CARACAS, Venezuela, Thursday July 14, 2016 – The government of Venezuela says it has seized a factory owned by US firm Kimberly-Clark, the consumer products giant that produces Kleenex and Huggies.
According to President Nicolas Maduro, the American corporation violated Venezuela’s laws by suspending its operations in the South American country.
“Forty-eight hours ago, without notice, a US company called Kimberly-Clark, violating national laws and the constitution, fired almost 1,000 workers from its production plant, closed the door and left the country,” Maduro said on state television.
He added that the government would support the workers now in control of the plant.
For its part, Kimberly-Clark said it would shutter its Venezuela operations after years of grappling with soaring inflation and a shortage of hard currency and raw materials.
The Spanish-speaking nation’s deteriorating economic situation had made “it impossible to continue our business at this time,” the company said in a statement at the weekend.
“If the Venezuelan government takes control of Kimberly-Clark facilities and operations, it will be responsible for the well-being of the workers and the physical asset, equipment and machinery in the facilities going forward,” the Texas-based company added.
Speaking on state television, Labour Minister Oswaldo Vera said the plant in Aragua state would immediately be occupied.
“A company that closes is a company that will [be] occupied by its workers,” he declared.
Caracas’ move to reactivate Kimberly-Clark’s facilities on behalf of its workers follows a similar takeover in 2014 when Clorox Co. announced it was closing its doors.
A private supermarket chain and an electronic goods shop have also been seized in recent years after Maduro accused many businessmen of conducting an economic war in collusion with the country’s opposition.
General Mills, Procter & Gamble and other corporations have reduced operations in Venezuela as the country is gripped by economic crisis and widespread shortages of basic household goods.
Maduro has threatened to jail the owners of factories that stop production.
Bloomberg reports that the latest development is likely to add to shortages that have gripped Venezuela for the past few years after the ruling socialists capped the price on many consumer basics below production costs.
Desperate shoppers now routinely spend long hours queuing in front of stores to purchase essential products ranging from toilet paper to rice.
At the same time, companies face hefty losses on price-controlled goods, while the products are often sold on the black market for many times their shelf price.
There are now daily protests against shortages in Venezuela. More than 35,000 frantic shoppers flocked to Colombia in search of food at the weekend.
The ever-increasing opposition blames Maduro for wrecking the oil-rich economy and is seeking a referendum to remove him.
Reports on Tuesday indicated that the Venezuelan military would be enlisted to secure and distribute goods more efficiently in an attempt to alleviate the crisis.