Mexico's Cemex, the world's third largest cement producer, has sought World Bank arbitration over Caracas's nationalization of its Venezuelan operations, a company spokesman said Thursday. "Cemex presented its demand before the international mediation tribunal of the World Bank," Jorge Perez, a spokesman for the multinational told AFP. The request was made before the bank's International Center for Settlement of Investment Disputes on October 30 but was only publicized Thursday.
The Venezuelan operations of Cemex, which produces half of Mexico's total cement output, were symbolically seized by President Hugo Chavez in August, after he rejected the company's reportedly overpriced demand of 1.3 billion dollars for a controlling share of the business. The move to nationalize Cemex came after talks on a buyout failed, prompting Caracas to seize control of the company's assets in Venezuela, including its capacity of 4.6 million tonnes a year.
With Cemex, Venezuela locked up control of more than 90 percent of the domestic cement industry after its pressured buyouts of two other foreign companies.
Cemex, placed in the hands of the powerful Venezuelan state oil monopoly PDVSA, was added to deals in which the government obtained an 89 percent controlling interest of French cement giant LaFarge's local operations for 267 million dollars, and 85 percent of Swiss firm Holcim's plant for 552 million dollars.
Venezuela's appropriation of Cemex followed Chavez's announcement in April that he would nationalize the entire cement industry, saying he wanted to create a large national cement company so that he could build much-needed housing for the poor. In June, he issued a decree giving the companies 60 days to negotiate handover agreements. Venezuela in the past two years has nationalized oil fields in the Orinoco basin, energy, telecommunications, oil and steel concerns, in addition to the French, Swiss and Mexican cement companies.
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