Venezuela to take over top foreign cement companies

By Enrique Andres Pretel

CARACAS (Reuters) - Venezuela will take a majority stake in top foreign cement companies' assets in a renewed nationalization drive, the government said on Monday, a move expected to reinforce a tough climate for foreign investment in the oil state.

The socialist government will take over at least 60 percent of the local units of Mexico's Cemex, France's Lafarge and Switzerland's Holcim, in a scheme similar to the takeover of oil projects in 2007.

The move, which comes despite the companies previously agreeing to limits on their activities, is likely to worry investors already nervous after a string of nationalizations last year and warnings against the food, steel and banking sectors.

The three companies are the world's top cement makers and dominate Venezuela's cement industry. The nationalization will leave a few small domestic cement companies in private hands.

Oil Minister Rafael Ramirez fleshed out a plan, first announced last week, to put the state in charge of the industry after meeting with officials from the three companies.

"We are sure that in the very short term we can progress in this negotiation with these companies, which will be done bilaterally with each one of them," Ramirez told state television.

Despite the Mexican government's condemnation of the move, Cemex said it was open to talks with Venezuela to reach a mutually acceptable solution over the nationalization.

President Hugo Chavez nationalized telecom and electricity companies last year with the goal of lower prices and extended coverage in poor neighbourhoods.