Cemex values Venezuela operations at US$1.8B

Cemex values Venezuela operations at US$1.8B
Published: 12 August 2008

Mexican cement giant Cemex has put a US$1.8bn price tag on its Venezuela operations, an amount that President Hugo Chavez’s administration, which is nationalizing top assets in the sector, deems "unreasonable," said a Venezuelan government official familiar with the negotiations.

"They are putting a value of US$1.8bn," the person told Dow Jones Newswires Monday. The price was "unreasonable" given that the main cement plants owned by Cemex in Venezuela were relatively old and need investment for upgrades to increase production, the person added.

The source said the prices requested by France’s Lafarge SA and Switzerland-based Holcim Ltd were more "logical" but refused to discuss them.

A Cemex spokesperson in Venezuela refused to comment, while calls to the Caracas’ offices of Lafarge and Holcim went unreturned.

All three companies, which together constitute the dominant force in Venezuela’s cement industry, are considering staying on as minority partners with the Venezuelan government, the person said.

In April, President Hugo Chavez announced plans to takeover the country’s cement companies, accusing them of diverting resources away government-designated priority sectors, including building materials for subsidized housing for poor families.