The new year came to a lively start with the capture of Nicolás Maduro, the president of Venezuela, by the US military on 3 January 2026. This is a column on the cement industry not geopolitics. Yet, the latter influences the former. There are implications here for the building materials sector that are worth discussing. Particularly regarding how states take over cement plants and what happens afterwards.
On Venezuela the first issue is what happens to the cement plants that were nationalised by the government in the late 2000s. The Chávez regime confiscated the Cemento Andino cement plant in 2006 from its owners, Colombia-based Cementos Argos. The government then formally expropriated the cement industry in 2008, taking control of plants run by Cemex, Holcim and Lafarge. Compensation was promised but this entered arbitration. Cemex, the owner of the largest number of plants, eventually reached an agreement in late 2011. The Venezuelan government paid US$600m in compensation and cancelled US$154m-worth of accounts payable from Cemex group subsidiaries to Cemex Venezuela. Subsequently, Cemex and Venezuela agreed to withdraw from the International Centre for Settlement of Investment Disputes (ICSID) arbitration process. Lafarge and Holcim reached deals in 2010. However, Holcim didn’t receive the final part of its compensation until 2014.
These agreements seem fairly clear-cut. Cement plants were taken, but the previous owners were eventually paid. However, this process started under duress. Two of the multinationals concerned, Cemex and Holcim, run major cement companies in the US. Nevertheless, these companies may benefit, should the US Trump administration decide it wants to change other parts of Venezuelan government policy in addition to the oil business. They may also want to lobby the current US government to take action in this direction. And, of course, the cement plants may re-enter the market if they are re-privatised. Subsequently, they may become available for merger and acquisition activity.
Cemex has form in this area as it also had similar problems in Cuba. It originally owned a cement plant in the country before it too was nationalised by the Castro regime. The Mexico-based company eventually let go of its formal interest in the business in the mid-1990s when the US introduced the so-called Helms-Burton Act, which targeted property confiscated by the Cuban government that had formally been owned by US citizens. The company told the US State Department at the time that it would "end its involvement with a confiscated American property in Cuba." Prior to this Cemex had formed a joint-venture with Unión de Empresas de Cemento in the early 1990s to create a company called Empresa Mixta Cementos Curazao (EMCC), which took control of the Mariel cement plant near to Havana. A decade later when relations between the US and Cuba thawed somewhat, Cemex’s CEO at the time, Fernando Gonzalez said that his company was still interested in returning to the country. Understandably though he expressed caution about this.
The point here is that Cuba, like Venezuela, is another left-leaning country in Latin America with a poor relationship with the US. Should the US government decide to take stronger foreign policy action here than it has previously there might well be implications for companies that historically used to own companies in Cuba.
Another relatively recent sector nationalisation in the region took place in 2010 in Bolivia. Here, the government took over a stake in Sociedad Boliviana de Cemento (SOBOCE) subsidiary Fábrica Nacional de Cementos (FANCESA) by supreme decree in 2010. SOBOCE and its shareholders subsequently fought for compensation. This one has been further confused by allegations of impropriety regarding how one of the private owners of SOBOCE originally obtained its share in the first place. Further controversy and disagreement followed when another shareholder, Mexico’s GCC, sold its share to Peru’s Grupo Gloria. Grupo Gloria filed an arbitration claim for US$260m against the Bolivian government in 2022.
Cement is an important commodity. Both it and the industry that manufactures it will always be of interest to governments in one way or another. Some of them may be tempted to take control of cement plants for strategic, economic, political, ideological or other reasons from time to time. And some of them may even do it! Disagreement, legal action and arbitration generally follow. In theory once an arbitration process finishes that should be the end of it. Yet interested parties may decide otherwise as the facts on the ground change. Corporate lawyers are likely to be watching the situation in Venezuela closely.
