MercoPress. South Atlantic News Agency

Venezuela formalizes nationalization of cement industry

The Mexican-owned Cemex is Venezuela's largest cement producer

Venezuelan President Hugo Chavez's nationalization of three foreign-owned cement businesses took effect on Thursday with the publication of the resolution in the Official Gazette according to the government run Bolivarian News Agency.

The nationalization originally announced involves companies belonging to Mexico's Cemex SAB, France's Lafarge SA and Switzerland's Holcim Ltd. The government is to have shares of at least 60% in Cemex Venezuela, Holcim Venezuela CA and Lafarge's Fabrica Nacional de Cementos, but officials have said that the current owners will be allowed to keep minority shares. The companies, according to Bolivarian News Agency are in talks with the government on terms of the nationalization. The government's decision was supported by a previous ruling from the Justice Tribunal which argued that the government could have "direct management" of the cement sector since it's an industry of "undeniable strategic value for the economic and social development of the country". When he announced the nationalization back in April, Chavez said the government could not permit businesses to keep exporting raw materials while Venezuela needs cement to help confront a housing shortage. He subsequently ordered Venezuela's largest steel maker, and Argentine-Italian company, nationalized. The cement industry produced 10.2 million tons in 2007. Cemex controls 50% of the Venezuelan market while the other two companies share the rest evenly. President Chavez government last year took majority control of the country's largest telecommunications and electricity companies, and of oil projects previously run by some of the world's largest oil companies.