Money crisis imperils Venezuela plastics - executive

11 June 2009 23:24  [Source: ICIS news]

HOUSTON (ICIS news)--The Venezuelan government’s control on hard currency is paralysing the nation's plastics industry, according to comments made on Thursday by the Venezuelan Association of Plastic Industries (AVIPLA).

AVIPLA president Carlos Celis urged the national government to tackle the currency crisis to avoid the suspension of operations at a number of plants. Celis made his comments earlier this week during an interview with television station Globovision.

"We think it is important that the government be aware of how crucial it is for Venezuela that companies gain access to currency markets, because we are talking about more than just food.” Celis said.

“Even when meat or rice imports are normal, the consumer will not get the product if we cannot produce the packaging,” he said.

“We are reaching a critical point because the assignment of hard currencies has been paralysed for some time,” he said.

For several months, the plastic industry had not received hard currencies for imports, Celis said. As a result, companies are starting to have operational problems.

“This could bring a crisis in the short term,” he said.

AVIPLA members were already in talks with state petrochemical producer Pequiven to get the company to import the needed raw materials. Pequiven is not subject to the rules that private companies must follow.

A decrease in petroleum revenues caused CADIVI, the government agency that allocates currencies for imports, to drastically reduce the number of dollars sold to companies or individuals for imports. This has caused a number of shortages in Venezuela.

Another problem was that the official US dollar value had been fixed at bolivares fuertes (BsF) 2.15 while the US dollar sells in the black market at an average of BsF6.52, according to a website that tracks the value daily.

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By: George Martin
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