President Hugo Chávez has signed a decree formalising the nationalisation of Venezuela's largest steel maker.

Chávez says his government will transform Sidor into a socialist company by raising salaries and improving benefits for the steel maker's 4,500 employees.

The president addressed workers Monday on a visit to a steel plant.

He said the government plans to reduce Sidor's exports and increase steel supplies for domestic consumption. Sidor was previously controlled by a Luxembourg-based company called Ternium SA.

Chávez ordered the company's nationalisation last month, arguing that Ternium was exploiting its workers.

Venezuela's government plans to compensate Ternium for the takeover before June 30.