Chavez to Nationalize Cement Industry in Venezuela

April 4, 2008
Cement companies effected would be Lafarge, Cemex and Holcim

President Hugo Chavez has ordered the immediate nationalization of cement companies in Venezuela, which include Mexico's Cemex and France's Lafarge. "We are going to nationalize the cement industry," Chavez said in a cabinet meeting late on April 3, adding that affected companies would be compensated.

Lafarge and Cemex are the two major cement companies in Venezuela, followed by Switzerland's Holcim.

The declaration sparked immediate concern in Mexico, with the government seeking an explanation from Caracas. "The ministry of foreign affairs has got in touch with the Venezuelan government to gain more insight into the declaration of President Hugo Chavez," a statement said. It said the Venezuelan ambassador to Mexico City would be summoned, and added that the government wanted to protect the "interests" of Mexican firms operating in Venezuela.

Holcim, the world's second-biggest cement maker, said it was taking very seriously plans to nationalize the industry in Venezuela. "We take that very seriously but we stay calm because this is not the first time that (the Venezuelan president) announces that the sector is going to be nationalized. We have to wait and see what happens," a Holcim spokesman said.

Holcim has two plants in Venezuela with annual capacity of three million tons or 1.5% of the group's total, accounting for one percent of its global revenues.

Chavez had said: "We're going to make an assessment, we will pay what it cost these people and we will at the same time make a technological plan to modernize the cement plants while putting social power in the hands of the state."

Chavez, the outspoken leftist leader of Latin America's top oil producer, complained that the cement companies were not serving Venezuelan demand, preferring to export their production.

Venezuela nationalized oil fields in the Orinoco basin in 2006, forcing foreign oil companies to give Venezuela's state-run oil company PDVSA at least a 60% share in their operations there. France's Total accepted $834 million in compensation; Italy's ENI took $700 million, and Norway's Statoil $266 million. But ExxonMobil and ConocoPhillips, disputed the move and demanding World Bank-sponsored talks. ExxonMobil in January secured a court-ordered assets freeze on $12 billion in global assets of PDVSA in New York, London, the Netherlands and the Netherlands Antilles. A London judge lifted the freeze last month, and Venezuela said it would take the matter back to international arbitration.

Copyright Agence France-Presse, 2008

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