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Chavez bashes executives of Mexico's Cemex

Chavez bashes executives of Mexico's Cemex

President Hugo Chavez lashed out at Mexican cement company Cemex on Thursday, calling its executives "irresponsible" and "disrespectful" after they vowed to seek international arbitration over the nationalization of their Venezuelan unit.
Chavez also sought to justify his government's takeover of the company's local cement plants by criticizing its environmental record and accusing it of price-gouging.
His strong remarks suggest the fight is far from over three days after Venezuelan officials seized the company's local operations, backed by National Guard troops.
Cemex SAB, the world's third-largest cement maker, called the confiscation of its assets a "flagrant violation" of Venezuela's constitution and its expropriation laws, and vowed Wednesday to file a claim before the International Center for Settlement of Investment Disputes, an autonomous division of the World Bank in Washington.
Venezuela's offer to pay US$650 million for a majority stake in Cemex's local operations "significantly undervalues its business in Venezuela," the company said in a statement.
Chavez did not mention Cemex's planned arbitration in remarks he made on state television Thursday, but he did say officials at the company "have been disrespectful."
"Some of those transnational managers, they speak English although they're generally Latin Americans. They have a superiority complex," he said.
Chavez accused Cemex of "looting" Venezuela's wealth and "selling the most expensive cement in the world." Without offering evidence, he added that Cemex's local plants polluted the environment and sickened Venezuelan children.
"Go see the pollution there is _ and not only in the trees, along the coasts _ but in the lungs of boys and girls," Chavez said without elaborating.
Cemex spokesman Jorge Perez said the company would not respond to Chavez's comments.
On its Web site, Cemex's Venezuelan subsidiary says it has "incorporated modern technology in all in our operation units for prevention and environmental control."
The company says sleeve filters are installed in its ovens, mills, freezers, silos and grinders to trap dust and other particles, while electrostatic filters are used to trap gases. Cemex also says it has annual reforestation program for exploited areas.
Venezuela's National Securities Commission meanwhile extended a measure suspending trading in shares of Cemex's Venezuelan subsidiary until next Monday.
The commission, which first halted trading on Tuesday, said it wanted to give minority shareholders time to gather information on what the expropriation might mean. As long as Cemex and Venezuela continue disputing the terms of the takeover, it is unclear how much the government will pay minority shareholders for their stakes.
Late Thursday, U.S. traded shares of Cemex had fallen 2.8 percent to US$20.41 on the New York Stock Exchange since the takeover.
Venezuela seized control of Cemex's local plants on Monday night as a deadline for negotiating terms expired. The move marks Chavez's latest step to nationalize key sectors of the economy _ and a specific bid to acquire tools to boost Venezuelan infrastructure.
Cemex, which operates in more than 50 countries, says its Venezuelan assets include three cement plants, 30 smaller concrete factories and a shipping terminal. The company has at least 64 other cement plants and more than 2,000 concrete facilities worldwide, according to its Web site.
Spokesman Jorge Perez on Wednesday said Cemex would file its arbitration claim soon, but he gave no exact date.
Venezuelan government officials say Cemex had demanded more than US$1.2 billion for a majority stake in their local unit _ an amount they called unrealistically high.
Two other cement companies agreed to the nationalization of their own Venezuelan units earlier this week. Paris-based Lafarge SA sold an 89 percent share of its local unit for US$267 million, while Zurich, Switzerland-based Holcim sold the government an 85-percent share for US$552 million. Both companies will stay on as minority partners.
Under Chavez, the government has also nationalized the country's largest telephone and electricity companies and several major oil projects, and is in the process of nationalizing Venezuela's largest steel maker, Sidor.
Chavez on Thursday said his government is "at the point of reaching a final agreement" on terms with Sidor's former majority stakeholder, Luxembourg-based Ternium SA.


Updated : 2021-03-03 11:55 GMT+08:00