Cemex to seek arbitration over Venezuelan assets

Cemex says it will submit a complaint to the World Bank's Center for Settlement of Investment Disputes following the Venezuelan Government's seizure of its assets in the country. The company says it has been deprived of its rights under both national and international law by the expropriation that took place earlier this week as part of president Hugo Chavez's programme of nationalisation of key industries.

In a statement the company said, "Cemex believes the confiscation and subsequent start of the expropriation process is a flagrant violation of the Constitution, Law of Expropriation and other laws of Venezuela. Cemex also believes the Venezuelan Government's actions highlight a lack of respect for the principles of international law and the treaties relating to reciprocal protection of investments, which forbid the occupation of goods and depravation of rights without fair and effective compensation and without an expropriation procedure."

Cemex said it was offered compensation of US$ 650 million by the Venezuelan Government for assets including three Cement plants with a total capacity of 4.6 million tonnes per year. It said this undervalued the businesses and was not in line to compensation packages accepted by Lafarge and Holcim.

Its statement said," The offer presented to Cemex is lower, proportionally, than the ones offered to the European cement companies, considering value per ton of installed capacity and EBITA (profit) multiple."

The Venezuelan Government has not commented on Cemex's move to seek a settlement to the dispute through the World Bank's arbitration process.