Venezuela to nationalise cement

10 April 2008

Venezuelan president Hugo Chavez has announced the forcible nationalisation of the country's cement industry with immediate effect. He said in a televised speech that the country could no longer allow cement to be exported when it was needed to help curb Venezuela's housing shortage.

Venezuela will force cement companies to sell ownership stakes of at least 60% to the government as it seeks to gain control over "basic business," Energy and Oil Minister, Rafael Ramirez, said in a news report.

The three leading players in the Venezuelan cement sector are Cemex, Holcim and Lafarge, which have a total capacity of 8.5 million tonnes per year.

Cemex, the biggest supplier of cement in Venezuela, said the government plans to take at least a 60% stake along with operational and administrative control. Other options may also be considered, the company said in a statement.

"Cemex expresses its willingness to engage in a dialogue with the authorities to find a mutually satisfactory solution," the company added.

The statement said it is the government's intention to have negotiations with each of the cement companies.

"Working teams will be formed by each company to initiate conversations with the government," it added.

Cemex spokesman Jorge Perez said during the negotiation period Cemex will continue to operate normally and will look after the interests of its employees.

Speaking for Lafarge, Lucy Saint-Antonin told iC, "I can confirm that we have been informed of the Venezuelan government's intentions. We are open to starting discussions with the government, to find a solution which is in the interests of both parties and which protects our employees."

Mr Chavez first threatened to nationalise the cement industry last April. This followed in the wake of a 2006 law that forced foreign oil companies to hand over at least 60% of the Venezuelan interests to the state. Nationalisation of other basic industries, including electricity and gas, is also underway.

No-one from Holcim was available for comment at the time of going to press.

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