July 29 (Bloomberg) -- Textiles Fabricato Tejicondor SA, Colombia’s biggest textile maker, is “very worried” about a decision by neighboring Venezuela to block the country’s exports, said Chief Executive Officer Oscar Ivan Zuluaga.

“We are very worried about the Venezuelan government’s announcements,” Zuluaga said today in a telephone interview from Medellin. Venezuela is Fabricato’s biggest export market. “We trust that diplomacy works and an agreement is worked out quickly between the countries,” he said.

Venezuelan President Hugo Chavez pulled his ambassador to Colombia and blocked Colombian imports, the second time in as many years he’s recalled his top diplomat in Bogota. Chavez, 55, said he is taking the actions partly in response to accusations by Colombia’s vice president that Venezuela provided Swedish anti-tank weapons to Colombian guerrillas.

Implementation of the ban would have a “very important” effect on Fabricato, Zuluaga said. He declined to elaborate.

The company’s sales to Venezuela tumbled in June after Chavez’s administration stopped selling dollars to the textile industry’s importers at the official exchange rate of 2.15 per dollar, he said. Companies that can’t get access to dollars at the official rate buy in the parallel market, where the bolivar traded today at 6.96.

“It’s an important fall in exports and if the political situation worsens, impacting the economy, then it becomes an even bigger issue,” Zuluaga said.

Fabricato is the worst performer in Colombia’s main equity index in the past three months, tumbling 29 percent as an appreciating currency pointed to lower export revenues. The company reported on July 27 a first-half net loss of 26.7 billion pesos ($13.4 million), bigger than the 19.8 billion peso loss a year earlier.

The Colombian peso, the world’s best-performing currency during the past four months, dropped as much as 3.2 percent today on concern a border shutdown would curb the inflow of dollars.

To contact the reporter on this story: James Attwood in Santiago at jattwood3@bloomberg.net

Last Updated: July 29, 2009 17:49 EDT