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Venezuela: Sudamtex's petroleum division disappoints

04 January 2001

Venezuelan textile company Sudamtex had expected its diversification into glass-fibre and oil to correspond to at least 25 per cent of group sales by now but they still contribute only 15 per cent three years down the line. Group chairman Alexander Furth, currently restructuring financial debt of around $50mil, admits disappointment but reaffirms faith in the strategy of diversification. Venezuelan oil drilling was virtually paralized in 2000 but in Colombia Sudamtex has found successsupplying petrol tanks through subsidiary Fibratank. The firm has been hit by the Asian crisis that led to falling textile prices and by the collapse of the oil business as well as falling consumerism and textile 'fakes'. Furth has stated that George Soros has reduced his stake in the company, a stake that reached 20 per cent at one point. At the lose of financial year 1998-1999, Sudamtex posted a loss of 3.4bil Bolivars; in 1999-2000, losses rose to 8bil Bolivars. In the first half of the current 2000-2001 year, Sudamtex lost 1.1bil Bolivars with sales down from 12.9bil to 12.8bil. The company is re-locating certain activities, moving from Caracas to Maracay, leaving only the Fibratank offices in the capital near to Petroleos de Venezuela. Sudamtex employs 700 workers, with 1,300 having lost their jobs in the last two years.