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>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>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>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>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>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>PARIS (Reuters) - Production of PSA Group’s Peugeot 308 compact car may suffer intermittent stoppages in coming weeks because of a shortage of gearboxes, the French carmaker said on Wednesday.

The production line assembling the 308 in Sochaux, eastern France, was disrupted for a second day before resuming work in the afternoon, company spokeswoman Karine Douet said.

A production bottleneck affecting the model’s new six-speed manual gearbox will gradually disappear as manufacturing of the gearbox ramps up at another PSA site in Valenciennes, northern France, Douet said.

“Given that this ramp-up will take a few weeks more, other temporary production stoppages or shift changes may occur in the factories,” she added.

PSA nonetheless expects “no impact on its sales volume for the second half”, Douet said.

Summer production slowdowns may also have affected the pace of gearbox production in Valenciennes.

As part of its response to the production hitches, PSA said it was drafting in workers from other French manufacturing sites.
Irish paper production and packaging firm Smurfit Kappa release a statement explaining that one of its production facilities was seized a week earlier on August 21 by the Venezuelan government and its managers were arrested, with the company accused of not setting their prices at government-approved levels and smuggling. It says that the government have taken over operation of the plant.