Kellogg Shuts Down Cereal Plant in Venezuela

The company cites Venezuela's economic crisis but President Nicolas Maduro says the factory will continue production under worker control.
Matthew HellerMay 16, 2018

Venezuela on Wednesday reactivated a Kellogg plant under work control, a day after the cereal maker joined an exodus of U.S. companies from the crisis-wracked country.

Kellogg cited the “current economic and social deterioration” in Venezuela in announcing Tuesday the closure of its plant in the central city of Maracay. According to its website, the factory produces 75% of the breakfast cereals consumed by Venezuelans.

But President Nicolas Maduro called the closure “absolutely unconstitutional and illegal” and said the factory had been handed to workers and would continue cereal production.

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According to the governor of Aragua state, the plant employs 570 people. “I’ve taken the decision to deliver the company to the workers in order that they can continue producing for the people,” Maduro said.

Millions in Venezuela have been suffering food and medicine shortages amid hyperinflation, with, as Reuters reports, Maduro “blaming the crisis on an ‘economic war’ that he says is being waged by Washington, greedy businessmen and coup-mongers.”

In leaving Venezuela, Kellogg joined such companies as Clorox, Kimberly-Clark, General Mills, General Motors, and Harvest Natural Resources. In 2016, Venezuela took over a plant belonging to Kimberly-Clark, maker of personal hygiene products.

Maduro accused Kellogg of trying to sabotage his chances of getting re-elected in Sunday’s presidential vote. “We are four days away from elections and they think it will spook the people,” he said at a campaign rally. “Imperialists! Oligarchs! Nobody can scare our people.”

Kellogg has been producing cereal in Venezuela since 1961 and, according to The Associated Press, “the market had at one point been its biggest in Latin America after Mexico, although in 2016 it deconsolidated its Venezuela business from the company’s overall earnings results.”

“There has been a material change in the entrepreneurial environment, including a turn for the worse in our access to key materials,” the company said in announcing the closure.

It also said it hoped to return to Venezuela in the future and warned against sales of its brands “without the expressed authorization of the Kellogg Company.”

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