Chavez orders takeover of Smurfit Kappa lands
“We need to remove Smurfit from every square meter in Portuguesa,” Chavez said during a phone conversation with his agriculture minister broadcast on state television.
“How long will they damage the land with those trees that dry out our rivers? We’re going to act faster, that’s an order I’m giving.”
Agriculture Minister Juan Carlos Loyo said Smurfit still operates on about 12,000 hectares of land between the central plains states of Portuguesa and Lara. Chavez seized 1,500 hectares of land from the Dublin-based paper products company in 2009. Smurfit’s eucalyptus plantations have dried sources of water for irrigation in Portuguesa that should be used to grow vegetables, Chavez said.
He didn’t specify whether the government is looking to seize all of Smurfit’s land holdings or some plots dedicated to tree farming.
Chavez, who is receiving chemotherapy treatment after having a cancerous tumour removed in June, continues to exercise his presidential duties and has called on followers to deepen his socialist revolution ahead of elections next year.
Smurfit’s shares fell slightly to €5.51 in Dublin having been down by more than 3% earlier. The company’s stock has fallen 26% so far this year.
The government has turned seized farm land over to cooperatives of community farmers in what Chavez says is social justice while critics of his policies say food production has waned amid the land grabs.
The Irish company said in its second-quarter earnings report that it began talks with the Venezuelan government in July regarding a plot of land.
“Venezuelan authorities have issued precautionary measures over a further 7,253 hectares of the group’s forestry land, with a view to acquiring it and converting its use to food production and related activities,” the filing said. “Management are in discussion with the authorities.”
Smurfit chief Gary McGann said in a November teleconference, that the risk of nationalisation had heightened after Chavez lost a two-thirds majority in the National Assembly and following the seizures of a unit of glass bottle-maker Owens-Illinois Inc and a fertiliser plant partly owned by Koch Industries.
The move comes as no surprise considering the government had already said it might seize more Smurfit Kappa land in Venezuela, Robert Eason, an analyst at Goodbody Stockbrokers in Dublin, said in a note to clients. “This event has been well flagged by the company’s management so it’s not a big issue. The important thing is that Chavez is not looking to get his hands on all of the production assets, just the forests.”
Venezuela represented about 4% of Smurfit Kappa’s revenue in the first three quarters of 2010 and 4% of total assets, the company said in November.
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