Sunday, May 12, 2013

Will the Venezuelan regime dare to put Polar on the scaffold? (or gallows, depending you local lingo)

I was on the road today and only tonight did I get the latest idiocies of the regime. This one must feel quite a lot of heat to consider taking over Polar, the largest private company in Venezuela, which today may represent about 4% of the GNP of Venezuela, a high number not because of any monopolistic intentions from Polar but because in a sea of bankruptcies and expropriations the Polar ship is somehow still afloat.

But first a little bit of background.

Last Wednesday  as evidence of food shortages increased I wrote a template for people to understand what is going on (it is my line of work, you know, and in all modesty I think I know better than Maduro). Not wanting to be repetitive, in a nutshell, the regime controls the distribution of food in Venezuela, and the supply of raw materials to food manufacturers, either through access to currency, or by simply authorizing who gets what of each crop, or deciding what raw material can be imported  regardless of the country rel needs. To this you had disastrous expropriations of productive lands, labor laws that make it very difficult to get a stable working schedule, the poor state of infrastructure from terrible roads to frequent power outages and you can guess why is it that the country needs to import straight half of its food at least.

All of this is not news but since the disease of Chavez the only care of the regime has been to survive and thus economic matters have simply not been dealt with. Period. As a consequence in the last two months the scarcity crisis has started to take a dangerous turn and the difficulty to get the basic corn flour for the "arepa" is becoming fast a political problem for the regime, as if it needed yet one more.

Anticipating an attack from the regime, Polar has already being preparing itself. After all, Polar is tired of all the attacks that Chavez himself did, but always balking once at the edge. After all, Chavez had the required intelligence to understand that his expropriations were a failure and that he simply could not afford to starve the country if he dared to take Polar. I am afraid his heirs have no such notion and may be willing to take that chance, in particular the idiot serving as Vice President, Arreaza, just because he nailed one of Chavez daughters, el bragetazo, the zipper flash, you know what for....

The market share for corn flour by Polar, Harina P.A.N., is roughly half of it. Certainly if the regime would let it be so, Polar has the technical expertise to grow all the required corn and produce 100% of corn flour required in Venezuela. I am willing to wager that in half a decade Polar could reach that goal if it wanted to and were allowed to do so, and we would all be the better for. But Chavez has hated Polar always because Polar is the symbol of what is good in Venezuelans  that we can be successful and productive and honest and creative when chavismo is neither of those, plus a few tares of its own. I apologize for the chauvinistic tone of this paragraph but sometimes things need to be spelled out for the idiot chavista that still visit this blog. Thus Chavez has tried to counter Polar by taking over or pretending to build the competition of Polar, going as far as taking away grain producers from Polar so that it would not have access to corn. Polar let it be, knowing full well that the inherent chavismo incompetence would show sooner or later.

Sure enough, we got that show this week.

Thus, perhaps unwisely but knowing that the regime would attack anyway, Polar in its official tweet states that the problem is not Harina PAN which is working full speed but the other brands that are not produced anymore.  I pick a couple of the tweets for your information.

Maduro coming back from a not very successful foreign tour finds this mess and decides to take the offensive. In the video below you see the moment in today's cadena when he grotesquely demands that Lorenzo Mendoza, CEO/owner of Polar, comes next Tuesday to the office of Arreaza to account on why is Polar not producing as much as "it is supposed", why it is dropping production and all sorts of other stuff which the readers by now know are not the fault of Polar but of the regime which controls are simply suffocating all. Polar has accepted the challenge. And Arreaza is an idiot for suggesting such a scene (I am sure he did, he is mean and idiot enough for that mistake, for giving Polar a platform to criticize visibly the regime policies if it wishes so).

I am not concerned about Polar whatsoever: I know that they have ALL the paper trail from the regime itself that can prove that not only they cannot hoard shit, but that they produce as much as they are able to do. It is possible that Polar has "decreased" its production artificially because its corn supply is not enough and on their own they have started a mild form of rationing by becoming on purpose and provisionally less productive. But even if this were to be true, can we blame Polar? Would it be a good idea to pull it all out of the silos in a couple of weeks and then wait for the next harvest starting at best in July?

What I am concerned with is the regime, that it is clearly losing its senses, if it had any left.  In Maduro demands against Polar today we even learned that the regime had already sustained meetings with Polar, so we wonder why is it they want Lorenzo Mendoza Tuesday in Arreaza's office. But one of these meetings was with the dense Rafael Ramirez, the one that has ruined PDVSA, the biggest enabler of corruption himself in Venezuela. So we learn that he met "cordially" with Polar's Mendoza himself,  that he told him collaboration was possible but that they would never sign a pact with the bourgeoisie. Huh?  I wonder if really Ramirez is that stupid, though I can believe that he has become that stupid, that he now believes that threats against the last person able to help him out in Venezuela are going to stimulate Mendoza.....

