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Hey Hugo, here's a new one--nationalize the cement industry.
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| Shakka |
OK George, let me have it.
| quote: |
Chavez Plans to Nationalize Venezuela Cement Industry
By Steven Bodzin and Thomas Black
April 4 (Bloomberg) -- Venezuelan President Hugo Chavez
said he will nationalize the country's cement companies to boost
supplies of construction materials, a pledge that threatens the
operations of Cemex SAB of Mexico, the largest producer.
The state will pay plant owners ``whatever it costs,''
Chavez said in issuing orders for the takeovers. Cement makers
are causing pollution and failing to invest in new technology,
Chavez said. A seizure would also take assets of Lafarge SA of
France and Holcim Ltd. of Switzerland. Venezuela took over a
plant from Colombia's Cementos Argos SA in 2007.
The nationalization order comes as Chavez seeks to
alleviate shortages fueling a 25.4 percent inflation rate in
Latin America's fastest growing economy. The government is
restricting food exports and Chavez said in January he would ban
asphalt sales abroad. Chavez has accused building-material
suppliers of creating a monopoly that slows home and road
construction while overcharging for its products.
``Starting from now, all legal and economic measures should
be taken to nationalize the national cement industry in the
short term,'' Chavez said, according to a communications
ministry statement issued today.
Shares Fall
Chavez already has seized the telephone and electricity
industries, and increased state control over oil production in
his drive toward socialism. He paid almost market value for
telecommunications company CANTV. With oil projects, he has
refused to go above book value. The government, after spending
billions of dollars on the takeovers, is in arbitration with
ConocoPhillips and Exxon Mobil Corp. over oil venture payments.
Cemex American depositary receipts fell 98 cents, or 3.6
percent, to $26.50 in New York Stock Exchange composite trading
as of 12:07 p.m. Lafarge fell 88 cents, or 0.8 percent, to
112.71 euros in Paris. Holcim gained a half a Swiss franc to
107.9 francs.
Cemex is the largest domestic supplier of cement and ready-
mix concrete in Venezuela, with annual cement production
capacity of 4.6 million tons and 33 ready-mix plants, according
to its Web site. A local subsidiary, Cemex Venezuela SACA, had a
market value of 1.18 billion bolivars ($547 million) at the
start of trading today. The company's Venezuelan cement sales
grew 17 percent in 2007, Cemex said in a Jan. 29 teleconference.
`Negative'
``Cemex has not received any official notification about
this decision from the government of Venezuela,'' company
spokesman Jorge Perez said today in a telephone interview.
``Cemex has requested an explanation from the appropriate
Venezuelan authorities.''
Venezuela's contribution to Cemex's profit has declined
since Cemex purchased Australia's Rinker Group Ltd. for $14.2
billion in July, said Marcelo Telles, an analyst with Credit
Suisse in Mexico City. Cemex's operations in Venezuela account
for less than 5 percent of the company's earnings before
interest, taxes, depreciation and amortization -- a measure of
cash flow known as Ebitda, he said.
``It's marginally negative, but it shouldn't be a
significant impact,'' Telles said today in a telephone
interview. Rinker group makes more than 80 percent of its sales
in the U.S.
Venezuela is a market Cemex would like to hang on to,
Telles said, because profit margins are higher than its
operations in the U.S. or Europe. The terms of having to sell to
the Venezuelan government may not be favorable, he said.
`Fair Value'
``I don't think they would get anything close to fair
value, but it's too early to say,'' Telles said.
Cemex's three Venezuelan cement plants had 45 percent of
the market in 2007.
Holcim, the world's second-largest cement maker, is taking
the threat ``seriously,'' spokesman Peter Gysel said in a phone
interview. The Swiss company runs a plant in Venezuela's
Cumarebo region and another in San Sebastian. Together, the
factories produce 2.4 million tons and employ more than 500
people.
``We don't know any more than others,'' Gysel said. ``We
have to wait to see what happens. He said it already several
times in the past.''
