GUANTA: Venezuela seized foreign-owned cement plants yesterday, a show of strength as President Hugo Chavez moves forward with a plan to make South America’s top oil exporter a socialist society.
To the cheers from workers gathered at the gates, Venezuelan government officials backed by National Guard troops took control of installations belonging to Mexican giant Cemex on the dot of midnight after failing to reach a deal in cement nationalization talks.
Chavez, determined to build a state-dominated economy in Venezuela, has already taken oil and telecommunications companies from private hands and is buying a large Spanish-owned bank and a steel company.
Despite losing a referendum last year that would have given him wider scope to remake the economy, the former paratrooper last month used decree powers to pass a package of laws giving the state greater powers to intervene in sectors such as food. “We respect private interests, but no private interest can be above the interests of the people,” said Energy Minister Rafael Ramirez, charged with overseeing the takeover, before dancing, red shirt-clad supporters.
At Cemex’s main Venezuelan plant in Pertigalete on the Caribbean coast, government supporters sang the national anthem and waved the country’s yellow, blue and red flag.
State television showed images from another plant of supporters holding up the flag of Venezuela’s communist party.
“Their time is up and they move into the hands’ of the state,” Chavez said at a political rally late on Monday. “These are all steps toward socialism.”
As part of the cement takeover, Venezuela struck deals to buy majority shares in the local operations of European cement makers Holcim and Lafarge, following a pattern of usually compensating takeover targets well.
The government said it paid $552 million for an 85 percent stake in Switzerland’s Holcim and $267 million for 89 percent of the shares in France’s Lafarge. But Venezuela said Cemex was asking for too much.
Oil Minister Rafael Ramirez said Venezuela would pay Cemex considerably less than the $1.3 billion it had sought for its local plants in compensation talks. Cemex’s position is weakened by the expropriation.
Shares of Cemex on the Mexico stock exchange fell 3.44 percent on the news.
Chavez wants the cement companies, as well as a major steel plant he is buying from an Argentine group, to help meet the home-building and infrastructure goals his administration has struggled with. The firebrand leader has won the backing of the nation’s poor majority through oil-financed social spending, but his supporters have complained about the continent’s highest inflation and unchecked crime.
Workers at the Pertigalete plant shouted: “That’s the way to govern,” reflecting the popularity of nationalizations among many Venezuelans.
