April 9, 2008

Chavez orders nationalization of Venezuela’s cement industry

CARACAS, Venezuela – President Hugo Chavez has ordered the nationalization of Venezuela’s cement industry, saying the government cannot allow businesses to export materials needed to help tackle a domestic housing shortage.

Chavez said the affected cement companies, which include Mexico’s Cemex SAB, France’s Lafarge SA and Switzerland’s Holcim Ltd., will be paid fair compensation in the state takeover.

“We are going to prepare a plan to modernize these cement plants,” he said.

Chavez, who says he is leading Venezuela toward “21st-century socialism,” said the nationalization would take place in the “short term,” but did not provide specific dates.

Most of the cement market in the South American country is supplied by foreign-owned companies.

Cemex runs three plants in Venezuela that produce about 2.4 million tons annually. Holcim operates two plants, also with total capacity of 2.4 million tons. Lafarge has two plants that produce 1.5 million tons a year.

Prior to the announcement, Chavez had repeatedly expressed frustration with the high cost of construction materials and threatened to seize control of companies that fail to provide low-cost cement for the domestic market.

Last year, he said many of Venezuela’s cement factories prefer to sell their product abroad at higher prices and warned: “If the cement factories do not (sell in Venezuela), we will occupy them.”

Associated Press

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