Lucy Saint-Antonin, a spokeswoman at Lafarge, the world's
largest cement company, declined to comment. The company's
revenue from Venezuela is 90 million euros ($141 million). Its
two plants have the capacity to make 1.6 million tons, Saint-
Antonin said.
--With reporting by Brian McGee in Madrid, Antonio Ligi in
Zurich and Thomas Black in Monterrey, Mexico. Editor: Fred
Strasser, Robert Jameson |
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| Krypton |
| Well, looks like the socializing economy of Venezuela is losing productivity. Therefore the growth in value of their goods and services is slowing. So, the government must increase the money supply in order to provide for all the socialist programs they have in place. So it is no wonder they have 25% inflation... |
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| Capitalizt |
| If I were a company in Venezuela, I'd quietly pack up my things, order the plane tickets, then set my entire operation ablaze after closing time tonight. If they want the business, let them build it themselves. |
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| Dupz |
If Venezuela wants to vote in some lunatic socialist nutcase, then they deserve everything they get.
It's a pity that now that these fruitloops are in power they'll probably rig any future elections and blame their ty economy on someone else other than themselves. |
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| Fir3start3r |
Chavez's dream of fitting all his enemies with low cost cement shoes is becoming a reality! :eek:
/now he just needs the nationalize the fishing industry so he can throw in some piranha for good measure... :clown: |
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| DJ Shibby |
Looks like he's taking steps to increase national infrastructure by controlling the leading resource. Makes sense, I suppose. Roads, buildings, etc.
I wonder what the effect is on jobs and if there's any data on it. If the people want their government run like that and he's making it work, then good for them. I don't see much complaint, but then again, the media is quite filtered and to us in the USA he is an enemy of national interest due to controls on oil resources. |
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| Trancer-X |
It's amazing how the Blowback always seems to hurt us (and all of the other people involved) in the end.
| quote: | The term "blowback," which officials of the Central Intelligence Agency first invented for their own internal use, is starting to circulate among students of international relations. It refers to the unintended consequences of policies that were kept secret from the American people. What the daily press reports as the malign acts of "terrorists" or "drug lords" or "rogue states" or "illegal arms merchants" often turn out to be blowback from earlier American operations.
- Chalmers Johnson, Blowback: The Costs and Consequences of American Empire, Pg. 8
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| Fir3start3r |
Where's Sir George on this one?
Any insight there George? |
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| jerZ07002 |
| quote: | Originally posted by ********
It's true.
While Nationalization can block out foreign investment - government control of infrastructure, transport, and agrifood industries is the most efficient system - but it is sad he can't make his own industries for this, and has to block the free market --ideally he should be able to produce his own needs without shutting down the free market - if it is cheaper why doesn't he just make a crown corporation? Oh because people competeing for profit drives costs up - thus creates supply and demand based on the needs of the industry rather than the capacities of the industry.
I guess it is a trade off - however it is a global marketplace - but as long as he is willing to " pay anything" then the companies might as well demand the venezuelan reserve or something...
I think that nationalization should be able to happen for public interest, however, in this instance Chavez should be able to create the infrastructure that will be controlled by the government rather than take it. Cement is not a non renewable source point resource, it is a produced chemical mixture. Although setting up quota's is a good idea outright nationalization is not required - rather he just needs to set quotas on domestic product based on domestic projects while allowing excess to be made available for the free market.
His approach is very frontal, but 25% inflation is pretty damn high so obviously he is making too much money... it makes no sense why he should have such high inlfation except if he is making money which would be a self engineered situation. |
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| Shakka |
| quote: | Originally posted by Fir3start3r
Where's Sir George on this one?
Any insight there George? |
Methinks George might know when to call it a day. Or at least he realizes when he has no leg left to stand on.
Thanks NY Times
| quote: |
April 24, 2008
Editorial
Chávez’s Takeover Spree
Venezuela’s president, Hugo Chávez, is in political trouble. He is clearly hoping that a new expropriation spree will fire up his supporters, at least long enough to keep his allies from suffering heavy defeats in November’s state and municipal elections.
