Great Reboot

Colgate halts Venezuela detergent plant for lack of boxes

Containers of laundry detergent Vel Rosa produced by Colgate-Palmolive Co are seen on a shelf at a supermarket in Caracas, Venezuela March 7, 2018. REUTERS/Marco Bello

VALENCIA, Venezuela (Reuters) - U.S. consumer goods maker Colgate-Palmolive Co CL.N has halted production at its detergent and dish soap plant in Venezuela because it lacked cardboard boxes to ship products, a union leader said on Thursday.

The plant in the city of Valencia stopped operations on Monday, union representative Carlos Rodriguez said in a telephone interview. Its cardboard provider, Ireland's Smurfit Kappa SKG.I, halted production in Venezuela last month after government authorities took over its local unit.

Smurfit Kappa was one of the few remaining shipping materials manufacturers in the OPEC nation. Colgate is attempting to import cardboard from neighboring Colombia, Rodriguez said.

Rodriguez said the lack of cardboard prompted the company to push up vacations for the plant’s 77 workers. He said a Colgate toothpaste plant was still operating, but had enough cardboard stock to cover only one more month of production.

“If (the toothpaste plant) does not get the cardboard, its operations will also be suspended,” Rodriguez said.

Colgate-Palmolive did not immediately respond to a request for comment. The company has five plants in Venezuela, including a soap factory that stopped operations more than a year ago.

Multinationals in Venezuela have drastically scaled back operations as the socialist government’s currency controls have made obtaining raw materials difficult, and an economic collapse marked by spiraling hyperinflation has dented demand.

Reporting by Tibisay Romero in Valencia, Venezuela; Additional reporting by Mayela Armas in Caracas; Writing by Luc Cohen; Editing by Richard Chang