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MONTERREY, Mexico: Mexican company Cemex late Wednesday decried as unlawful moves by Caracas to nationalise its Venezuelan operations, and vowed to seek international arbitration in the case.
"Cemex believes the confiscation and subsequent start of the expropriation process is a flagrant violation of the Constitution, Law of Expropriation and other laws of Venezuela," the company said in a statement, adding that it would seek arbitration by the International Center for Settlement of Investment Disputes.
"Cemex also believes the Venezuelan government's actions highlight a lack of respect for the principles of international law and the treaties relating to reciprocal protection of investments, which forbid the occupation of goods and deprivation of rights without fair and effective compensation and without an expropriation procedure," the statement added.
Caracas on Tuesday took symbolic control of the Mexican-owned Cemex plant in the eastern Venezuela, in the most recent of a series of state takeovers of key foreign-controlled businesses.
The Venezuelan government now has locked up control of more than 90 per cent of the domestic cement industry with its nationalisation of one foreign-owned plant and pressured buyout of two others.
The move to nationalise Cemex came after talks on a buyout failed to conclude before a midnight Monday deadline, and gave Caracas control of the company's assets in Venezuela, including its 4.6 million tonnes a year capacity, half of all Venezuelan cement production.
Cemex, placed in the hands of the powerful Venezuelan state oil monopoly PDVSA, was added to the deals in which the government obtained a 89 per cent controlling interest of French cement giant LaFarge's local operations for US$267 million, and 85 per cent of Swiss firm Holcim's plant for US$552 million.
Reports said that Cemex had been seeking more than US$1.3 billion for its activities in Venezuela, a price Caracas considered too high.
In April, Venezuela's leftist President Hugo Chavez announced he would take control of the cement industry, as he has with the local operations of major foreign oil companies, telecommunications businesses, a major iron and steel business, and most recently a bank.
The government justified its takeover of the cement business as necessary to boost housing construction.
- AFP/yb
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