In recent weeks, he ordered the nationalization of the foreign-owned cement industry and the country’s biggest steel company. He also nationalized one of Venezuela’s biggest milk producers, its largest cold storage and distribution company and several sugar plantations.
It is hard to know whether Mr. Chávez will get the full political bang that he is seeking. His popularity has fallen steadily since December when voters rejected his proposed constitutional reform that would have allowed him to stand indefinitely for re-election. If nothing else, the nationalizations will allow his government to use cheap milk and cement to bolster his support among Venezuela’s poor.
What is certain is that the country’s economy will suffer. Mr. Chavez’s cronies have proved that they don’t have the skill — or the honesty — to run these businesses. Bungled management is responsible for a decline in production at the state-run oil company Petróleos de Venezuela, known as Pdvsa. The expropriations, added to exchange controls and price controls, are holding back much needed private investment. Even soaring oil prices aren’t helping. High global food prices and unfettered government spending have pushed annual inflation well past 20 percent, while price controls are producing shortages of basic foods.
Last year, Mr. Chávez forced foreign oil companies to give up control of oil fields in eastern Venezuela, and he nationalized the country’s largest telecommunications company and the electricity company serving the capital, Caracas. These new expropriations were another attempt to grab control of all of Venzuela’s economic and political life while providing more opportunities for patronage and corruption.
Venezuela’s voters have already shown that they can see through such manipulations. Mr. Chávez lost last year’s referendum because students, business leaders, members of the usually ineffectual opposition and some former supporters were willing to work together.
They have an opportunity to deal another blow for democracy in this November’s elections. The vast majority of Venezuela’s state governors and mayors are Chávez supporters. Defeating them at the polls would send a clear message that Venezuelans are truly fed up with Mr. Chávez’s incompetent and authoritarian ways. |
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| nchs09 |
| Sounds like Mexico back in the day where they had nationalized everything. |
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| Shakka |
Methinks Chavez is making things worse. Who knows, if he keeps this up, Venezuela could lie in economic ruin, Chavez could get the boot, and we might actually see a break in the oil logjam? That's my black swan prediction...
| quote: | May 18, 2008
Chávez Seizes Greater Economic Power
By SIMON ROMERO
CARACAS, Venezuela — Faced with shortages of foods, building materials and other staples, President Hugo Chávez is intensifying state control of the Venezuelan economy through a new wave of takeovers of private companies and the creation of government-controlled ventures with allies like Cuba and Iran.
The moves come just months after voters rejected a referendum to give the president sweeping constitutional power over the economy and public institutions, leading to new accusations that Mr. Chávez is more interested in consolidating power than in fixing Venezuela’s problems.
And while he has argued that aggressive action against the private sector is needed to correct social injustices and fight soaring inflation, his critics say his moves are instead compounding those troubles.
One significant measure is foreign investment, which has hit record levels in several other Latin American countries but has fallen in Venezuela.
As foreign interests reacted to Mr. Chávez’s socialist-inspired changes, including nationalizations last year of major electricity, telephone and oil companies, outside investment dropped to just $500 million in 2007. In contrast, Peru, with a population comparable to Venezuela’s 27 million, received $5.4 billion in foreign investment last year.
Still, Mr. Chávez is pressing ahead with the takeovers of companies big and small. These include Sidor, a large, Argentine-controlled steel maker; cement companies owned by Mexican, Swiss and French investors; more than 30 sugar plantations; a large dairy products company; and a sprawling cattle estate on the southern plains.
Mr. Chávez has avoided outright confiscation of private companies by offering some compensation, but the terms of these deals are growing increasingly contentious, with the president threatening to withhold payments. In Sidor’s case, the company had asked for up to $4 billion in compensation; Mr. Chávez is giving it $800 million.
Pavel Gómez, an economist with ODH, a financial consulting business here, said, “In the end, the nationalizations carry the risk of making the economy even more dependent on oil exports than it already is.”
The state role in the economy is broadening as Venezuela’s once torrid growth has slowed somewhat, even though world oil prices have climbed to record highs. Private economists expect the economy to grow about 6 percent this year, compared with 8.4 percent in 2007.
