The Venezuelan government has locked up control of more than 90 percent of the domestic cement industry with its nationalisation of one foreign-owned plant and pressured buyout of two others. In the most recent of a series of state take-overs of key foreign-controlled businesses, at midnight Monday.
Energy and Petroleum Minister Rafael Ramirez led workers and supporters to take symbolic control of the Mexican-owned Cemex plant in the eastern part of the country. The move, after talks on a buyout failed to conclude before a midnight Monday deadline, gave Venezuela control of Cemex''s operations in the country, including its 4.6 million tonnes a year capacity, roughly half of all cement production in Venezuela.
That, placed in the hands of the powerful state oil monopoly PDVSA, was added to the deals in which the government obtained a 89 percent controlling interest of French cement giant LaFarge''s local operations for 267 million dollars, and 85 percent of Swiss firm Holcim''s plant for 552 million dollars. "From this moment a decree of expropriation is in effect and the job stability of workers is guaranteed by the Venezuelan state," Ramirez announced.
"The interest of Venezuelans is placed above the interest of businesses." Cemex made no comment on the move beyond acknowledging to the Mexican Stock Exchange that, "According to a press release issued by Petroleos de Venezuela S.A. (PDVSA), PDVSA will proceed to take operational control of the plants of CEMEX Venezuela." Holcim, whose Venezuelan operations posted net sales of about 200 million dollars in 2007, said that in the negotiations, it had been "determined to safeguard the interests of Holcim and its local employees in accordance with the bilateral investment protection agreements in place between Switzerland and Venezuela."
LaFarge''s local chief Maxim Dolman said the deal would not mar "more than 100 years" of quality service in Venezuela. "We are working as a team with the Venezuelan government to follow the rising construction market in Venezuela," he said.
In April leftist President Hugo Chavez announced he would take control of the cement industry, as he has with the oil exploration and production operations of major foreign energy companies, and with foreign-controlled telecommunications businesses. The take-over of the cement business was justified by the government as necessary to boost housing construction inside the country.
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