Venezuelan government officials, backed by National Guard troops, seized control of cement plants owned by Mexico's Cemex SAB after failing to reach a deal on terms for nationalising them.

Cemex, in a release, confined comment to acknowledging the seizure of operational control by PDVSA, the state oil company.

As a deadline for talks expired at the stroke of midnight Monday, Oil Minister Rafael Ramirez raised a fist in the air while hundreds of flag-waving workers cheered at a Cemex plant.

Taking over operations

"We're taking over operations," Ramirez said at the plant in the eastern state of Anzoategui. "With Cemex, regrettably, we couldn't reach an agreement."

The government moved to take control of Cemex's Venezuelan subsidiary after a 60-day period for negotiating compensation expired. President Hugo Chávez had established the timeframe in a June nationalisation decree.

Two other cement companies, Lafarge SA of France and Switzerland's Holcim Ltd, earlier agreed to nationalisation terms for their companies in Venezuela and said they would stay on as minority partners.

Ramirez said the government's expropriation of Cemex's plants would be formalised on Tuesday with the signing of a decree by Chávez.

Nationalisation of cement companies

Chávez earlier called the nationalisation of cement companies one of many "steps toward socialism", following nationalisation's of telecommunications and electricity companies, the country's largest steel maker and major oil projects.

Celebrating workers sang the national anthem at the plants early Tuesday after the takeover, while fireworks lit up the sky.

Cemex says its Venezuela assets include three cement plants, 30 smaller concrete plants, a shipping terminal and other facilities.

Government officials said they remained far apart from Cemex on terms. Ramirez said Cemex had asked for more than US$1.2 billion in compensation, an amount Venezuela feels is far more than its true value.

The government will carry out a thorough appraisal of the company's assets in order to establish fair compensation, Ramirez said.

One Cemex official told The Associated Press that National Guard troops took control of cement plants in Maracaibo and Barquisimeto on Monday evening, hours before the midnight deadline. The official spoke on condition of anonymity because she wasn't authorised to speak publicly about the subject.

Venezuela's largest

Of the three companies being nationalised, Cemex has the largest presence in Venezuela. It entered the country in 1994 when it bought out a Venezuelan cement company, and today has 3,000 employees.

Holcim and Lafarge together accounted for about half of the country's cement production, Ramirez said.

Venezuela agreed to pay US$267 million to Lafarge and US$552 million to Holcim in compensation within 60 days, Vice-President Ramon Carrizalez said after the two signed accords agreeing to the terms.

Venezuela will obtain an 89-per cent share of Lafarge's business in Venezuela and an 85-per cent share of Holcim's unit in the country, while the two companies will stay on as minority partners, Carrizalez said.

Holcim said in a statement that it would keep a 15 per cent stake under the deal. The company will not comment further until "a final agreement" is reached, Holcim chief spokesman, Roland Walker, said.

Bringing down prices

Chávez, who did not attend the late-night nationalisation rallies, pledged, in an earlier televised speech, that state-run cement businesses will help bring down prices in Venezuela. He said Venezuelan cement has been "the most expensive in the world" because the companies "are in private hands and they set the price very high".

Venezuela's tax agency said, earlier this month, that Cemex owed US$37.3 million in unpaid taxes for 2006 and 2007. Ramirez said the company had "serious deficiencies" in both unpaid taxes and "environmental matters".

Ramirez also complained that after plans for the nationalisation were announced in April, Cemex's Venezuelan subsidiary had improperly transferred shares it held in its subsidiaries operating in Panama, the Dominican Republic, Trinidad and Tobago and Guadeloupe.

Cemex has said it simply "transferred assets" within the company.