Venezuela willing to negotiate with Cemex

Fabiola Sanchez, THE ASSOCIATED PRESS

CARACAS, Venezuela - Venezuela, which this week nationalized cement plants owned by Cemex SAB, is willing to resume failed negotiations with the Mexican cement company, Venezuela's vice-president said Friday.

"We want to carry out negotiations in an atmosphere of cordiality, but we'll also do it in whatever arena might be necessary," Vice-President Ramon Carrizalez said after meeting with Mexico's ambassador to Caracas, Jesus Mario Chacon.

There is still a "disposition to reach an agreement, on the part of the Venezuelan government and the company Cemex," he said, adding that a new Cemex negotiating team would soon travel to Venezuela for talks.

Cemex officials did not return calls seeking comment on Friday afternoon. The Monterrey, Mexico-based company has repeatedly said it is open to further talks.

Venezuelan officials seized Cemex's local facilities at midnight on Monday, when a deadline for negotiating terms of the takeover expired. The move marks President Hugo Chavez's latest step to have state control of key parts of Venezuela's economy, following the nationalization of the country's largest telephone and electricity companies, and of several major oil projects.

Cemex, the world's third-largest cement maker, called the confiscation of its assets a "flagrant violation" of Venezuela's constitution and its expropriation laws, and vowed Wednesday to file a claim before the International Centre for Settlement of Investment Disputes, an autonomous division of the World Bank in Washington.

A statement from the company this week said Venezuela's offer to pay $650 million for a majority stake in its local operations "significantly undervalues its business in Venezuela."

But on Friday, Ambassador Chacon thanked Carrizalez for his willingness to resume talks, an offer that he said "outlines a road for finding a solution that's favourable to both parties."

"As a government, we respect the sovereign decisions of Venezuela," he told reporters. "We as the government of Mexico have the obligation to look out for the interests of Mexico and seek what we consider a fair and non-discriminatory deal."

Cemex, which operates in more than 50 countries, says its Venezuelan assets include three cement plants, 30 smaller concrete factories and a shipping terminal. The company has at least 64 other cement plants and more than 2,000 concrete facilities worldwide, according to its Web site.

Venezuelan government officials say Cemex demanded more than US$1.2 billion for a majority stake in their local unit - an amount they called unrealistically high.

Two other cement companies agreed to the nationalization of their own Venezuelan units earlier this week. Paris-based Lafarge SA sold an 89 per cent share of its local unit for $267 million, while Zurich, Switzerland-based Holcim sold the government an 85 per cent share for $552 million. Both companies will stay on as minority partners.