Ireland has protested against Venezuela’s seizure of a paper mill from Smurfit Kappa, the Dublin-based FTSE 100 company that is Europe’s biggest cardboard box maker.

The Venezuelan authorities took control of Smurfit Kappa’s plant last month after a state agency charged the company with price speculation and destabilising the economy. The government also detained two Smurfit managers.

Dublin has complained about the intervention in diplomatic representations to Caracas that it has made via EU channels, saying it is “extremely concerned” about the rapidly deepening crisis in the country as the socialist government of Nicolás Maduro battles some of Latin America’s worst hyperinflation.

Ireland has no embassy in Venezuela and its consulate there has closed so the matter is being handled by its ambassador to Mexico, Barbara Jones.

“The government is aware of recent worrying developments that have seen Venezuelan authorities take control of Smurfit Kappa’s business in Venezuela and detaining of two of its employees,” said the spokesperson for Simon Coveney, deputy premier and foreign minister. “The department of foreign affairs and trade has been liaising directly with the company. The situation is serious, volatile and deteriorating rapidly and we will continue to follow developments closely.”

Smurfit Kappa has vowed to protect the interests of its stakeholders and secure the release of its employees, saying nine out of 10 trade unions in the Venezuelan unit have “confirmed their support and desire to continue working with [THE BUSINESS]as a result of our good labour practices.”

But the company’s options are severely limited, and one expert questioned whether there is any prospect of a successful court action in Caracas to secure the return of a plant that employs 1,600 people.

“The judiciary in Venezuela, the last thing that they are is independent. So they will respond to everything that the executive wants or asks them to do,” said Dany Bahar, fellow at the Brookings Institution in Washington.“Whenever expropriations happen, it’s an action that’s consistent with the executive’s desperation to try to find money wherever it can...The business climate in Venezuela is [ONE]of thunderstorms with very dark clouds.”

Smurfit Kappa has refuted all claims against it by Sundde, the Venezuelan state price control agency that accused it of boycotting and smuggling after inspecting its factory for two days last month.

Charged with refusing to sell to certain local businesses, the company was also directed to adjust prices for all products.

In a statement, Smurfit Kappa said the authorities had taken “temporary control” of the business for 90 days.

As a result, the company was no longer “responsible for the use of its installations, machinery and equipment, its employees’ safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations.”

Mr Maduro devalued the Bolívar by 95 per cent last month in an attempt to arrest the collapse of the economy.

But David O’Brien, analyst at Goodbody stockbrokers in Dublin, said Smurfit had already taken a hit from previous devaluations that started in 2015. “Ultimately that has seen the [VENEZUELAN]business fall to less than 1 per cent of group earnings before interest, tax, depreciation and amortisation. It’s a relatively immaterial part of the business from a financial perspective.” – Copyright: The Financial Times Limited 2018 </s> DUBLIN, Aug 29 (Reuters) - Packaging company Smurfit Kappa Plc on Wednesday confirmed the temporary seizure of its Venezuelan plant by the government and the detention of two employees and said it would work to protect the interests of its stakeholders.

Venezuela's state price control agency Sundde on Aug. 21 announced that the government had seized the plant and two days later said two managers at the plant had been arrested.

Sundde said the people had been charged with price speculation, boycotting, destabilising the economy, and smuggling, and ordered the firm to immediately adjust its prices for all its products and accused the company of refusing to sell to certain local businesses.

Smurfit, which has operated in Venezuela since 1986, last week refuted all allegations which it described as without merit, but it did not immediately confirm the seizure or the arrests.

In its statement on Wednesday, Smurfit confirmed the government had taken control of Smurfit Kappa Carton de Venezuela for 90 days and said the company was making all possible efforts to secure the release of its two employees.

The company, it said, had always operated to the highest business and ethical standards and had developed a "highly progressive" Corporate Social Responsibility programme.

But it said it could not take responsibility for the use of its installations or its employees´ safety while the plant was in government control.

"In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders," it said. (Reporting by Sangameswaran S in Bengaluru and Conor Humphries in Dublin; Editing by Jane Merriman and Mark Potter) </s> Image copyright Mike Ellis / Smurfit Kappa

The Venezuelan government has seized control of a plant belonging to Smurfit Kappa, the Irish packaging company has confirmed.

