Chavez completes takeover of O-I plants

By Rory Harrington

- Last updated on GMT

Officials and military personnel from the Venezuelan Government have officially taken control of O-I operations in the country on the orders of President Hugo Chavez.

The glass packaging giant said government authorities entered its plants at Los Guayos and Valera on October 28 to begin what it called the “transition process”. The firm said it would obey all national laws but that no agreement had been reached with the Chavez administration over compensation for the facilities.

As FoodProductionDaily.com reported last week, the emergency summit followed an announcement by President Chavez that he intended to appropriate all operations belonging to O-I in the South American country.

Supply concerns

O-I said the discussion took place at a meeting in Caracas with representatives from the Ministry of Science and Technology.

“Although we have not reached an agreement with the government, we will comply with the laws and directives we have been given. The safety and wellbeing of our employees is of the utmost importance to us,”​ said Al Stroucken, O-I Chairman and CEO.

The CEO also voiced his fears that the takeover and subsequent disruption in output for food processors in the country could affect the food supply to local industry. The firm’s operations in Venezuela are used almost exclusively for the domestic market.

“We also are concerned about the continuity of supply to customers in critical segments like food and beverage,”​ he said.

The firm stressed that it was co-operating fully with the Government but that it had concerns about the ability to manage the technical aspects of the operations.

“Glassmaking is a highly specialized, complex and technical industry, and we are concerned by government plans to manage the operations without having the appropriate level of expertise,”​ added the O-I chief.

A company spokeswoman said other than the meeting with the Ministry, O-I was not being kept up to date with developments through official channels.

“We are following the situation through the Venezuelan media,”​ she said. “The company is very concerned about the ability of Government representatives to operate the equipment in a safe and effective manner. We believe that a former O-I employee in Venezuela is advising officials on the technical aspects.”

Nationalise

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.

In March 2009, Chavez ordered the seizure of 1,500 acres of land owned by Irish packaging producer Smurfit Kappa Cartons. 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.

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