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Kimberly-Clark halts production in Venezuela

13 Jul '16

2 min read

Personal care products maker Kimberly-Clark Corp., owners of Huggies diapers and Kleenex tissues, announced suspension of its operations in Venezuela citing deteriorating economic situation even as the country's Labour minister pronounced the action as “illegal” and re-opened the factory “in the hands of workers.”

While the American corporate said it was halting production as it was unable to obtain raw materials and manage production due to soaring consumer prices and tight currency controls, Labour minister Oswaldo Vera visited the factory in Maracay and restarted production.

"Kimberly-Clark will continue producing, now in the hands of the workers,” Vera was reported as saying by BBC. He claimed that 1,000 workers present with him had sought the reopening of the facility.

However, the Texas based company said in a statement that if the government took over the facility it would responsible for the “well-being of the workers and the physical asset, equipment and machinery in the facilities going forward."

Earlier on Saturday, the company issued a statement that “it will not continue producing, distributing or selling its product lines for institutional or mass consumption while this suspension is in effect."

Kimberly-Clark, which claimed to have acted appropriately, became the latest multinational to close or scale back operations in the country after General Mills, Procter & Gamble.

The OPEC nation's economy is in free fall due to low oil prices and a collapsing socialist economic model. Venezuelans routinely spend hours in line to find basic products ranging from food and medicine to personal care items such as diapers, sanitary napkins and toilet paper.

In 2013, Kimberly-Clark had agreed to invest the equivalent of $37 million to boost toilet paper production, according to a state media report at the time. (SH)

Fibre2Fashion News Desk – India

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