On 21 August, the plant was seized and two managers were arrested.

Venezuela claims that Smurfit Kappa engaged in price speculation, smuggling and refusing to sell to local businesses.

It has demanded that the Irish firm immediately adjust all prices for its products.

The seizure of the plant will last for 90 days.

Smurfit Kappa said in a statement that it had operated its Venezuelan operations "to the highest business and ethical standards" in the almost 80 years it had been in the country.

"As a result of this action by the government of Venezuela, it is impossible for SKCV to manage its affairs in a way that complies with our normal business standards," said Smurfit Kappa.

"Consequently, as of 28 August 2018, SKCV is not responsible for the use of its installations, machinery and equipment, its employees' safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations."

The packaging firm said that it was making all possible efforts to secure the release of its two employees, and that it was fully committed to protecting the interests of its stakeholders. </s> Smurfit Kappa has confirmed that the Venezuelan Government has taken control of its factory in the country for 90 days, in a move has raised fears that the facility could be nationalised, or Smurfit ordered out of the country.

Smurfit Kappa has confirmed that the Venezuelan Government has taken control of its factory in the country for 90 days, in a move has raised fears that the facility could be nationalised, or Smurfit ordered out of the country.

The confirmation from Smurfit comes a week after the government occupied a factory and ordered the Irish company to cut prices.

In addition, the government of Venezuela late last week arrested two Smurfit Kappa managers.
• None Read more: Two Smurfit Kappa managers arrested in Venezuela

The two arrested, who are understood to be local Venezuelan employees of the Irish firm, were arrested for allegedly engaging in what were described by authorities of the leftist and increasingly authoritarian regime as "crimes of speculation, boycott, extraction contraband, destabilising the economy, and corruption".

In a statement today Smurfit Kappa said that as a result of the Government action, it was "impossible" for the business to manage its affairs in a way that complies with is normal business standards.

"Consequently, as of 28 August 2018, Smurfit Kappa is not responsible for the use of its installations, machinery and equipment, its employees’ safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations."

The company went on to say that it was making all possible efforts to secure the release of its two detained employees.

The Irish Independent understands that no Irish employees work at the factory.

Last week Venezuela's government ordered the temporary occupation of a Smurfit Kappa carton production unit in Carabobo state for alleged abuse of a dominant position.

Smurfit Kappa told the market last Thursday that it "entirely refutes" the allegations made against it.

"The group has operated in Venezuela since 1986 to the highest business and ethical standards," Smurfit Kappa said, adding that the Venezuelan subsidiary of which the factory is part represented less than 1pc of its earnings before interest, tax, depreciation and amortisation in the first half of 2018.

Nine of the ten company unions last week confirmed their support and desire to continue working with Smurfit Kappa. </s> The Venezuelan government has temporarily taken over the paper packaging manufacturer Smurfit Kappa Group’s subsidiary, Smurfit Kappa Carton de Venezuela (SKCV) in Valencia, and arrested two of its managers after complaints about prices being charged by the company for its products.

Price control agency Sundde said that the authorities arrested two managers of the Irish company, which has been operating in the South American country since 1986, for alleged price speculation, boycotting, destabilizing the economy, and smuggling.

The government said that the company was ordered to begin price adjustments immediately for all its products after several members of the workforce had submitted multiple complaints.

Accusing Smurfit Kappa of abusing its dominant market position by refusing to sell to some local businesses, Sundde said that the company’s Carabobo site, which produces cardboard, affected national producers due to its prices.

Meanwhile, the group refuted the allegations, saying that they lack merit and that it is committed to the economically-stricken country, which is witnessing economic freefall and recording hyperinflation. Prices have doubled every four weeks so far in 2018, forcing many of the citizens to go hungry or flee the country.

In a statement, Smurfit Kappa said: “Following two days of inspections by the Venezuelan government at the group’s subsidiary, Smurfit Kappa Carton de Venezuela (SKCV), a number of allegations have been made against SKCV. The group entirely refutes these allegations and believes them to be without merit.

