Venezuela’s National Cement Production up 10% in 2011

Mérida,  January13^th 2012 (Venezuelanalysis.com) – Venezuela produced 7.79 million tonnes of cement in 2011, an increase of almost 10% from 7.1 million tonnes in 2010, the Venezuelan Minister of Industries Ricardo Menendez confirmed this week.

The increase reflects “the effort of the workers and the direction of the revolutionary Government,” Menendez declared, citing state investments of US $600 million last year in Venezuelan’s nationalised cement industry.

The figures come amid government attempts to increase national cement production in order to meet the needs of the new mass housing program the “Great Housing Mission” (GMV), launched in April last year. 144,000 new houses were built under the program in 2011.

Menendez announced that at least 2.1 million tonnes of the cement produced in 2011 are destined for the GMV, whose goal is to build 200,000 homes in 2012. Venezuela also aims to cumulatively increase cement production by 27% each year, to 11.54 million tonnes by 2013, following an announcement by industries ministry official Raul Pacheco last Sunday.

Guaranteeing the National Supply of Cement

The Venezuelan government introduced price controls on cement in 2003 and nationalised the cement industry in 2008 in order to boost production and guarantee supply for domestic construction needs.

However, in the context of a severe drought in 2009 affecting Venezuela’s hydroelectric energy supply, and a six-quarter recession over 2009 – 2010, including a 7.2% contraction in the construction industry, national cement production fell by 10% in 2010, from 7.9 to 7.1 million tonnes.

Opposition-oriented media sources blamed the government for the fall in cement production, citing unrealistic price controls and lack of investment as the problem.

Meanwhile, the government has accused private hoarders and price speculators for creating shortages and affecting the supply of nationally produced cement.

To address both the fall in production and hoarding and speculation, in 2011 the government invested US $600 million in the industry, raised the regulated price of cement, and announced a new national distribution system of cement from nationalised factories.

Although cement production rose in 2011, conservative newspaper El Universal reported last Saturday that “construction sector sources” still complain of an uneven cement supply in areas of public and private construction as a result of the prioritisation of cement to the GMV.

Menendez argued that before Venezuelan cement was nationalised the majority was exported rather than used for domestic construction needs, whereas now “all the cement stays in Venezuelan territory. We the Venezuelans are the owners of this cement and have the capacity to invest it in line with our country’s production”.

He also stated that per capita consumption of cement (300kg per person) is 50% higher now than before nationalisation.