Chavez to seize Guayana iron, aluminum and metals companies

President Hugo Chavez of Venezuela has again fired up his expropriation vehicle as the Venezuelan economy contracts due to the growing dearth of private companies doing business in the country.

RENO, NV - 

Nearly two weeks after seizing a Pepsi-Cola Venezuela warehouse, President Hugo Chavez, presumably the new soft drink king of  Venezuela, has now reverted to his standby of expropriating metals and mining companies.

Venezuela's largest trade chamber Fedecamaras estimates that more than 200 businesses of all kinds have been expropriated since 2005, including a few promising gold mining projects.

On Saturday, the president accused domestic and international capitalists of benefitting from Venezuela's natural resources, and said it is necessary "to reduce the high levels of exports of raw materials, iron, briquettes, aluminum, and use them for national development. "

Chavez announced plans to seize aluminum, iron and other metals firms in the Guayana region, already renowned for its gold mining projects. The government's growing presence in the region could expand the role and power of the basic industries company CVG or Corporacion Venezolana de Guayana, which controls a number of mining concessions.

Among the companies targeted for expropriation is Materiales Siderurgicos, or Matesi, the Venezuelan subsidiary of Luxemburg-based steel manufacturer Tenaris. Chavez said he is moving to nationalize the iron briquettes manufacturers after settlement talks for a government takeover failed.

Chavez has also said he will expropriate Venezuelan-owned Orino Iron, as well as aluminum manufacturer Norpro de Venezuela C.A. an affiliate of the U.S. company Napro.

He also decided to nationalize small transport businesses serving the mining companies in Venezuela.

Earlier this month, Chavez expropriated a PepsiCo warehouse as part of his decree to expropriate five warehouses owned by the company's largest food maker, Empresas Polar. Pepsi has had a joint venture with Polar during the past 15 years under which it supplies the South American nation with carbonated drinks.

Polar estimates that its warehouses are worth $50.5 million. The president of Pepsi's Latin American division, Luis Montoya, told Bloomberg, "The situation is worrying because it could have a serious effect on hundreds of workers."

"It puts the continuity of our business at risk and affects the supply of our products," he said.

International economists say Venezuela's economic policies of the nationalization of industries and stringent currency control are causing the Venezuelan economy to contract, although it is one of the world's great oil powers. Some predict a 5% contraction this year, while the IMF is forecasting a 2% economic decline this year.

The World Bank's chief economist for Latin America, Augusto de la Torre, recently told the Washington Post, "The reason Venezuela is contracting is because private activity is contracting. What we're seeing in Venezuela is a phenomenon where productivity, private activity and private business is falling." 

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Hugo Chavez (Hugo the Barbarian) new Conan or Spartacus? I do admire Hugo Chavez of being mordern day Conan the Barbarian or Spartacus! He is just like Conan in fighting Evil Thusa Doom in Conan the Barbarian. He is fighting Evil Capitalist Pigs of the world! by Koichi Ito on May 18 2010, 05:07 Find this comment inappropriate? Report it

Methodology How is Hugo expropriating. Is he buying at market value or just grabbing? If he is using the later, Venezuella will soom be in trouble because it means her own foreign assets could be used to offset what was "stole" back in Venezuela. One could only . .more hope that even though these assets are now in the hands of people, that Hugo will not turn them into revenue stream for comrades and relatives but that they continue to produce effcieintly whilst spreading the spoils for the benefit of all people of the land thorugh social programmes . .less by Gambu on May 18 2010, 06:07 Find this comment inappropriate? Report it

To Gambu You both live in dream world!! Bye bye Venezuela. by Dereck on May 18 2010, 14:40 Find this comment inappropriate? Report it

My comment I live in BC, here they believe the private sector does everything better than the public sector. So the question is can the public sector beat the private sector. In reality the barbarian will die. In a dream world he would succeed. . .more Chavez is a dreamer who is letting his people and his country down, which is the sad truth. It is too bad for he is quite a smart man that in reality does not know how the economy works. He has lots to learn from China. . .less by David on May 19 2010, 02:36 Find this comment inappropriate? Report it

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