantee the production of liquid steel of about 1,350 tons per day of palanquillas. It is projected to produce for the days of December about 14,000 tons of liquid steel to the production of alambron to be used mainly by the mesh sector for the fence, pigs, nails, clothes hooks. 2020 was one of the most unproductive years in the history of the company. The total production of steel in 2020 was equivalent to one and a half day in 2007, when it reached the peak with a productive record in the hands of Iolo-argentina Techint.

• 2021: At the beginning of February the workers completely stopped the production in the mill of Palanquillas as a protest for the lack of payment, security equipment and for the lack of personal work. The Pellas area has continued to work.

• 2022: In October SIDOR has paralyzed the palanquilla plant two weeks by its workers, for attacking the personal safety of its workers, the reason is that the only furnace that works of four that it has, is using bad quality refractory brick, which the company has bought for the protection of the furnace and which explodes producing accidents. Annual production remained at 280,000 TM this represents only 5.6% of its installed capacity.

Annual production

The SIDOR plant began in 1955 with a production capacity of 560 thousand tons per year, by 1960 the production capacity was increased to 960 thousand tons per year and by 1974 the expansion of its production capacity reached 4.8 million MT per year driven by the economic boom in Venezuela and the need for internal consumption for the country's large works. National production during 2022 was 280 thousand tons.

* from 2008 starts the SIDOR statization

Structure

Geographical location

The steel plant is located in Matanzas, Guayana city, an area chosen for the steel industry on a 30-hectare plot of land, very close to the Caroní River for the availability of sufficient water for this type of industry.

Physical space

The plant has a constructed area of 25,000m², 12 thousand pillars 15m deep were used to stabilize the base because it is on a very soft ground on the river bed and on which the bases were set, its metal structure It is 47 meters. high and a production line of 270 meters. long by 70 meters. wide, it has five groups of reinforced concrete silos to deposit the material that will feed the ovens with a capacity of 2000 m³ of material, it has a main control room, a 50 meter high water tank was built to have a capacity of 3500 m³ of liquid, it has a 9-story building for the different administrative offices, design and maintenance. It has a network of underground drains both for heavy rains in the area and for wastewater from the manufacturing process.

It has a dock on the Orinoco River 300m long and 25m wide mounted on 26 pillars of 4.5m diameter, to support the weight of the material that is aligned along the river with five cranes and with a capacity to receive up to 2 ships of 10,000 Tm capacity on the exterior side and barges on the lateral side. It has 3,000 meters of conveyor belt that goes from the dock directly to the plant, with a transfer capacity of about 1,100 tons per hour. There is also a 60 km network of railway tracks to transport raw materials and finished products between the plant, dock and mine.

It has a physical space for the rolling section where the ingots from the steel mill are heated in 8 pairs of pit furnaces for the first phase of rolling. It also has a production plant for seamless tubes, a highly requested product for the oil industry and a drawing section for rods and wire with two lines for tinning the wire with zinc and machines for the manufacture of barbed wire.

It has two electrical substations, the first with a power of 275,000 kilo voltampere and the second with a power of 125,000 kilovoltampere and a thermoelectric plant to ensure the continuity of the energy of 8,000 kilovoltampere.

Type of production line

The production line was taken in a U shape for the assembly of four electric reduction furnaces with a capacity of 220 tons of smelting initially, which required 22,000 kilowatts for its operation.

Project of the José Ignacio Abreu De Lima National Steel Company

The preliminary project was presented and approved in 2006 to be executed by the Brazilian construction company Andrade Gutiérrez CA, contracted in 2008, for a value of 3,800 million dollars for the production of about 1,550 MT of special steel per year, in finished products: laminates, slabs, coils and thick plates for the construction and repair of ships, for the construction of storage tanks for petroleum products, pipes for the oil industry and others, to be completed in 2012. It will be located in the outside the city of Piar, Bolívar state, next to the Ferrominera iron concentration plant on a plot of land of about 64 hectares where earthworks and the process of bases and foundations for the infrastructure have been carried out.

Initially, 1.7 million was granted, through a bilateral agreement with the National Development Bank of Brazil, it would be complementary to the SIDOR “Alfredo Maneiro” steel company (whose production capacity is 4,000 mt per year of liquid steel). In November 2012, Mr. Pedro Olivieri, President of the Siderúrgica, expressed his sympathy before the National Assembly and pointed out that the progress of the work was 60%, with Ricardo Menéndez being Minister, with different opinions regarding the progress of the work. By 2014 it was 52% advanced but they were not completed, for that year they were paralyzed due to lack of cash flow. The acquisition of equipment in Germany and Brazil arrived in 2014 and there are rolling mills, overhead cranes, electrical transformers and others that are already on the construction site in warehouses. By 2014, progress was also being made in the construction of a water plant with the capacity to supply 1,200 cubic meters per hour as well as 19 km of water pipes (the steel industry consumes a lot of water) and 107 km of gas pipes., as well as electrical lines. In 2018, the former governor of the state of Bolívar, Jorge Carvajal Morales, expressed his annoyance over equipment that was in warehouses abroad and that had not been repatriated due to lack of payment of invoices and that was deteriorating.

According to International Transparency, this project fell within the Operation Lava Jato group that revealed a huge corruption scheme in Venezuela from Brazil, three are the works assigned to the Brazilian company "Andrade Gutiérrez" all unfinished

• • Shipyard in the state Sucre (18.81% advance of the work)
  • Siderúrgica José Ignacio Abreu De Lima in the Bolivar State (41.35% progress of the work)
  • Central thermoelectric phase II Antonio José de Sucre (30.0% progress of the work)