Venezuelan Government Sells Bank and Approves Joint Venture To Build Steel Mill; Multinational...

CARACAS, Venezuela--(BUSINESS WIRE)--Dec. 14, 1995--Venezuela, continuing to rebound from the 1994 banking crisis, received an economic boost recently when the government sold its 80% share in Banco Guayana to Consorcio Inversiones Investock CA for $6.63 million. Banco Guayana was founded in 1955

Ferrominera de Orinoco was granted permission by the government to enter into a joint venture with South Korea's Dongkuk and Japan's Kobe Steel to build a steel plant in Venezuela. The total investment of the joint venture is $626 million. The companies expect to produce over one million tonnes of reduced iron per year in the new plant.

In other investment announcements, Coca Cola, Inc. and Comcast International, Inc. revealed plans to invest $400 million in Venezuelan operations.

Coca Cola will invest $200 million in Venezuela over the next two years. The funds will be used to modernize six bottling plants recently acquired from its former franchises and its largest plant, located in Marachibo. Coca Cola also plans to construct a modern bottling megaplant by 1997.

"We are confident about Venezuela and we are sure that a big potential exists for Coca Cola," said Coca Cola de Venezuela president John Beal.

Comcast International also announced plans to invest $200 million in Venezuela. The money will be used for transmission of a new cable channel in Caracas. Cabletel, Comcast's Venezuelan subsidiary, said that the ultimate objective of the investment is to expand service to the rest of the country.

In other funding news, increased investment in the oil sector is expected following a three day conference organized by Petroleos de Venezuela (PDVSA). Approximately 350 international oil company executives and technicians participated.

The conference was called to cover a range of topics associated with Venezuela's decision to open its vast oil reserves to private investment. Bidding on 10 oil exploration blocks is slated to begin in January 1996.

Two significant joint ventures with Maraven, a subsidiary of PDVSA, have been announced. First, Mobil and Unocal are joining with Maraven to invest $425 million to build a new refinery in Cardon that will produce 10,000 barrels of super-refined lubricants a day. Second, Maraven, Total, Marubeni and Itochu have announced a plan to invest up to $3.8 billion to develop petroleum reserves in the Orinoco Belt. The plan calls for the construction of a 150,000 barrel a day heavy oil upgrading facility.

Other companies announcing investment in Venezuela include:

--Polygram Records, a Dutch multinational corporation,

purchased Rodven Records for $57 million. The purchase will

allow Polygram to increase its market share in Latin America

from 13.6% to 16%.

--Penzoil Products Co. purchased 33% of Acientes y Solventes

Venezolanos (Vassa) for $6 million. Vassa was formed in

1992 as a joint venture between PDVSA and the private firm

Puramin, S.A. The three partners have also agreed to invest

$42 million in a plant in the state of Falcon to manufacture

specialty products produced from oil refinery residues.

--Unilever's Venezuelan subsidiary, Tio Rico, opened a new ice

cream plant in Carobobo. The plant will allow the company

to capture local market share and provide zero tariff access

to adjoining Andean markets.

--Stone Container Corp, together with the Venezuelan firm

Onofre Group, Ltd., invested $76.5 million for 51.7% of

Venepal, Venezuela's pulp and paper manufacturer.

--Cargill announced additional investments of $58 million in

Venezuela. "Venezuela's controls do let low cost

manufacturers be profitable," said Roland Lahner, company

president and general manager.

--U.S. Steel announced the purchase of BPCA, a seamless steel

producing company. BPCA is a leading supplier to PDVSA.

--Mobil announced the purchase of 50 % of C.A. Nacional de

Gracas Lubricante (CANGL), a private lubricant plants

operator. CANGL will blend Mobil and Venoco branded

products for sale in Venezuela and export markets. Travis

L. Couch, Mobil's general manager in Venezuela, said, "Mobil

thinks Venezuela is a country with lots of opportunities."

CONTACT: Seigenthaler P.R., Nashville, Tenn.

Tom Seigenthaler, 615/327-7999