Mexico’s cement overshoes

Ever have one of those days when everything you hear and see just somehow seems…off? Well, I must be having one of those days. Because look what I found that’s just so skewy and screwy:

Mexico yesterday condemned Venezuela’s planned nationalization of the cement industry, which will affect Cemex, a major Mexican company.

“We can only condemn this action,” Finance Minister Agustín Carstens said in the city of Acapulco.

“The property and rights of Mexicans are not being respected,” by the leftist government of Venezuelan President Hugo Chávez, Carstens said.

See what I mean by off?

The fact that this nationalization drive will only affect a small, inordinately wealthy number of Mexicans, and deprive none of them of property or rights, is somehow completely out of the picture here. When Chavecito announced his plans, he also made clear that he will compensate Cemex (note that it is a private company, and not the entire nation of Mexico!) “right down to the last cent” for equipment and buildings that used to be property of the Venezuelan state, which are all that’s being nationalized–or rather, re-nationalized.

Yes, that’s right: He’s buying back what used to be Venezuela’s, on behalf of Venezuela. He’ll be paying fair market value for all of it. And this infringes on Mexicans’ property and human rights how?

Well, here’s how. It’s lame, but what the hell:

Cemex is the largest domestic supplier of cement and ready-mix concrete in Venezuela, with annual cement production capacity of 4.6 million tons and 33 ready-mix plants, according to its Web site. A local subsidiary, Cemex Venezuela SACA, had a market value of 1.18 billion bolivars ($547 million) at the start of trading Friday.


Venezuela’s contribution to Cemex’s profit has declined since Cemex purchased Australia’s Rinker Group Ltd. for $14.2 billion in July, said Marcelo Telles, an analyst with Credit Suisse in Mexico City. Cemex’s operations in Venezuela account for less than 5 percent of the company’s earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as Ebitda, he said.

Venezuela is a market Cemex would like to hang on to, Telles said, because profit margins are higher than its operations in the United States or Europe. The terms of having to sell to the Venezuelan government may not be favorable, he said.


Cemex’s three Venezuelan cement plants had 45 percent of the market in 2007.

Aha. So, it’s all about profit and market share, as usual. Apparently, Cemex has the “right” to gouge Venezuelans in an effort to recoup what it ain’t making elsewhere, if I’m reading this correctly. Venezuelans have been paying through the nose for Cemex’s greed and its lower profit margins elsewhere–which it fed using former property of the state of Venezuela. Lovely, isn’t it?

But now that’s all about to change. Poor Venezuelans, who are still being forced to live in dirt-floored hovels, according to the redoubtable Francisco Rodriguez, will now finally get proper housing, because cement nationalization will make it possible.

So, what rights and what property are being taken away from Mexicans, again? The right to claim the #3 biggest cement company in the world without any benefit to the common people whatsoever? Wow, bring on the trickle-down. And bring it on in a cement mixer!

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