But Mr. Chávez is wagering that he can fill the gap, particularly in foreign investment, through new ventures with allies like Cuba and Iran.
For instance, after a three-day visit here last month by a high-level Iranian delegation, Venezuela and Iran agreed to build a manufacturing plant for tractor parts and a cement factory. Similarly, Venezuela announced the creation this month of two companies with Cuban partners in the fishing and pork industries.
Potentially of greater impact, China and Venezuela inaugurated the headquarters here of a $6 billion fund this month to carry out infrastructure projects. Beijing is putting $4 billion into the fund, part of an effort by Mr. Chávez to export more oil to China in exchange for more Chinese investment in Venezuela.
Meanwhile, Mr. Chávez is testing new policies to curb a slide in the currency, the bolívar, and restiveness over food shortages. Protests broke out this year in parts of Venezuela over food shortages and climbing food costs, including one disturbance in Sabaneta, Mr. Chávez’s impoverished home city, in Barinas State.
Some of the new economic policies, aided by ample oil income, are working relatively well.
The black market rate of the bolívar climbed more than 20 percent in the past two months, to 3.4 to the dollar, after the government soaked up demand for foreign exchange by selling dollar-denominated bonds to investors here. The move brought some stability to a currency that had been shaken by accelerating capital flight in the past year.
A recent surge in oil prices has also helped Mr. Chávez’s government mask declining production at the national oil company, Petróleos de Venezuela. His supporters in the National Assembly recently approved a windfall tax on oil producers, potentially giving the government more than $2 billion in extra revenue this year.
Anxiety here has also eased with the reappearance of some foods on supermarket shelves, notably milk. Stung by criticism over milk scarcity, the government eased price controls for milk and recently took over a large dairy concern, Lácteos Los Andes, directing it to reduce yogurt production and raise milk output.
However, fears are intensifying that Mr. Chávez will press ahead with even more nationalizations. Recent disarray in the gold mining industry, with licenses of several foreign companies suspended, has raised speculation that the government could take over mining concessions next.
And Mr. Chávez is increasingly issuing threats of expropriation, against entities ranging from private hospitals to cacao plantations.
Despite the new nationalizations, and the creation of state companies in recent years as varied as a national airline, Conviasa, and the Hotel Alba, which occupies the building of the old Caracas Hilton here, Venezuela’s economy remains an amalgam of private and state enterprises.
Mark Weisbrot, a Washington-based economist who is broadly supportive of Mr. Chávez’s economic policies, estimates that the public sector accounts for less than a third of the economy even after the latest nationalization wave. “The present government is so far mainly just reversing some of the privatization that took place in the 1990s,” Mr. Weisbrot said.
But Mr. Chávez’s political opponents are questioning why the president is putting even greater power in his government’s hands, with the National Assembly, Supreme Court, federal bureaucracy and most state governments already controlled by his followers.
Opposition figures point out that some of the new policies are reminiscent of measures put forward by the president in last year’s failed referendum, which would have vastly increased his powers.
Mr. Chávez is also trying to introduce changes to school curriculums so that they would look uncritically at his government. That move has generated fierce criticism from parents’ groups.
The president may be having more success, at least for now, in asserting control over the armed forces. In a move similar to a measure in last year’s referendum that would have transformed the military reserve into “popular militia units,” Mr. Chávez created a reserve force last month, with a budget separate from the other armed forces, and with commanders under his direct control.
Some of the most pointed criticism in this coup-prone country is coming from Mr. Chávez’s former military comrades. “Chávez is stimulating a pre-insurrectional climate in the country,” said Raúl Isaías Baduel, a retired general who was the top commander of Venezuela’s military until he broke with the president last year, saying Mr. Chávez was going beyond the law with some projects.
The nationalizations, General Baduel said, were part of a plan by Mr. Chávez “to annihilate the productive apparatus so that we depend more on petroleum income, which is to depend more on the state, or in other words, to depend more on Chávez.” |
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