I am telling you, this show today worries me because the regime feels cornered and it is thus becoming mental. In their pathological need to prove that they won in April, that they are able to rule and do as they please, they are willing to put the country in starvation......


  1. Charly8:50 AM

    To the contrary Daniel, it sounds like a good outcome When the families of the military Cuban ass kissers start starving, let see what the parasites will do. I sense pitchforks in the wind.

  2. I am here with Daniel. Chavismo is like a desperate animal. It can be in trouble but it is dangerous. Mendoza has a very difficult position and he acts as he must act in his capacity of businessman and that is an extremely difficult position right now in a country with no rule of law and with a government that can keep lots of Venezuelans living off imported stuff at least for some months. Mendoza might look for a compromise...but this can become a difficult situation. How will it look?
    Chavismo paying extra under the counter? I doubt it, not to Mendoza. They do it all the time to the corporations owned by the Chinese or the Brazilians, the Russians or the Argentines but to a Venezuelan capitalist?
    Maduro will go probably for fuzzy promises and tangible threats.
    What alternative does Mendoza have if he doesn't sell at a loss?
    Any idea, Daniel? He has been moving out lots of POLAR, but this goes beyond still moving more...there would come a point where POLAR in Venezuela becomes so thinned out that Chavismo decides to take over it. That would mean a lot of losses for Mendoza because even if he manages to recover that after Maduro is gone, Chavismo will have destroyed a lot, an awful lot.
    Chavismo is like the locust, only that at least you can eat locust.

  3. Anonymous3:58 PM

    But I do think that they are willing to starve the country, I don't think there is any doubt, the real question is how far is the country willing to be pushed by the Maduro regime, how many hours of waiting in line is too many hours(2,4?), how much CRAP and abuse can venezuelans put up with? I do think the country is becoming too acepting and too resigned to their bad luck, too compliant. The country has been subjected to 14 years of mental terrorism thru the "revolution" and the typical venezuelan living in the country expects less and less every day and is more submissive now than before, that is the only way you can survive in such an environment. I think, unfortunatly, that venezuelans have become pretty "helpless" in front of their every day reality....

  4. Daniel: hemos entrado en la fase de la represión y las consignas huecas. Maduro y compañía no saben qué hacer con la economía. No saben cómo salir de la trampa que ellos mismo crearon. El "madurismo" es la versión podrida del fascismo chavista:

  5. Anonymous5:04 PM

    I have heard from a source that Polar has moved operations and resources into Columbia. I don't know how reliable the source is. However, Polar was built using business tactics that are illegal in the US under anti-trust protection law. I know this personally, when Polar offered an enormous smount of start-up capital for an agreement to be an exclusive supplier. That doesn't mean that I disagree with Daniel, but lets support Polar but rembrer who they are!

    1. Anonymous
      Could you please use any nickname other than Anonymous? Even a number would do. That gives you enough anonymity. The reason for a nickname is to follow a conversation. If there are several users using "anonymous" and one is putting forward some arguments and then the other, it gets confusing.

      About what you wrote: it wouldn't surprise me that POLAR grew and prospered out of very feudal practices...this has been the drama in Venezuela forever: a couple of companies that became not only exclusive suppliers of something but got exclusive anything from the state for many years, no real competition.

      So I agree with your point we should remember that. I doubt people will, though.

      About the Colombia thing: at least all the Harina PAN that is consumed outside Venezuela is made in Colombia, as far as I know.

    2. You guys.....

      That Polar may have (only a may since there is no reference to actual did, not even its nature, by a convenient anonymous that sounds like a chavista Polar basher, even if s/he is not) business practices that would be frowned upon in the US is irrelevant to the present discussion: what matters is what they did in Venezuela. On this respect they must have worked very well, very legally since after 14 years of harassment Mendoza is still not in jail in spite of laws specifically written to screw him.

