Venezuela says taking over halted Kimberly-Clark plant

CARACAS (Reuters) - Venezuela's socialist government said on Monday it was taking over and re-activating a plant that U.S. personal care products maker Kimberly-Clark Corp (NYSE: KMB) halted due to the nation's economic crisis.

Kimberly-Clark, which makes Huggies diapers and Kleenex tissues, said at the weekend it was halting its two-decade Venezuela operations as it was unable to obtain raw materials or hard currency and was struggling with high inflation.

But Labor Minister Oswaldo Vera appeared at its plant, in the central provincial city of Maracay, on Monday surrounded by workers who he said were re-starting operations immediately.

"Kimberly-Clark is going to continue producing, now in the hands of the workers," he told state TV. "We've just turned on the first engine."

It was unclear how the plant would continue producing if there were insufficient raw materials.

After U.S. cleaning products maker Clorox Co(NYSE: CLX) pulled out of Venezuela in 2014, the government also announced workers would take over, but the products it made are hard to find.

Critics say nationalizations and takeovers during 17 years of socialist rule in Venezuela, under Hugo Chavez from 1999-2013 and now under President Nicolas Maduro, destroyed local production and cowed private business.

In a statement on Monday after news of the takeover, Kimberly-Clark ratified its decision to suspend operations "due to circumstances beyond its control" and expressed concern for the safety of former employees in Venezuela.

"If the Venezuelan government takes control of Kimberly-Clark facilities and operations, it will be responsible for the well-being of the workers and the physical assets, equipment and machinery in the facilities going forward," it added.

Despite having the world's largest oil reserves, the South American OPEC nation is suffering a severe crisis, with the economy shrinking since early 2014, inflation the highest in the world, and basic food and products increasingly scarce.

Low oil prices have exacerbated a failing socialist model.

However, Maduro, 53, accuses political foes and businessmen of an "economic war" against his government with U.S. backing.

(Reporting by Diego Ore; Writing by Andrew Cawthorne; Editing by Bill Rigby and Andrew Hay)

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