Venezuela, July 17: A veteran official of Venezuela's state-owned primary aluminum producer Alcasa said the company lowered its production target this year because of the lack of investment that forced workers to operate obsolete machinery and equipment.
Production director Emigdio Salas said the company expects to produce 170,000 tons of primary aluminum this year, down from the original target of 191,000 tons, and said it will enter a "very difficult period" unless there is a short-term investment.
Alcasa's annual production capacity is 210,000 tons, and last year's output reached 178,124 tons, a decrease of 5% from the previous year.
The decline in production was largely affected by technical factors, as the government’s $342 million in funding for technology upgrades was slower than expected. A production line worth approximately $30 million also needs immediate repair.
The company’s anode carbon plant fire reported in June increased the difficulty of production.
Salas said, “The current situation is that there are too many used machines, and it is difficult to maintain such a factory that lacks investment. Because of this, the company gradually loses its competitiveness.â€
"In the next few days or at the end of this month, Alcasa's problems will not be solved, and the company will be in a very difficult situation."
Venezuelan President Hugo Chavez plans to increase the production of domestic primary aluminum companies. By 2010, Alcasa and Venalum will increase the average annual production of 630,000 tons to 1 million tons.
Venalum is jointly controlled by the government and Japanese companies.
Salas said that although the president approved the investment a year ago, Alcasa has not seen any funds.
The government has not explained why the funds are not in place.
Alcasa hopes to increase production by building a fifth production line in the next few years, which will require an investment of $765 million.
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