      Second, that old canard that I am, oh, so tired of hearing about sweet deals by getting in bed with the Venezuelan government in turn. Maybe, but again it is irrelevant. The world is plagued of governments of any political leaning promoting, subsidizing, helping out, granting exclusives and what not to given companies. Whichever way Venezuelan companies received help is irrelevant: what IS RELEVANT is what they did with that help. Be it Samsung in Korea or Polar in Venezuela, whatever help they received they made good with it and became multinational companies bringing riches to their countries. In particular Polar which has founded a prosperous subsidiary in Colombia that supplies the world in Harina Pan, proving that it could provde all of Venezuela if chavismo was not so busy trying to ruin Polar. AND YES, get it all in your heads once and for all: IT IS FORBIDDEN TO EXPORT ANY FOOD FROM VENEZUELA and henceforth you cannot accuse Polat of starving the country by sneaking out Harina PAN. Not to mention that the amounts and the logistics to sneak out Harina Pan are simply impossible and would be more intelligently made to export, say, cocaine......

      So yes, count me in as a devoted supporter of Polar because for any unfounded accusation made against it it has in advance delivered much greater good than whatever ill it brings. And since we are at personal level, let me assure you tht I have personal proof that Polar has got out of its way to not become a monopoly on some items, making unthinkable concessions so that it much less efficient competition does preserve at least a small share of the market. The curse of Polar is to be a first world company in a mendacious 4th world mentality country and even people that should know better start believing stories about alligators in Polar sewers. Wait! that could actually be possible near Valencia lake facilities of Polar!

    3. Daniel I have to ask. Why doesn't Venezuela import Harina Pan from Colombia?

    4. Hello, Kepler, Daniel and everyone. I posted one anonymous message above, because I didn't have a qualifying account. I just registered a Google account just to be able to post on this blog site.
      First of all, I was the one who dealt with Polar, and Polar offered me money in exchange for my granting them exclusive supplier status for their products. The amount offered was high enough to make it very hard for me to refuse the money even though I didn't need the money. However, the amount offered was substantial enough that it could almost fund a start-up business by itself. That is good, because it creates opportunities that otherwise would not exist. On the other hand this type of practice makes it hard for any new companies to compete with Polar.
      When I was in graduate school, I formed a company with two other students, and together we developed a product and sold it to a large corporation. During the negotiation, the corporation had about a dozen lawyers representing them. That was my first experience being a small start-up dealing with a huge company. We were nothing to them, and they had all the control.
      Through the years since then, I have had numerous confrontations with big corporations. They use their power, and money is power.
      If you think all big corporations are friends, you should think again.
      Polar is an efficient well run company that makes quality products and takes care of its employees. I would not wish them to close down at all.

    5. i am very far, very very far, from thinking that big corporations are friends.....

  6. Anonymous8:00 PM

    How appropriate todays title in a mayor Swiss newspaper:
    Venezuela threatened by an economic nuclear bomb!
    For those who read German:

  7. Unfortunately I can show that Daniel is wrong: yes indeed, he says "What I am concerned with is the regime, that it is clearly losing its senses, if it had any left"...however, the truth is that this regime NEVER HAD ANY TO START WITH!

  8. Anonymous10:43 PM

    We live in Nicaragua and there is plenty of P.A.N. on the shelves, no one is fighting over it, we so many choices. So sorry things are going south in Venezuela. The lights may go out before they come back on.

  9. Anonymous12:32 AM

    * The Harina PAN in Canada is imported from Colombia, it states plainly that it's a product of Colombia.
    ... and it's always on the store shelves. The shortages are a product of socialism, it's a feature of socialism, not an accident.

    1. plob5002:28 AM

      ditto in Australia. Harina de PAN product of Colombia

    2. I can buy however many I want here in Chicago, also product of Colombia, makes one wonder if at one time prior to 1999, was it made in Venezuela?!?!?

  10. Anonymous1:11 AM

    Washington DC supermarkets have plenty of Harina PAN de Columbia on the shelves. But don't ask a country Chavistas call the imperialist devil to rescue Venezuela.

  11. There are nearly a hundred markets in the metropolitan area I live in with plenty of Harina PAN.

  12. La ignorancia de los chavistas no tiene límites. Los del PCV dicen que en Venezuela no hay Harina PAN porque el producto se consigue en los supermercados en los Estados Unidos. No saben que ese producto, Polar lo fabrica y exporta desde Colombia. Vean aquí:

  13. I was looking at the story on El universal about the madman making oil for food deals all over LatAm in order to solve the food shortage. Of course how much oil for how much corn or what ever is not in the story. The problem with madman thinking is that both oil and corn and such are commodities and the prices change by the microsecond in the internet world. Long term deals only involve the drilling or seed and planting costs and are described differently than the futures index. Deals like those with China are stupid and if not now, in the near future PDVSA will have to say, "you committed oil production that we don't have Preidente El Stupido Supremo"! These are crimes against the Pueblo plain and simple.
    Back to the Harina PAN. You can grow corn localy or you can buy it on the commodites market. In most countries the price is the same as all of it is traded on the commodities market. In short, if Venezuelans don't want to pay the price, there are people in India who will. NB: During the Irish famine, there was plenty of food available in Ireland but, the poor Irish could not afford to buy it!

