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Chavez bashes Mexico's Cemex after nationalization

Chavez bashes Mexico's Cemex after nationalization

President Hugo Chavez lashed out at Cemex SAB on Thursday, saying Venezuela is ready to put up a fight in international arbitration as the Mexican cement company seeks to challenge the nationalization of its cement plants.
Chavez said Cemex executives had been "irresponsible" and "disrespectful" during failed compensation talks ahead of the takeover. He criticized the company's environmental record and accused it of price-gouging.
"We're going to battle," he said. "We made every effort to reach an agreement."
Chavez dismissed concerns raised by Mexico's government about the plants' seizure, saying President Felipe Calderon had sent him a message in which, "without having precise information ... (he) says we're giving the Mexican company discriminatory treatment."
"No, it's fair treatment," Chavez said on state television.
He welcomed Cemex's challenge, noting that state oil company Petroleos de Venezuela SA, or PDVSA, has plenty of experience winning nationalization disputes.
"We'll go. We aren't afraid," he said.
Cemex SAB, the world's third-largest cement maker, called the confiscation of its assets a violation of Venezuela's constitution and its expropriation laws, and vowed to file a claim before the International Center for Settlement of Investment Disputes, an autonomous division of the World Bank in Washington.
In a statement, the company said Venezuela's offer to pay US$650 million for a majority stake in its local operations "significantly undervalues its business in Venezuela."
Chavez offered his firm response three days after his government seized the company's Venezuelan operations, backed by National Guard troops.
Government officials say Cemex had demanded more than US$1.2 billion for a majority stake in its local unit _ an amount they called unrealistically high.
Chavez sought to justify his government's takeover of the company's plants by criticizing its environmental record and accusing it of inflating prices.
He claimed Cemex had been "looting" Venezuelan 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 remarks.
On its Web site, Cemex's Venezuelan unit says it has "incorporated modern technology in all in our operation units for prevention and environmental control." Sleeve filters have been installed in ovens, mills, freezers, silos and grinders to trap dust and other particles, while electrostatic filters are used to trap gases, it said.
The subsidiary, Cemex Venezuela, also says it runs an annual reforestation program to restore mined 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.
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. Chavez said a new national cement company would sell cheaper construction supplies in a planned network of state-run hardware stores.
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 subsidiary for US$267 million, while Zurich, Switzerland-based Holcim sold an 85-percent share for US$552 million. Both companies will stay on as minority partners.
Cemex, which operates in more than 50 countries, says its Venezuelan assets include three cement plants, 30 smaller concrete factories and a shipping terminal.
Chavez's government has also nationalized the country's largest telephone and electricity companies and several major oil projects, and is in the process of taking over Venezuela's largest steel maker, Sidor.


Updated : 2021-07-26 07:33 GMT+08:00