September 28, 2014 / 12:01 AM / 5 years ago

Clorox warns of safety concerns after Venezuelan takeover of plants

(Reuters) - U.S. cleaning products maker Clorox Co (CLX.N) said the Venezuelan government’s takeover of two of its plants after the company pulled out of the country raised “grave concerns” about the safety of workers and surrounding communities.

A Clorox worker walks past the's company logo at its headquarters in Valles del Tuy, in Miranda state September 26, 2014. REUTERS/Carlos Garcia Rawlins

Venezuela announced on Friday the “temporary” takeover of the two plants owned by Clorox, which said it left the country because of difficult economic conditions.

After Clorox management’s departure, many of the firm’s 400 workers occupied two plants in the Valles del Tuy district south of Caracas and in central Carabobo district.

Clorox said the production of cleaning products, in particular bleach, was “a highly specialized and technical process.” The company said it had safely secured the plants before its exit, including removing all the chlorine.

“The Venezuelan government’s actions raise grave concerns, and Clorox and its affiliates cannot be responsible for the safety of workers and the surrounding communities or any liability or damages resulting from this occupation,” Clorox said in a statement on Friday.

The Oakland, California-based company added it was prepared to discuss with the government “prompt, adequate and effective compensation” for the takeover of the plants.

Venezuelan Vice President Jorge Arreaza visited the Valles del Tuy plant on Friday evening and said the facility would be reactivated. He gave no further details of the government’s plans for the plants.

Clorox announced its exit on Monday, saying its business was not viable and that it would sell its assets.

It is the latest sign of dissatisfaction from private businesses with President Nicolas Maduro’s running of the South American OPEC nation’s economy.

Clorox said operating restrictions imposed by the government, economic uncertainty and supply disruptions would have led to considerable operating losses.

Its share price rose on the announcement, despite the company saying it expected to incur after-tax exit costs of $60 million to $65 million, or 46 cents to 50 cents a share, in fiscal 2015.

Various multinationals, from Colgate-Palmolive Co (CL.N) to Avon Products Inc (AVP.N), have been warning of hits to their balance sheets and are scaling back operations in Venezuela, citing Byzantine currency controls and a slowing economy.

Reporting by Eric Beech in Washington; Editing by Peter Cooney

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