Cemex Venezuela sees boost from government housing

Cemex Venezuela sees boost from government housing
Published: 08 June 2005

Cemex Venezuela , plans to boost Venezuelan sales as much as 18 per cent by supplying a new low-cost product to government housing programs, Cemex executives said Tuesday. 

The executives expect sales in Venezuela to rise to 2.4Mt by the end of the year from around 2Mt. Cemex Venezuela produces a total of nearly 4Mt a year and has subsidiaries in Panama and the Dominican Republic. 

The new Venezuela product, called "Solidarity Cement", would be sold at a price of 6,990 bolivars ($3.25) a bag -- more than 16 percent below the government-set maximum cement price -- exclusively to government housing projects. 

President Hugo Chavez’s administration has announced plans to build 120,000 new low-income homes this year as part of a campaign to tackle a chronic shortage of housing in the world’s No. 5 oil exporter. Despite the nation’s oil riches, the majority of Venezuelans still live in poverty. 

Chavez has introduced cheap state housing credits and subsidies to help Venezuelans buy their first homes and revitalize the construction industry, which has lagged in recent years. 

"The government’s massive program to reduce the housing deficit is giving potential to the construction industry here," Cemex Venezuela President Enzo Moschella told reporters. 

"Cement consumption last month reached the highest levels since May 1998. That shows signs of a strong recovery," he added. 

Cemex Venezuela reported in April that its first quarter 2005 net profits rose to 31.8bn bolivars ($14.8m), an increase of 87 per cent over the same period a year ago, as Venezuela’s economy experienced strong growth.