Clorox Withdraws from Venezuela, Closes Two Factories

Clorox , the U.S. cleaning products company, has made an abrupt departure from Venezuela and its two local units have temporarily been take over by the host country.

The Clorox management apparently abandoned the companies due to the difficult economic conditions in the country. The two plants in the Valles del Tuy district to the south of Caracas  and in central Carbobo district are being run by the units' 400 odd workers for the moment.

Vice President Jorge Arreaza accused the Clorox management of abandoning the staff and setting an evil example. He said, "Here's the workers' government of President Nicolas Maduro temporarily occupying these installations together with the workers,"  reports Reuters.

The workers at the companies are upset at the manner they were informed of the closing of the units. They were informed via text of their dismissal and were given a number to call where a pre recorded message played, reports Reuters.

"It's the first time a multinational has done anything like that in Venezuela," said Zairo Roman, a machine-repair worker in Carabobo

Clorox's decision comes amid a large section of foreign investors expressing concerns over the way President Nicolas Maduro's was running the economy

Clorox said Monday that it was ending operations in Venezuela and wanted to sell its local units  after years of rigid price control, inflation and nonviable business policies of the government, reports the Associated Press.

Venezuela requires foreign companies to sell products in bolivars, the national currency  and the government promises to reimburse them in dollars, but the exchange rate is 6.3 bolivars for a dollar.

Analysts say the takeover of the companies by workers' unions will make it difficult for Clorox to sell.

Venezuelan analyst Diego Moya-Ocampos, of IHS risk consultancy, said  to Reuters that the Clorox case showed the risks to companies seeking to scale back operations or leave Venezuela

Several companies like Colgate Palmolive and Avon Inc operating in Venezuela  have also warned of wanting to pull up stakes.

Clorox is yet to respond to the takeover of its factories by the workers.