CARACAS—Venezuela will take a majority stake in top foreign cement companies' assets in a renewed nationalization drive, the government said Monday, giving the first details of a plan announced last week.
The socialist government will take over at least 60 percent of the local units of Mexico's Cemex, France's Lafarge and Switzerland's Holcim, in a scheme similar to oil-project nationalizations last year.
The three companies are the world's top cement makers and dominate Venezuela's cement industry. The nationalization will leave just a few, small domestic companies in private hands.
Oil Minister Rafael Ramirez fleshed out the plan to put the state in charge of the industry after meeting with officials from the three companies.
"We are sure that in the very short term we can progress in this negotiation with these companies, which will be done bilaterally with each one of them," Ramirez told state television.
Last year, the state oil company paid compensation to take over the country's largest private power company.
President Hugo Chavez has faced criticism from supporters for not building new low-cost housing quickly enough to meet demand. The self-styled revolutionary says control of the cement industry will help him meet construction goals.
Last year he launched a multi-billion dollar nationalization drive that affected energy and utility assets,
Four oil companies accepted the government's offer to take over at least 60 percent of their operations in the Orinoco oil belt in 2007. But Exxon Mobil and ConocoPhillips left the OPEC nation and are seeking compensation through international arbitration.
Venezuela Under Chavez
Mexico has strongly condemned the plan to take over Cemex and said it was lobbying Venezuela to back down.
Cemex's Mexico City-listed stock rose 4.02 percent to 28.95 pesos, holding on to earlier gains stemming from comments by Chavez that implied the Monterrey-based company might escape the nationalization.
Being forced out of Venezuela will not deeply affect Cemex's overall profitability, as the Venezuela operations only accounted for 4 percent of the group's total earnings before interest, tax, depreciation and amortization (EBITDA) in 2007.
But Venezuela is a growth market and Cemex Venezuela is the nation's largest cement producer with annual output capacity of 4.6 million tonnes.
This local unit's share price has risen in Caracas on the nationalization news because investors hope the government will pay a good price for the takeover, traders said.
Lafarge has a local production capacity of 1.5 million tonnes per year through its subsidiary. Holcim can produce up to 2.2 million tonnes per year in Venezuela.
When he tried to seize the presidency in a botched coup in 1992, Chavez promised to reverse privatizations that happened under previous governments. Since winning power at the ballot box in 1998, he has implemented much of his pre-coup program.
Banking and steel are other sectors Chavez has mentioned as possible takeover targets.
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