Guardian’s Venezuela Plant: One Year Later (Part 2)

In early September 2016, a month after Venezuela’s military seized Guardian Industries’ float glass plant there, the company issued a statement saying the socialist government of President Nicolas Maduro had used a routine maintenance shutdown of the furnace as the pretext for taking it over.

Venezuela claimed it occupied the plant because Guardian had “abandoned” it as part of a U.S.-led “economic war” against the country.

While questions about the state of the plant’s production capacity figured prominently in last year’s takeover, it’s unclear how much it’s been operating since that time — or if it’s even been making glass at all.

In Part 2 of USGlass’ look at the one-year anniversary of the plant seizure, we examine contradictory evidence from online postings and social media to try and figure out what’s going in a country where accurate information is difficult to come by.

A Warning Unheeded?

Last September, Guardian said it warned Maduro’s government that it could be creating a dangerous situation for employees and the community if it continued making glass at the Maturin plant without finishing the maintenance work. So was it ever finished? It’s impossible to tell.

However, in November 2016, a worker at the factory told USGlass that the facility was “a shell of itself.” He said no glass was being produced, though he indicated that the workers were keeping the float line and furnaces up and running. (USGlass didn’t identify the worker because of safety concerns.)

This tweet from November 2, sent to the host of a popular pro-government TV show in Venezuela, said “it is urgent to reactivate the glass plant GUARDIAN OF VENEZUELA S.A., located in Monagas, in case we run out of flat glass.” USGlass research indicated that the man who sent the tweet appears to be involved with a silica mining company in Venezuela. Silica is a key ingredient in glass manufacturing.

In late January, a tweet was posted by a pro-government account that included video of trucks carrying flat glass out of the Maturin plant. It was unclear if the glass had been produced recently or was part of stock that was already on hand; photos taken inside the plant after the takeover in 2016 and shared on social media showed hundreds of large lites of glass stacked in a storage area.

In February 2017, the government claimed it was restarting operations at the facility under the direction of Venvidrio. That’s the state-run glass conglomerate formed in 2010 when the Venezuelan government seized two bottle-making plants run by a U.S. company, Owens-Illinois. Previously, Maduro’s regime had turned the plant over to the firm’s workers, who were to operate it under government supervision for one year.

Venvidrio: Dead or Alive?

In March, a report from independent Venezuelan newspaper El Carabobeno said that Venvidrio was on the brink of bankruptcy. According to the report, 90 percent of Venvidrio’s operational capacity was paralyzed at its main plant in Los Guayos. The furnaces used to make glass for bottles were damaged by the improper use of materials from the former Guardian de Venezuela factory in Maturin, according to the report.

However, a government press release later that month claimed the company was operating normally, and that the former Guardian facility was up and running.

Venvidrio president Ghimi Santini, who is also a brigadier general in the Venezuelan army, said the factory was at its “maximum operative capacity.”

“Currently the plant is operational, meeting the demand of the national market,” he said, according to a government press release. “That makes us fluctuate our level of production, depending on the demand.”

He also said Venvidrio is putting its products on the regional market.

“We are currently exporting our products to Central America, the Caribbean and Colombia,” he said. “We are in an aggressive plan for exports and at the same time importing substitutions for the inputs we need.”

Last week, workers took part in a carefully stage-managed celebration of the government’s seizure of the plant, so it seems to be operating at some level. However, based on images from social media, only 80-90 workers appeared to be present for the ceremony at a facility that once employed 250 people and produced 450 metric tons of glass per day.

Inefficiency and Corruption

While Venvidrio’s management of the plant indicates that the government is serious about ramping up flat glass production, it’s not clear how well the company will perform. State-run businesses in Venezuela have a poor track record, according to a recent study.

Transparency International, a German anti-corruption organization with offices in more than 100 countries, says 70 percent of the 511 companies that are run by Venezuela’s government are losing money.

“We started this study because nobody really knows how many companies the state is running,” Mercedes De Freitas, the director of the Venezuelan branch of Transparency International, told the Miami Herald. “The state has invaded every sector imaginable.”

The number of state-run businesses in Venezuela dwarfs its neighbors in South America, the group told the newspaper. Brazil has about six times the population of Venezuela but only has 130 state-run businesses. Argentina, which is a third larger than Venezuela, has just 52.

Transparency International also rated Venezuela as one of the most corrupt nations in the world in its 2016 Corruption Perceptions Index. It’s ranked No. 166 out of 176 countries surveyed, and it has the worst record in all of the Americas.

With that record, it’s possible that corruption is going on at the Maturin plant.

For example, this tweet, from a man in the glass and metal industries who identifies himself as a “socialist entrepreneur” who is “profoundly” pro-government and anti-imperialist, was recently sent to a Venezuelan government agency that tracks “economic crimes” such as “usury, boycott and hoarding.” The tweeter urges the agency to look into the former Guardian plant, though he doesn’t say why.

“But, if I had to guess — having reported from these kinds of countries — the government-installed managers are probably stealing the place blind and selling scarce glass to those who can pay,” says William Nicholson, a former journalist for The Associated Press who worked for many years in South America.

William Nicholson, a former foreign correspondent and bureau chief for The Associated Press in Latin America, translated sources cited in this story.

This article is from USGNN™, the daily e-newsletter that covers the latest glass industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to USGlass magazine in print or digital format are available. Subscribe at no charge Sign up today.

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