Following the announcement of a factory for Iranian tractor technology at the former Fanatracto site, it’s worthwhile to reflect on Venezuela’s experience in this sector. When Fanatracto, the National Tractor Factory, emerged in the late 70s, Venezuela was awash in petrodollars, and the government under Carlos Andrés Pérez was aggressively pushing for industrialization. The goal was to establish a protected national industry that could thrive even if imports were cheaper.
Fernando Coronil states in his book ‘El Estado mágico. Naturaleza, dinero y modernidad en Venezuela’ that Fanatracto was born from ‘the imperative to industrialize or perish,’ mandated by import substitution policies. Shareholders included CVG with 45%, multinational John Deere with 20%, Cavendes with 20%, and ACO, a consortium made up of Alcoa, Juan Domingo Mendoza, and other investors like Ricardo Degwitz, the Tamayo family, the Villasmil family, and Arturo Brillembourg, among others. The company was fully protected by the state, and CAP famously asserted during its inauguration in Ciudad Bolívar that the Venezuelan industry and agriculture would be ‘the solid foundation upon which the wellbeing of Venezuelans would rest,’ beyond oil exploitation. However, the project only lasted until the end of CAP’s first term.
When Luis Herrera took the presidency, his Minister of Development, Manuel Quijada, began to pile on unsustainable demands for Fanatracto, influenced by importers and farmers who wanted the factory shut down. Desperate measures were attempted by Fanatracto’s shareholders, including a request for a ten-million-bolívar loan from the Industrial Bank of Venezuela to cover urgent expenses, hoping the government would change its mind. But this did not happen, and some even laughed at the demise of Fanatracto, as noted by Coronil, without feeling any regret for the lost Venezuelan capital. Concepción Quijada, brother of the then Minister of Development, even remarked before the company closed that Fanatracto would never succeed. He also mentioned he was getting a license to import several hundred tractors and that they could not compete with him, as detailed by Coronil.
Now, with a government trying to reignite the dream of industrialization, we must ask: If the richest moment in Saudi Venezuela could not sustain such a project, will it be feasible with an oil production that has just begun to recover to normal levels? Will internal, external, and personal pressures allow for the creation of a new tractor factory under the current business network of Chavismo? Will the economic viability issues that plagued the original initiative not resurface? What guarantees exist that the revived Fanatracto, even under a different name, will succeed if there is a change in government?
The president of CVG, Francisco Rangel Gómez, appears captivated by the visit to the tractor factory in Iran: ‘They have impressive facilities, where they manage the entire production chain.’ He also noted that the Iranians will inspect the Fanatracto facilities to determine if they meet the requirements. This time, CVG will not deal with the American John Deere but with Iran Tractor Manufacturing. Who will the other shareholders be?