Business Irish

Monday 20 May 2019

Smurfit Kappa's Venezuela unit 'targeted by military intelligence'

Smurfit Kappa's Tony Smurfit
Smurfit Kappa's Tony Smurfit
John Mulligan

John Mulligan

Agents from Venezuela's military counter-intelligence have been harassing Smurfit Kappa's workers at its seized operations in the country, the Irish packaging giant said yesterday, adding that it will now deconsolidate its business in the South American nation.

Last month, the Venezuela government took control of Smurfit Kappa's operations there. It has production plants in Caracas as well as other cities to the west of the capital.

It also has paper mills, a forestry unit, a sales office and a recycling plant in the country and employs 1,600 people there.

Last week, Smurfit Kappa CEO Tony Smurfit said that populist politics in Veneuzuela has effectively destroyed business and the country.

The Smurfit Kappa unit there has been under pressure for years, but was still performing as Venezuela slipped into economic quicksand.

When authorities took control of Smurfit Kappa operations last month under a so-called Occupation Order, it was intended to be for a period of 90 days. Two Smurfit Kappa managers were also arrested by the regime.

"Since the notification of the Occupation Order, the company has been subject to government interference, including through the arbitrary harassment of its employees by the Directorate General of Military Counterintelligence through unauthorised visits which have the effect of intimidating the company's workforce resulting in increasing absenteeism," said Smurfit Kappa.

The group said it will now deconsolidate its Venezuela operations from the rest of its business, resulting in a €60m asset write-down for the company.

Irish Independent

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