Venezuela creates state cement conglomerate

Venezuela creates state cement conglomerate
Published: 30 July 2009

Venezuelan President Hugo Chavez ordered the creation of a state-run cement company on Wednesday, a year after seizing control of 90 per cent of the local industry in a wave of expropriations.

The decree said the Corporacion Socialista de Cemento was being established with ten million bolivars (4.65 million dollars) capital "for the production, sale and marketing of cement and its derivatives."

In August 2008, the Venezuelan government ordered the expropriation of Cemex’s local subsidiary, and agreed to pay US$267m for an 89 per cent stake in the Venezuelan subsidiary of Lafarge.

It also agreed to pay US$552m for an 85 per cent share of Holcim’s Venezuelan subsidiary.

However, the companies have not been paid yet, and Cemex and Holcim have filed complaints with a World Bank body that arbitrates disputes between countries and private companies.

Chavez has said the shortage of housing in Venezuela justified the nationalizations. On average, about 40,000 to 50,000 houses have been built per year since 2004, while the demand is for double that amount, according to industry sources.