“The group has operated in Venezuela since 1986 to the highest business and ethical standards. Smurfit Kappa will continue to monitor the situation closely.”

It said that the South American unit, which employs about 1,900 people, represented less than 1% of the group’s earnings before interest, tax, depreciation and amortization (EBITDA) in the first six months of 2018, and that its shipments from this plant decline by 18% during this period.

Sources also rejected reports of claims from union officials that the company gave employees paid holidays in July instead of keeping them at work.

The government has recently devalued the bolívar by 95% to curb hyperinflation of annual rate of 80,000%. The International Monetary Fund has predicted the hyperinflation to touch one million percent before the end of 2018. </s> Aug 29 (Reuters) - Packaging company Smurfit Kappa Plc said on Wednesday the Venezuelan government had taken temporary control of its Venezuelan business for 90 days.

The company said as a result of this action by the Venezuelan government it was impossible for Smurfit Kappa Carton de Venezuela to manage its affairs in a way that complied with its normal business standards.

The company also said Venezuelan government had detained two of its employees. “We are making all possible efforts to secure their release,” Smurfit Kappa said. </s> The Venezuelan government has seized control of paper packaging company Smurfit Kappa’s operations in the crisis-hit country for alleged price fixing.

Smurfit Kappa, which is listed on the FTSE 100, has been operating in Venezuela for nearly 80 years and employs 1,600 staff there.

It has denied the government’s accusations and stated that, as a result of the actions, it would not be held responsible for its operations in the country while under state control, which the government has said is temporary and would last for 90 days.

Two of Smurfit Kappa's local managers in Venezuela have also been detained.

Venezuela’s economy is in turmoil and hyperinflation, power cuts and severe food shortages... </s> Venezuela’s socialist government has seized control of packaging firm Smurfit Kappa’s operations in the country and detained two employees over allegations including price fixing and destabilising the economy.

Venezuela’s socialist government has seized control of packaging firm Smurfit Kappa’s operations in the country and detained two employees over allegations including price fixing and destabilising the economy.

Smurfit said in a stock market announcement that its subsidiary Smurfit Kappa Carton de Venezuela (SKCV) will be under government control for the next 90 days.

The list of charges the company faces includes price fixing, speculation, boycott, corruption and destabilising the nation’s economy, according to a Venezuelan government website.

It follows a two-day inspection of SKCV.

All the allegations are entirely refuted by Smurfit.

“In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders,” the company said.

SKCV represented less than 1% of the FTSE 100-listed packaging company’s earnings in the first six months of 2018.

Smurfit said that it is “impossible” for SKCV to manage its affairs or guarantee business standards compliance from Tuesday onwards.

“SKCV is not responsible for the use of its installations, machinery and equipment, its employees’ safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations,” said Smurfit.

Smurfit also said that it is “making all possible efforts” to secure the release of the two employees who have been detained by the government.

Shares in Smurfit Kappa were down 1.5% on Wednesday afternoon. </s> General Motors said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia and vowed to "take all legal actions" to defend its rights.

The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many US companies.

"Yesterday, GMV's (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities," the company said in a statement.

It said the seizure would cause irreparable damage to the company, its 2,678 workers, its 79 dealers and to its suppliers.

Venezuela's Information Ministry did not immediately respond to a request for information.

Venezuela's car industry has been in freefall, hit by a lack of raw materials stemming from complex currency controls and stagnant local production, and many plants are barely producing at all.

In early 2015, Ford Motor Co wrote off its investment in Venezuela when it took an $800 million pre-tax writedown.

The country's economic crisis has hurt many other U.S. companies, including food makers and pharmaceutical firms. A growing number are taking their Venezuelan operations out off their consolidated accounts.

Venezuela's government has taken over factories in the past. In 2014 the government announced the "temporary" takeover of two plants belonging to U.S. cleaning products maker Clorox Co which had left the country.

Venezuela faces around 20 arbitration cases over nationalizations under late leader Hugo Chavez.
Ireland protests in response to the Venezuelan government seizing a Smurfit Kappa production plant, with Dublin liaising through its Mexican embassy to secure its return and the release of imprisoned managers.