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Chavez seizes Cargill factory
Question of the Day
CARACAS, Venezuela | The government on Friday temporarily seized a pasta factory owned by U.S. food giant Cargill Inc. in a pricing spat, the latest move by President Hugo Chavez’s government against foreign companies.
Since taking office a decade ago, Mr. Chavez, a strident U.S. critic, has nationalized large swaths of Venezuela’s economy, including a rice mill owned by Cargill earlier this year and dozens of oil service companies last week.
Bolstered by resilient approval ratings, the former soldier is likely to keep moving against the private sector this year as he pushes ahead with his plan to build a socialist state in South America’s top oil-exporting nation.
Friday’s move could lead to the permanent takeover of the pasta factory. In March, Mr. Chavez ordered the nationalization of Cargill’s rice mill a week after a similar temporary seizure.
Deputy Food Minister Rafael Coronado said the government would run the factory for 90 days, after officials found it was not producing enough of a type of pasta sold at cheap, government-established prices.
“There was a marked noncompliance with the law,” Mr. Coronado said, flanked by soldiers, in a television broadcast from outside the plant in the coastal state of Vargas.
Mr. Coronado said the government could decide to take further action against the plant after the 90-day period.
Cargill is one of the world’s largest privately owned companies with a dozen plants and about 2,000 employees in Venezuela. It declined to comment on Friday’s move.
Mr. Chavez won a referendum in February that allows him to stay in office as long as he keeps winning elections. His approval ratings have stayed above 60 percent in recent polls despite spending cuts to offset lower oil revenues this year.
He launched his main nationalization drive in 2007 during a five-year oil boom when he took over the energy sector and the main telecommunications company, actions lauded by his mainly poor supporters.
Struggling with Latin America’s highest rate of inflation, he has moved against several food-processing companies accused of dodging government low-price regulations and has stepped up takeovers of farms deemed idle.
He nationalized the Cargill rice plant in March because it produced a type of rice that was not included in price controls. He also threatened to nationalize the country’s biggest private employer, brewer and food processor Polar.
Last week, Venezuela seized several oil-service companies, including a large unit of U.S. firm Williams Companies. Mr. Chavez is also trying to buy the Venezuelan unit of Spain’s Santander financial group.
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