Smurfit Kappa said on Wednesday it is "fully committed" to protecting its interests in Venezuela if the government there extends the 90-day period under which it moved to seize the cardboard box maker's local operations last week.
The Dublin-based group, led by chief executive Tony Smurfit, confirmed that two of its employees have been detained by Venezuelan authorities. It was reported last week that the Caracas government seized Smurfit Kappa Carton de Venezuela (SKCV) amid complaints about prices that the company was charging for its products in an alleged abuse of its dominant market position – at a time when the country is grappling with hyperinflation.
“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,” Smurfit Kappa said. “Consequently, as of August 28th, 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.”
Declaration
The paper packaging giant warned that "in the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders".
SKCV, , which has been in the Venezuelan market for more than three decades, currently employs almost 1,600 staff directly and “many more indirectly”, it said.
“During that time the company has operated to the highest business and ethical standards, invested significant amounts of capital in its business, developed a highly progressive corporate social responsibility program and dedicated significant financial support and resources to the education and health of the less privileged members of the communities in which the company operates,” the company said.
Nine unions in Venezuela signed a public declaration last Thursday saying SKCV “has always been a company that abides the law and complies with labour and health and safety regulations”.
