Venezuela and Mexico dispute over cement (Updated)

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Venezuela and Mexico dispute over cement

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Caracas, Venezuela, 4 April 2008. Last night and during a televised message, Venezuelan President Hugo Chavez announced his country would be nationalizing the cement industry and pay compensation. With tree plant in Venezuela, the Mexican company CEMEX accounts for half the local cement market. Other foreign companies from France and Switzerland also participate in the cement business. But the Venezuelan Socialist Government is keen on building houses under a social scheme to alleviate poverty. Thus, the nationalization of the cement industry has been long been waited for.  Venezuela has already nationalized oil business at the Orinoco basin and purchased a major dairy milk distribution company recently.

Mexican reaction was immediate. Today, its Foreign Ministry asked Venezuela for clarification on the nationalization. CEMEX also stated it had not received any nationalization offer yet. However, CEMEX expects Mexican government to dispute it. Chavez had criticized CEMEX for its impact on ecology and its unwillingness to serve local market but foreign ones instead. CEMEX produces over 4 million tons of cement yearly in Venezuela. It also provides more than 3.000 employments in the local market. However, today its shares plummeted more than 2% after the nationalization announcement.   

Despite having resumed warmer relations after a diplomatic row few years ago, both countries have not been able to totally agree in major regional events. Mexico assumed a rather distant approach towards the killing of few students at a FARC camp in Ecuador last month. Furthermore, Venezuela Ambassador in Mexico, Roy Chaderton Matos, has fingered Mexican business sector - akin to Opus Dei - in destabilizing actions against Venezuela.  Two days ago, Chaderton joined the Bolivian and Ecuadorian Ambassadors in Mexico to criticise a persistent media campaign against their countries.

France has also asked the Venezuelan government for further clarification of the nationalization of Lafarge investments. However, it is unlikely this action would be as disputable as the CEMEX nationalization.

PS: Mexican governement announced it did not approve of the Venezuelan nationalization of CEMEX. While Venezuelan labour associations backed the taking over of the cementi industry. After attending a meeting wix Mexican government, Venezuelan Ambassador in Mexico, Roy Chaderton,  explained his government would be paying for legal compensation to CEMEX. However, it is unclear when the nationalization would take place. No specific date has been given yet.

Sources: VTV, Aljazeera, Globovision, unionradio, El Universal, BBC Mundo, El Universal.mx, Reforma, Jornada, Exoline, Unionradio,

Related stories: Chávez's nationalisation drive