I can't think of a name
04-05-2008, 03:18 PM
http://www.latimes.com/business/la-fi-venez5apr05,1,3879299.story?track=rss
MEXICO CITY -- Venezuelan President Hugo Chavez is planning a government takeover of his country's cement industry, his latest effort to impose state control over key sectors of an economy battered by shortages and inflation.
Chavez made the declaration during a televised cabinet meeting late Thursday. He has long accused foreign cement companies of keeping prices high and supplies tight by exporting their products to other countries while Venezuela is suffering a housing shortage.
"We're going to nationalize the cement industry. Enough already!" Chavez said.
The action is a blow to Monterrey, Mexico-based Cemex, the largest producer in Venezuela. Industry companies LaFarge of France and Switzerland's Holcim Ltd. would also be affected.
Chavez's government said it soon would begin compensation talks with the firms. But Mexico's Finance Minister Agustin Carstens on Friday condemned Venezuela's move against one of Mexico's largest and most successful multinational companies.
"Certainly it's an inadequate action, an action that doesn't respect the property and the rights of Mexicans," Carstens said.
Cemex's U.S.-traded shares fell $1.16, or 4.2%, to $26.32 on fears that the company might not be adequately compensated for its Venezuelan assets.
The pending nationalization extends a spate of takeovers initiated by Chavez to redistribute wealth to the poor. His government has doled out land, slapped price controls on all manner of consumer goods, formed worker cooperatives and wrested control of private industries deemed strategic to the nation.
Since last year, Chavez has forced foreign oil companies to cede control of major oil fields, renationalized the telephone company CANTV and expropriated the assets of the electricity sector. Meanwhile, he has funneled billions in oil revenue to social programs.
Supporters credit Chavez with reducing poverty and boosting health and literacy in the South American nation of 26 million. Critics say his economic meddling has fueled inflation and created shortages of basic goods such as meat, milk and sugar.
Chavez, in turn, has blamed speculators and unscrupulous business owners for creating artificial shortages to drive up prices. The president in recent months had singled out cement makers for particular criticism.
Cemex controls about half the market in Venezuela. It operates three plants with a capacity of 4.6 million metric tons per year. Those operations employ 3,000 workers and generated about $400 million in sales last year, or about 2% of the company's 2007 revenue, according to Cemex spokesman Jorge Perez Aguirre.
Perez said that Venezuela's government has not notified Cemex of any nationalization action, and that the company has requested a meeting with officials to clarify the situation. He would not comment on the company's pricing or export policies.
Holcim and LaFarge each operate two plants in Venezuela with a total capacity of about 4.5 million metric tons. Some observers are dubious that government officials will be able to manage the cement industry more efficiently than the private sector has done.
Critics blame the Chavez administration for woes at the state-owned oil company Petroleos de Venezuela. Known as PDVSA, the firm has struggled to maintain production since 2003, when Chavez fired thousands of oil workers and executives after a strike.
"They are doing such a terrible job managing the nation's most important company, PDVSA, that it's hard to imagine they're really going to have the skill, the manpower and the knowledge to do much with [cement] companies," said Peter Hakim, president of the Inter-American Dialogue, a Latin America think tank based in Washington. "This is rather a cockeyed economic proposition."
Funny part is that there were some Mexican Marxists who got killed when Columbia hit that FARC camp in Ecuador.
MEXICO CITY -- Venezuelan President Hugo Chavez is planning a government takeover of his country's cement industry, his latest effort to impose state control over key sectors of an economy battered by shortages and inflation.
Chavez made the declaration during a televised cabinet meeting late Thursday. He has long accused foreign cement companies of keeping prices high and supplies tight by exporting their products to other countries while Venezuela is suffering a housing shortage.
"We're going to nationalize the cement industry. Enough already!" Chavez said.
The action is a blow to Monterrey, Mexico-based Cemex, the largest producer in Venezuela. Industry companies LaFarge of France and Switzerland's Holcim Ltd. would also be affected.
Chavez's government said it soon would begin compensation talks with the firms. But Mexico's Finance Minister Agustin Carstens on Friday condemned Venezuela's move against one of Mexico's largest and most successful multinational companies.
"Certainly it's an inadequate action, an action that doesn't respect the property and the rights of Mexicans," Carstens said.
Cemex's U.S.-traded shares fell $1.16, or 4.2%, to $26.32 on fears that the company might not be adequately compensated for its Venezuelan assets.
The pending nationalization extends a spate of takeovers initiated by Chavez to redistribute wealth to the poor. His government has doled out land, slapped price controls on all manner of consumer goods, formed worker cooperatives and wrested control of private industries deemed strategic to the nation.
Since last year, Chavez has forced foreign oil companies to cede control of major oil fields, renationalized the telephone company CANTV and expropriated the assets of the electricity sector. Meanwhile, he has funneled billions in oil revenue to social programs.
Supporters credit Chavez with reducing poverty and boosting health and literacy in the South American nation of 26 million. Critics say his economic meddling has fueled inflation and created shortages of basic goods such as meat, milk and sugar.
Chavez, in turn, has blamed speculators and unscrupulous business owners for creating artificial shortages to drive up prices. The president in recent months had singled out cement makers for particular criticism.
Cemex controls about half the market in Venezuela. It operates three plants with a capacity of 4.6 million metric tons per year. Those operations employ 3,000 workers and generated about $400 million in sales last year, or about 2% of the company's 2007 revenue, according to Cemex spokesman Jorge Perez Aguirre.
Perez said that Venezuela's government has not notified Cemex of any nationalization action, and that the company has requested a meeting with officials to clarify the situation. He would not comment on the company's pricing or export policies.
Holcim and LaFarge each operate two plants in Venezuela with a total capacity of about 4.5 million metric tons. Some observers are dubious that government officials will be able to manage the cement industry more efficiently than the private sector has done.
Critics blame the Chavez administration for woes at the state-owned oil company Petroleos de Venezuela. Known as PDVSA, the firm has struggled to maintain production since 2003, when Chavez fired thousands of oil workers and executives after a strike.
"They are doing such a terrible job managing the nation's most important company, PDVSA, that it's hard to imagine they're really going to have the skill, the manpower and the knowledge to do much with [cement] companies," said Peter Hakim, president of the Inter-American Dialogue, a Latin America think tank based in Washington. "This is rather a cockeyed economic proposition."
Funny part is that there were some Mexican Marxists who got killed when Columbia hit that FARC camp in Ecuador.