Kellogg Co., citing the “deterioration” of a country in the midst of an economic meltdown, said Tuesday it was closing operations that employed 400 workers and produced the majority of the breakfast cereal consumed by Venezuelans.
“The current economic and social deterioration in the country has now prompted the company to discontinue operations,” the Battle Creek, Mich.-based company said.
Workers who arrived at the company’s plant in Maracay in central Venezuela found a communiqué from Kellogg’s saying it had closed. The government’s labor minister, Néstor Ovalles, then arrived at the plant, and told the workers the state would “ensure their rights and employment.”
Kellogg did not elaborate on what prompted it to leave Venezuela, but companies here face strict price controls, heavy red tape, hyperinflation, currency controls and a lack of machine parts. Many other major companies have fled as Venezuela’s economy has contracted by 40% in the last five years, including Kimberly-Clark, General Mills and companies that pump oil or service that industry.
An expanded version of this report appears on WSJ.com.
By Juan Forero
Source: Wall Street Journal via MarketWatch
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