Chavez nationalises cement industry

Order by country's president comes as parliament approves further taxes on oil.

    Chavez, the Venezuelan president, earlier nationalised part of the country's oil fields [Reuters]

    Nationalisation imminent
    The cement industry nationalisation programme would take place in the "short term," Chavez said, without giving specific dates.
    He said cement companies will be compensated for the state takeover of what he called "a strategic industry".
    Most of the cement market in Venezuela is supplied by foreign companies.
    Mexico's Cemex cement company, which operates three plants in Venezuela, controls almost half the local market.
    Mexico's Foreign Relations Department said in a statement that it was conducting talks with Caracas to understand the reach and nature of Chavez's order.
    "Naturally, as on previous occasions, the department will do everything within its reach to protect the interests of Mexican companies operating abroad," the statement said.
    France's Lafarge and Switzerland's Holcim also have operations in the country.
    David Hargreaves, managing editor of International Cement Review, told Al Jazeera that the companies would be "cautiously concerned".
    "I think that they will sit tight and see what happens. [Nationalisation] could be a little bit of hype for local consumption."
    However, Hargreaves said while nationalisation would be a loss to the foreign companies, Venezuela is only a minor market for cement.
    "The European arena is big for Lafarge and Holcim and Mexico is big for all three companies. Geographically they have a large spread. Venezuela is not major league."
    Oil tax move
    The Venezuelan parliament's decision on Thursday to impose a further taxes on oil comes as world oil prices continue to rise.

    "Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability"

    Angel Rodriguez, Venezuelan parliamentarian

    The tax would take 50 per cent of oil revenues above $70 per barrel and an additional 60 per cent of revenues over $100 per barrel.
    The law requires a second approval by the National Assembly before it takes effect.
    Chavez has already nationalised part of the country's oil industry - a move that has led to an international legal battle with US oil company ExxonMobil.
    Angel Rodriguez, a Venezuelan parliamentarian, told ABN, the country's state news agency: "Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability.
    "One way to distribute them to our people, who are the owners of the oil, is to create this tax."
    The tax will apply to both international and national companies, including PDVSA, Venezuela's state oil company.
    ExxonMobil battle
    The move towards a tax on oil firms will give Chavez new funds to shore up popularity among the nation's poor majority, who have backed him for almost a decade but are increasingly critical of his government for food shortages and rampant crime.
    Lawmakers could give the bill final approval next week.
    PDVSA, the state oil company, took control of part of Venezuela's oil field last year as part of the nationalisation programme.
    ExxonMobil and Conoco were pushed out in the process.
    The showdown led ExxonMobil to seek court injunctions for up to $12bn in compensation, a move Chavez described as "legal terrorism".
    He threatened to retaliate by halting oil sales to the US.
    A London court last month threw out one of the orders.

    SOURCE: Al Jazeera and agencies


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