Venezuela/Iran plastics plant nears completion

28 July 2008 21:49  [Source: ICIS news]

CARACAS (ICIS news)--A joint Venezuelan/Iranian plastic injection plant is in the final stages of construction and should begin operations within the next three months, official sources said on Monday.

The El Furrial plant, in the eastern state of Monagas, is part of the Venezuelan government's initiative to spur a state-run plastics industry that would focus on meeting the nation's social needs, referred to locally as "business of social production," with the support of Iran.

"This plastic injection plant is part of a strategic alliance with Iran," said minister of communal economy Pedro Morejon, reported Venezuela's Bolivarian News Agency.

Venezuela has invested 14m bolivars ($6.5m) in the plant, while Iran is sending technology to support the project.

Government officials have said in the past that they hope to develop dozens of similar projects around the country to be supplied by state petrochemical producer Pequiven as the output of raw material grows.

Morejon said the new plant's raw materials are guaranteed by Pequiven, which could put further strain on Venezuela's private transformers.

The local plastics industry has been very vocal about the state producer's inability to fully supply their demand for plastic resins.

Indeed, Morejon's statements would suggest he's not entirely aware or at least publicly acknowledging the current deficit of resins.

"We used to export raw material and import finished products. Now we're going to process the raw material here and transform them into finished products," he said.

Pequiven has virtually ceased all exports and has been forced to depend on imports to supply the local plastics industry over at least the past year.

The El Furrial plant and others like it are intended to spur development in outlying regions and will give priority to supplying the state's social programs, focusing on education, health and construction needs, said Morejon.

El Furrial will have the initial capacity to produce 115,000 products a day, manufacturing goods such as desks for students, construction helmets and educational toys.

($1 = Bs2.15)

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