A plant that is owned by American cereal manufacturer Kellogg has been seized by the authorities of Venezuela.
This move by the government was apparently undertaken after the American company announced that it would end its operations in Venezuela and would be moving out of the market because of the ever worsening economic condition in the country.
The closure announcement by the company was described as "absolutely unconstitutional and illegal" by Venezuela’s president Nicolas Maduro. He had earlier thrown accusations against the U.S. of carrying out an economic war against the country and his government.
The factory would continue to manufacture products as and would be run by the workers, he announced.
The plant authorities had earlier prevented workers from entering the plant located in the central city of Maracay, on Tuesday, the workers had earlier alleged.
The country is hold presidential elections on Sunday and the announcement comes days before that
"We've begun judicial proceedings against the business leaders of Kellogg's because their exit is unconstitutional," Mr Maduro told cheering supporters in the central state of Carabobo.
"I've taken the decision to deliver the company to the workers in order that they can continue producing for the people."
Ever since the dramatic fall in the global oil prices in 2014, the economy of Venezuela has bene tottering with a sharp decline in oil production - the mainstay of the economy, and a rate of inflation that has spiraled out of control and is the highest in the world, aided by a rock bottom value of its currency – the bolivar.
Strict governmental control over business activities, a shortage of raw materials locally and an astronomical inflation rate have been the factors that have driven a number of multinational out of the country and Kellogg is the latest in the list of such multinational. There are also other multinationals that have drastically reduced their operations in the market.
The U.S. company expressed that it would be able to return back into the country in the near future but also issued warning against selling of its brands "without the expressed authorisation of the Kellogg Company".
In a similar move, the manufacturing unit of U.S. based hygiene producer Kimberly-Clark was also seized by the Venezuelan government in 2016 after the company had announced the closure of its businesses in the country due of an absolute absence of raw materials.
The Texas-based firm has recently requested the start of arbitration proceedings against Venezuela at the World Bank.
An "economic war" being waged by foreign governments and businesses has been cited to be the main reason behind the economic debacle in the country according to president Maduro. He has been ruling the country since 2013. Conversely, the president has bene accused of gross mismanagement of the economy for its present condition.
(Source:www.bbc.com)
This move by the government was apparently undertaken after the American company announced that it would end its operations in Venezuela and would be moving out of the market because of the ever worsening economic condition in the country.
The closure announcement by the company was described as "absolutely unconstitutional and illegal" by Venezuela’s president Nicolas Maduro. He had earlier thrown accusations against the U.S. of carrying out an economic war against the country and his government.
The factory would continue to manufacture products as and would be run by the workers, he announced.
The plant authorities had earlier prevented workers from entering the plant located in the central city of Maracay, on Tuesday, the workers had earlier alleged.
The country is hold presidential elections on Sunday and the announcement comes days before that
"We've begun judicial proceedings against the business leaders of Kellogg's because their exit is unconstitutional," Mr Maduro told cheering supporters in the central state of Carabobo.
"I've taken the decision to deliver the company to the workers in order that they can continue producing for the people."
Ever since the dramatic fall in the global oil prices in 2014, the economy of Venezuela has bene tottering with a sharp decline in oil production - the mainstay of the economy, and a rate of inflation that has spiraled out of control and is the highest in the world, aided by a rock bottom value of its currency – the bolivar.
Strict governmental control over business activities, a shortage of raw materials locally and an astronomical inflation rate have been the factors that have driven a number of multinational out of the country and Kellogg is the latest in the list of such multinational. There are also other multinationals that have drastically reduced their operations in the market.
The U.S. company expressed that it would be able to return back into the country in the near future but also issued warning against selling of its brands "without the expressed authorisation of the Kellogg Company".
In a similar move, the manufacturing unit of U.S. based hygiene producer Kimberly-Clark was also seized by the Venezuelan government in 2016 after the company had announced the closure of its businesses in the country due of an absolute absence of raw materials.
The Texas-based firm has recently requested the start of arbitration proceedings against Venezuela at the World Bank.
An "economic war" being waged by foreign governments and businesses has been cited to be the main reason behind the economic debacle in the country according to president Maduro. He has been ruling the country since 2013. Conversely, the president has bene accused of gross mismanagement of the economy for its present condition.
(Source:www.bbc.com)
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