Leroy N. Soetoro
2016-06-03 18:10:56 UTC
Since 2013, when Nicolas Maduro assumed presidency in Venezuela and
plunging oil prices began wreaking havoc on the country, more than a dozen
U.S. companies have been forced to sell, stop or reduce their operations
in the South American country in order to avoid damage cause by the
In the past three weeks alone, Coca-Cola announced that it had to stop
production in the South American country due to a scarcity of sugar, while
Bridgestone, a tire company based in Tennessee, decided to sell their
assets to local investors and Kimberly Clark, a paper product company
based in Texas, reduced its production by 90 percent.
At least 35 companies in the Standards & Poors 500 have expressed
concerns about Venezuela in the past two months and many have discussed
removing Venezuela from its global operations, according to an analysis by
That has left Venezuela, already reeling from empty supermarket shelves
and a lack of basic goods, with a dearth of American products.
The U.S. companies pulling out of Venezuela say they are feeling the
squeeze because of the countrys hyperinflation.
The company hasnt received dollars to import raw material since January.
About 700 workers had to be suspended. We dont know how much time we can
survive like this, Williams Bolivar, head of Kimberly Clark Workers
Union, told Fox News Latino.
Kimberly Clark headquarters are in Irving, Texas, and it produces paper-
based products like Huggies diapers, Scott toilet paper and Kotex for
Last year, the company reported a $460 million in losses due to currency
exchange problems in Venezuela. That caused a 4 percent reduction of its
global earnings and hurt its stocks value in Wall Street.
Since then, Kimberly and other major companies like Procter & Gamble,
Colgate, Ford, General Motors and Mondelez (Oreo) opted to remove
Venezuela from their global operations to avoid a direct impact on the
overall company's bottom line.
Thats an option to keep the brand in the Venezuelas market while
avoiding possible damage. But it obviously has consequences for the
company because the parent office refuses to do any investment or
innovations in the country. It also stops credit lines, a source from
inside the American-Venezuelan Trade and Industry Chamber, or Venamcham,
The chamber would not give an official statement.
The source added that these companies think that Venezuelas situation
could improve in the future.
This was always a great market for U.S. products because its an oil-rich
country where people like to buy quality brands, he said. Thats why
they are waiting.
But others already lost patience. Like Bridgestone, General Mills sold its
operations in Venezuela to local investors in March.
Mead Johnson, which makes infant formula, said Venezuela was its toughest
market. It blamed the Venezuela for its revenues falling 6 percent.
The unfavorable year-over-year comparison was mainly driven by tough base
comparisons in our two largest markets and affecting the quarter itself
are significantly reduced shipments to Venezuela," CEO Peter Jakobsen said
during a call to investors in April, according to USA Today. "The
company's Latin American sales were actually 7% higher if you factor out
Venezuela and currency effects We expect very limited sales in Venezuela."
Since 2013, when Maduro took power, at least eight multinational companies
have fled from Venezuela. Four are from the US: General Mills, Bridgestone
America, EFCO and Clorox.
The others are from Italy (Alitalia), Canada (Air Canada), Mexico (Gruma)
and the United Kingdom (Wonder). Just this week, Chile-based Latam, Latin
America's largest airline, announced it was suspending its flights to
Venezuela because of the "difficult macroeconomic scenario" affecting the
As the economic situation becomes worse, more could follow.
We know that other U.S. companies are negotiating with local investors,
the Venamcham source said.
The buyer of General Mills assets in Venezuela, a company call Lengfeld
Inc, is a relatively inexperienced firm and its owners have been linked to
the government by the local media.
The biggest problem for foreign companies is that the amount of dollars
circulating in Venezuelas economy has reduced dramatically since 2013,
prompting a further tightening of currency controls. Multinational
companies revenues remain hopelessly trapped in the local bolivar.
According to local firm Ecoanalitica, the government owes U.S. companies
more than $6 billion.
To get out of this crisis the government should sit and negotiate with
private companies to start producing. Other socialists presidents, like
Evo Morales in Bolivia, do it, said Alejandro Grisanti, one of the heads
But Maduros government is doing the opposite. Last week, they blamed 10
private companies for the countrys current shortages.
Alongside with Polar, the biggest Venezuelan company, the list included
five US firms: Cargill, Johnson & Johnson, Kimberly Clark, Colgate
Palmolive and Procter & Gamble.
His Omnipotence Barack Hussein Obama, declared himself "Pooptator" of all
mentally ill homosexuals and crossdressers, while declaring where they
Obama increased total debt from $10 trillion to $19 trillion in the seven
years he has been in office, and sold out heterosexuals for Hollywood
queer liberal democrat donors.
Barack Obama, reelected by the dumbest voters in the history of the United
States of America. The only American president to deliberately import a
lethal infectious disease from Africa, Ebola.
Loretta Fuddy, killed after she "verified" Obama's phony birth
Obama ignored the brutal killing of an American diplomat in Benghazi, then
relieved American military officers who attempted to prevent said murder
in order to cover up his own ineptitude.
Obama continues his muslim goal of disarming America while ObamaCare
increases insurance premiums 300% and leaves millions without health care.
--- news://freenews.netfront.net/ - complaints: ***@netfront.net ---