Chávez plans to nationalise O-I bottling plant

By Helen Glaberson

- Last updated on GMT

Related tags Beverage can Brazil Crown

Venezuelan leader Hugo Chávez has announced his intentions to take over the local unit of US bottler Owens-Illinois (O-I), as part of ongoing attempts by the government to nationalise parts of the country’s food processing sector.

“As of this morning, we have not heard directly from the government,” ​said Al Stroucken Chairman and CEO of O-I. “We learned the news as many others did, through television reports. We’re prepared to work with government officials to better understand the situation. In the meantime, we’re focused on continuing safe operations in the interests of our people and our customers.”

During almost 12 years in office, the Venezuelan leader has attempted to nationalise a string of local corporate subsidiaries in what he claims is a bid to relieve poverty.

Chávez nationalised a large Italian-owned fertiliser factory and a Venezuelan motor lubricants group following last month’s election which left the socialist leader’s party with a reduced majority in parliament.

In March 2009, Chávez ordered the seizure of 1,500 acres of land owned by Irish packaging producer Smurfit Kappa Cartons. The government said it would use the land for “more rational” crops such as yucca and beans but would pay compensation to the company.

Last year the leader also announced government plans to copy packing technology developed by packaging giant Tetra Pak, in a bid to cut back on imports and reliance on foreign companies.

In March 2009, the president nationalised a rice plant owned by a subsidiary of Cargill, on the grounds that it did not produce price-controlled basic rice.

Producing bottles and jars in Asia, Europe and the Americas, Owen-Illinois claims to be the world’s largest maker of glass packaging. The company’s two plants, located in Los Guayos and Valera, employ more than 1000 people and represent less than five percent of the company’s global operating profit.

Crown’s fourth Brazilian investment

Other corporate developments in South America include metal packaging supplier Crown. yesterday announced plans to invest in its fourth can plant in northern Brazil.

Crown’s Brazilian subsidiary Crown Embalagens will build the new facility to meet the growing demand for beer and soft drink cans, producing two-piece aluminum cans in multiple sizes and expanding the company's annual production capacity in the country to 7.5bn cans.

Expected to be operational in the fourth quarter of 2011, the plant will initially have one line with an annual capacity of 1bn cans per year but will be designed to support additional production lines as future market needs require.

Raymond L McGowan, president of Crown's Americas Division commented that Brazil experienced double-digit growth for beverage cans in 2010. He said: "As we look ahead to the 2014 FIFA World Cup and the 2016 Summer Olympic Games, both of which will be held in Brazil, Crown is well positioned to grow to meet demand."

Crown has been operating in Brazil since 1942 and has a strong presence with two-piece aluminum beverage can plants in Cabreuva, Estancia and Ponta Grossa and a beverage end plant in Manaus.

Related news

Show more

Follow us


View more