  14. Michel Garcia9:49 AM

    You can use this image I found on FB to illustrate the "other brands" the Polar tweet mentions. Notice, though, that all those brands are government-owned companies, not private ones.

    1. At least one used to be private until.....

  15. The problem the Chavistas have always had is their "passion fingers". Everything they touch they f**k.

  16. Daniel,

    Your use of the word "scaffold" is probably a direct translation from the French. My first thought for the word is it's use as scaffold for construction. If you use it in English, you need to specify "Hangman's Scaffold". Another, more common way, to say it would be, "send Polar to the gallows."

    1. i think gallows versus scaffold depends on local usage. so i put both in the title.

  17. Maduro recula. Ahora pide cacao (y quién sabe si una polarcita):

  18. Ronaldo8:32 PM

    Looks like Maduro blinked and Mendoza got what he wanted. For once Chavistas put out that a diplomatic solution was achieved considering both sides of the issue. This means Maduro got a butt kicking and had to acknowledge that he is not all powerful.

    CARACAS (Reuters) - Socialist leader Nicolas Maduro and the billionaire boss of Venezuela's biggest private company have buried the hatchet after a war of words over food shortages and other economic problems in the South American nation.

    Perpetuating the hard-line rhetoric of his predecessor Hugo Chavez, newly-elected Maduro turned on Empresas Polar president Lorenzo Mendoza in recent days, accusing him of hoarding products as part of an "economic war" on the state by private business.

    Mendoza, whose company is Venezuela's biggest beer- and flour-maker, denied that and pointedly challenged the government to sell production plants nationalized under Chavez back to the private sector to boost efficiency.

    On Tuesday night, the pair met to discuss their differences in a spat seen by Venezuelans as a bellwether for state-business relations going forward under Maduro's government.

    Both sides came out of the meeting sounding reconciliatory and pledging to work together to overcome food shortages that have increased tensions in Venezuela after Maduro's disputed election win last month.

    "It was very cordial, direct, sincere meeting ... We clarified we are producing at full capacity," Mendoza said.

    "The president was very kind in listening to us and communicating the need to keep investing, producing and supplying markets. That is our lifelong commitment, passion and vocation ... Part of this issue (shortages) has to do with the high politicization (in Venezuela)."

    Vice President Jorge Arreaza gave a similar account of the meeting. "The problem's been overcome," he told state TV.

  19. Anonymous8:01 PM

    Hey they're importing 50 million rolls of toilet paper. The country is saved! (for maybe a month) Maduro-what a guy!!

    1. With the food shortages, maybe we won't need as much toilet paper...

  20. Anonymous5:21 PM

    I was reading all comments and agree that there are changes necessary in Venezuela. I am Dutch and live in Aruba. Me and my Venezuelan wife want to move to Venezuela in a few months - and I am searching the internet for information. Unfortenately, on the forum I read a lot of complaints - but not one usable tip for the necessary change. Maybe some of you guys can punt in some possitive news (and not about the beautiful nature and people in Venezuela, because I know about his already). For realizing a positive change in Venezuela, the people - maybe - need some positive input and help... For myself, I realize that Venezuela went through a lot of problems (and still does), but I reming you all that Europe has had it's own problems (World War I en II). For a structural build-up of a large country there is a need for time - and assistance from actual local and foreign people, who are willing to put in positive action. I hope me and my wife can have a part in helping Venezuela achieve a better future!

  21. Anonymous5:22 PM

    I am an American and my wife is a Caracania. I have lived in Venezuela twice. (both times in Maracaibo). I left less than 60 days after Chavez took office, but have returned numerous times to visit family. I am saddened by the changes that I see. Although making sure that Polar stays healthy and viable is a step in the right direction, the big issue for me is PDVSA. Venezuela at one time had a very diverse economic base. Not so anymore. The country turns on the price of oil. Since the Chavez regime the production numbers have fallen off a cliff. At first they were great, because there was no reservoir management followed. Now PDVSA is in bed with the Chinese. Investments from Europe and North America are at an all time low, with good reason. Until the tide can be turned with PDVSA, the economic outlook is quite dire.


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