Exploring State-anchored District:
The Case of Iron and Steel Industry in Ciudad Guayana, Venezuela
A Research Paper presented by:
Luis Enrique Vargas Osorio
(Venezuela)
in partial fulfillment of the requirements for obtaining the degree of
MASTERS OF ARTS IN DEVELOPMENT STUDIES
Specialization:
Local Development Strategies
(LDS)
Members of the examining committee:
Dr. Peter Knorringa (Supervisor)
Dr. Bert Helmsing (Second Reader)
The Hague, The Netherlands
November, 2011
Disclaimer:
This document represents part of the author’s study programme while at the Institute of Social Studies. The views stated therein are those of the author and not necessarily those of the Institute.
Inquiries:
Postal address:
Institute of Social Studies
P.O. Box 29776
2502 LT The Hague
The Netherlands
Location:
Kortenaerkade 12
2518 AX The Hague
The Netherlands
Telephone: +31 70 426 0460
Fax: +31 70 426 0799
Acknowledgements
I would like to thank my Supervisor, Dr Peter Knorringa for giving me helpful advice, guidance, comments and inputs as well as for his patience. I would like to thank my Second Reader, Dr Bert Helmsing for his valuable comments and inputs.
I am grateful to all LDS staff for their inputs and support; and to my classmates for their comments and advice.
I am grateful to MIBAM staff Mr Francisco Bosque and CVG staff Mr Luis Piña for providing me useful information and their help during my fieldwork. My special thanks go to Firms’ staff and Municipality of Caroní staff with co-operation makes it possible to undertake this research.
I am grateful to Banco Central de Venezuela for giving me support to undertake this academic endeavour.
Last but not the least, I am grateful to my wife Orleny and my daughters María José and Mariana for their support and understanding during my studies.
Contents
Exploring State-anchored District: 1
List of Tables 6
List of Figures 6
List of Acronyms 7
Abstract 8
Chapter 1 Introduction 1
1.1Background 1
1.2 Indication of problem area 4
1.3 Research objectives 5
1.4 Research questions 5
1.5 Methodology 5
1.6 Scope and limitations 7
1.7 Structure of the paper 7
Chapter 2 Conceptual and Analytical Framework 9
2.1 Introduction 9
2.2 Industrial districts and clusters 9
2.2.1 Typology of industrial districts 10
2.2.2 Inter-firm co-operation 11
2.2.3 Role of the state 13
2.2.4 Firm size 13
2.2.5 Local and non-local embeddedness 14
2.3 Ownership structure 14
2.4 Analytical framework 15
Chapter 3 Exploring Inter-firm Interactions 17
3.1 Introduction 17
3.2 Mining 17
3.3 Pelletizing 20
3.4 Briquetting sector 20
3.5 Steel-making sector 23
3.6 Conclusion 25
Chapter 4 Exploring State-anchored District 27
4.1 Introduction 27
4.2 Conceptualizing Ciudad Guayana’s I&S industry 27
4.3 Mapping out Ciudad Guayana’s I&S industry 32
4.4 Conclusion 37
Chapter 5 Ownership Structure and Other Factors 39
5.1 Introduction 39
5.2 Changes in inter-firm interactions due to ownership structure 39
5.2.1 Mining 39
5.2.2 Briquetting sector 41
5.2.3 Steel-making sector 46
5.3 Changes in inter-firm interactions due to other factors 51
5.4 Conclusion 54
Chapter 6 Conclusions 56
Appendices 59
References 62
List of Tables
Figure 2.1 Analytical Framework 16
Figure 3.1 I&S industry chain of production 2011 (Million tonnes) 18
Figure 4.1 Mapping out state ownership 33
Figure 4.2 Mapping out private ownership 35
Figure 4.3 Mapping out state ownership and workers’ self-management 36
Figure 5.1 Destiny of iron ore production in Venezuela 1968-2010 40
Figure 5.2 Photo of Palua Port 42
Figure 5.3 Hot briquetted iron production in the district 1991-2010 44
Figure 5.4 Destiny of steel production in Venezuela 1968-2010 48
Figure 5.5 SIDOR’s labour and steel production 1990-2010 50
List of Acronyms
BRIQVEN: Briquetera de Venezuela, SA; Venezuelan Briquette, SA
CASIMA: Siderúrgica del Turbio, SA - Planta Casima; Casima Plant
COMSIGUA: Complejo Siderúrgico de Guayana, CA; Guayana Steel Complex, CA
CVG: Corporación Venezolana de Guayana; Guayana’s Venezuelan Corporation
FMO: CVG Ferrominera del Orinoco, CA; Orinoco Iron-mining, CA
I&S: Iron and steel
MATESI: Materiales Siderúrgicos, SA; Steel Materials, SA
MIBAM: Ministerio del Poder Popular para las Industrias Básicas y
Minería; Ministry of Popular Power for Basic Industry and Mining
O.IRON: Orinoco Iron, CA; Orinoco Iron, CA
OPCO: Operaciones al Sur del Orinoco; Orinoco South Operations
RYP: EBS Rieles y Perfiles, CA; Rails and Structures, CA
SIDETUR: Siderúrgica del Turbio, SA; Turbio Steel, SA
SIDOR: Siderúrgica del Orinoco Alfredo Maneiro, CA; Orinoco Steel Alfredo Maneiro, CA
SIZUCA: Siderúrgica Zuliana, CA; Zulian Steel, CA
SNAC: EBS Siderúrgica Nacional, CA; National Steel, CA
TSC: EBS Tubos sin Costura, CA; Seamless Tubes, CA
VENPRECAR: Venezolana de Prerreducidos Caroní, CA; Venezuelan Prereduction Caroni, CA
Abstract
Industrial districts and their developmental features have been of the interest of many scholars. Most of the literature refers to the traditional Marshallian or Italianate district where inter-firm negotiation with co-operation is assessed within a production system characterized by a geographical and sectorial concentration of private- small and medium enterprises (SMEs). Such production systems are less likely to observe in developing countries where can play an important role in promoting and sustaining industrial districts. This academic endeavour claims that ownership structure matters for industrial district analysis. The findings suggest that under state ownership, the state tends to induce initial competitive advantages whereas under private ownership tends to emerge voluntary co-operation.
Relevance to Development Studies
For developing countries it is worth to explore different types of clustering initiatives. The case of Ciudad Guayana’s I&S industry in Ciudad Guayana offers a great opportunity to explore inter-firm interaction patterns in state-anchored districts which have not been sufficiently researched. Additionally, this research attempts to contribute to scholar knowledge by bringing the issue of ownership structure into the debate of industrial districts.
Keywords
State-anchored district/typology of industrial districts/ownership structure/ iron and steel industry/Ciudad Guayana/Venezuela
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