Oil and Gas

Venezuela's Chavez nationalizes cement industry

CARACAS (Reuters) - President Hugo Chavez on Thursday announced the immediate nationalization of Venezuela’s cement industry, a move that will hit Mexico’s Cemex, just a year after Chavez launched a wave of state takeovers.

Venezuela's President Hugo Chavez speaks during a joint news conference with Brazil's President Luiz Inacio Lula da Silva in Recife, capital of the northeastern state of Pernambuco, March 27, 2008. REUTERS/Jamil Bittar

The former paratrooper last year launched a broad nationalization crusade in the energy and telecommunications sectors while threatening to go after other industries such as banking, cement and steel.

“Nationalize it, and as of this instant take all the legal measures ... to nationalize in the short term all of the national cement industry,” Chavez said during a televised speech.

Chavez has frequently accused private cement companies of exporting their production rather than selling it into the domestic market to help ease a housing shortage that has drawn complaints from his supporters.

Last year he warned of "corrective actions" against Venezuelan Cemex VCM1.CRVCM2.CR, a local division of Cemex CMXCPO.MX after residents accused it of polluting.

Analysts at the time said Cemex was big enough that it would not likely be affected by a takeover of its Venezuelan holdings.

Investors in recent weeks have started worrying that the world’s No. 3 cement producer could face lower profits as a result of an economic slowdown in the United States.

Venezuela in 2007 took over the assets of Cementos Andinos, owned by Colombia's Argos CCB.CN.

Chavez threatened to nationalize steelmaker Ternium Sidor TX.N over domestic supply complaints but eventually negotiated a deal to avoid it, and threatened to nationalize banks he accused of poor lending practices, but never carried out the threat.

Thursday’s announcement shows Chavez returning to his combative 2007 style of aggressive nationalizations after focusing this year on practical issues following his defeat in a December referendum that would have extended his socialist drive.

He promised to attack day-to-day issues like food shortages and rampant crime after an energy sector nationalization drive that pushed Exxon Mobil XOM.N and ConocoPhillips COP.N out of the OPEC nation.

Reporting by Brian Ellsworth; Editing by Eric Walsh