What a surprise. The nationalized cement company formerly known as Cemex – now Cementos de Venezuela – is strapped for cash. With cement prices fixed by administrative fiat, the company can’t generate the cashflow it needs to pay workers and suppliers and meet demand for the government’s newly discovered housing crisis. The result, on top of stagnating production, has been serious labour trouble.
Ex-Lafarge, (now Fabrica Nacional de Cementos) is not doing much better, by the way. Their equipment is getting pretty old, but strapped for cash, capital improvement is one of the easier money-saving strategems…at least for the short run. Now, having pushed their machinery to breaking point, they’re both out of money and facing interminable delays getting import permits and Cadivi dollars to upgrade their physical plant.
Except, remember, these days housing is the government priority, Chávez having belatedly recognized that the long festering shortage is now a major political problem for him, and one that’s been getting worse year after year since 1999, as home-building has never come close to keeping up with fast-growing population numbers. So the government really, really needs cement now.
Which way do you figure this cookie’s gonna crumble?
It’s too obvious, and too depressing. Ex-Cemex and Ex-Lafarge are going to end up hitting up the treasury for an emergency cash infusion. And, under pressure from Gran Misión Habitat (or whatever it is they’re calling their latest doomed foray into the sector), the Finance Ministry is going to find it politically impossible to say no.
And so, the infernal logic of using Bs.6 worth of lemons to make Bs.5 worth of lemonade marches on triumphant. A little bit more of the oil revenue stream that might have gone to the things the public sector does well and the private sector does badly will go instead to something the public sector does badly and the private sector does well.