Cemex Venezuela 1H Profit Up 65%, helped by government spending

Cemex Venezuela 1H Profit Up 65%, helped by government spending
Published: 25 July 2005

The Venezuelan subsidiary of Cemex managed to increase its profit levels by 65% during the first six months of the year, as the Venezuelan government continued to increase spending. 

 Most cement demand in the country comes from private individuals in Venezuela who tend to add more space to their own homes, a sector known as "auto construction," and from the retail industry, the company noted. 
 
Seeking to capitalize on the government’s low-income construction plans, Cemex officials released a low-priced brand of cement last month for the exclusive use of government-financed housing projects. 
 
The new product sells for VEB6,990 bolivars per bag, roughly 16.3% below the fixed price for cement. 
 
Overall cement sales in Venezuela are up roughly 15% this year, according to industry executives. 
 
Venezuelan President Hugo Chavez is offering subsidies and low-cost loans so poor Venezuelans can access homes. He has also announced plans to build as many as 120,000 this year but has so far only managed to build 17,000, according to government figures. Government critics claim the failure to build more homes is a result of administrative inefficiencies.