Venezuela’s Pequiven to cut costs to confront crisis

29 April 2009 22:25  [Source: ICIS news]

CARACAS (ICIS news)--Pequiven will cut costs by up to 40% this year due to the economic downturn, but assured the cuts would not affect investments for its long-term expansion plans, the Venezuela state petrochemical company said on Wednesday.

Calling 2009 “a difficult year,” company president Saul Ameliach said in a press release the company was freezing wages and reducing the salaries of executives by 20%.

However, the company’s ambitious expansion plans, referred to as the “Petrochemical Revolution,” will continue at its original timeline, he said.

To that end, Ameliach announced that just last week Venezuela’s National Development Fund and Venezuela-China Fund confirmed just over $1bn (€760m) in financing for a dozen planned projects.

The projects include a new fertilizer plant in Moron, an olefins plant at the Jose Petrochemical Complex and the expansion of a polyvinyl chloride (PVC) plant in Ana Mario Campos complex.

As oil prices fall, robbing the government of its mains source of income, Venezuela is increasingly looking towards Asia to finance its multi-billion dollar petrochemical growth plan. Earlier this month, Venezuelan officials visited Japan to secure $8bn in financing for its petrochemical industry.

By providing financing and increased marketing opportunities, private Japanese trading companies will gain access to Venezuela’s resources. Venezuela has also signed similar agreements with Iran and China.

($1 = €0.76)

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By: Jasmina Kelemen
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