Venezuela nationalises cement industry

On Thursday, April 3rd, Venezuelan president Chávez announced the nationalisation of the main companies in the cement sector in Venezuela. He explained how 75% of the sector is controlled by three multinational companies that use their monopoly position to fix artificially high prices. He explained how these companies pay ridiculously low prices for the raw material, limestone, and then sell cement at “inflated prices”.

“One of the problems”, explained Chávez, “is that many times here we’ve had to stop the house building plans because there is not enough cement, and they also sell it very expensive”, despite the fact that “the raw material, which belongs to us, is very cheap”. Furthermore, added Chávez, “these companies export cement abroad, when we need it here to build houses, universities, Bolivarian schools, roads, etc.”

The three companies that control cement production in Venezuela are Mexican Cemex, with about 50% of the market, the world’s largest cement producer, French Lafargue, with 15%, and the Swiss Holcim, the world’s second producer, with another 15%.

According to Venezuelan workers in the sector, these companies export a large part of their production; this is particularly the case with CEMEX. Some estimates put the percentage of exports at more than 50% of production. In order to keep prices up, they also produce below capacity, making huge profits in the process.

Last year, the Venezuelan government already nationalised Cementos Andinos, a Colombian owned cement producer in Merida. Following an appeal by Chavez, workers in this company, who fought long and hard for nationalisation, have organised a “Socialist Factory Council” to run the company.

They welcomed Chavez’s announcement: “This measure will recover our sovereignty and we will put the industry at the service of the people, to develop a state policy of house building without allowing a multinational to decide in its own interest above the interests of the people”, said Alexander Santos a leading member of the union at Cementos Andinos and spokesperson of its Socialist Factory Council.

He added: “For years, in our country this industry has been controlled by the multinationals. Currently Cemex, Lafargue and Holcim, own about 80% of the national cement production. They exploit Venezuelan limestone mines where they get raw materials at less than 4 cents of a dollar per tonne. They also use a lot of contract and subcontracted labour, workers who have fewer rights and benefits, in order to increase their massive profits. The profit rate in this sector is 70 to 75%”.

After the nationalisation of Cementos Andinos, all workers were incorporated into the workforce with equal collective bargaining rights and conditions, putting an end to the casualisation of labour.

As soon as the measure was announced, the Mexican authorities came out in defence of Cemex. Economy Minister Eduardo Sojo declared: "Without a doubt we must defend with all means at our disposal the rights of Cemex, a world leader in the production of cement".

It should not really surprise us that the right-wing and illegitimate government of Calderon in Mexico rushes to the defence of Mexican capitalists. The owner of Cemex, Lorenzo Zambrano, has a long track record of making money with the support of the Mexican government. He benefited from the infrastructure policies of the Salinas government, made a killing from sales of bankrupt companies which had been taken over by the government, refloated them and then gave them away to the private sector, and also had close connections with the right wing government of Vicente Fox.

In exchange for financial and political support, the government maintained a policy of high tariffs on the import of cement that benefited Cemex, which went on to control 90% of the Mexican market. With the massive profits it made by selling overpriced cement for public works, Zambrano went on to build up a massive worldwide empire, with interests in Europe (where he took over the British RMC), Asia and Africa. In the process he became one of the wealthiest men in Mexico and entered the Forbes list of the world's richest multimillionaires.

He is an important figure in Mexican capitalism, serving on the boards of IBM, Alf, Banamex, FEMSA, Televisa, Citigroup and Vitro, all companies which campaigned hard for Calderon against left-wing candidate Lopez Obrador in the Mexican elections, and some would say helped organise the electoral fraud which brought Calderon to power.

A few days after the announcement by Chávez, the way in which the nationalisation would take place became clearer: the state would buy up 60% of the shares and would offer the multinationals the possibility of keeping the remaining 40%, as was the case in the Orinoco oil belt nationalisation.

There would be enough arguments for nationalisation without compensation, if one was to look at the amount of profits these companies have made in Venezuela, benefiting from cheap raw materials which belong to Venezuela, and how little they have invested in developing these plants from a technological point of view.

Nevertheless, this measure, which accompanies the nationalisation of a dairy plant in the Andean region and now the nationalisation of SIDOR, is clearly to be welcomed by revolutionaries and socialists. It will encourage the workers in other companies to struggle; it will make them more confident in raising their demands for nationalisation. Clearly, the workers at Cemex, Lafargue and Holcim should follow the example of their comrades at Cementos Andinos and set up Socialist Factory Councils to start exercising workers’ control, to demand better wages and conditions, proper health and safety regulations and above all an end to the casualisation of labour.

Nationalisation in itself is not a panacea. Only if the workers and the Venezuelan people as a whole exercise democratic control and plan the economy for the benefit of the majority of the population, can the conditions of the majority improve. For many years there was a state owned cement industry in Venezuela, as well as state ownership of other basic industries, and this only led to the development of a massive bloated bureaucratic layer only interested in their own inflated salaries.

The only way in which the Venezuelan cement industry can be used effectively to solve the urgent problems of infrastructure and housing that the majority of Venezuelans suffer is by integrating it into a democratic plan of the economy based on the needs of the majority and not the private profits of a minority. The nationalisation of cement is a step forward but needs to be completed with the public ownership of the main monopolies and sectors of the economy under democratic workers’ control.