April 4 (Bloomberg) -- Venezuelan President Hugo Chavez said he'll nationalize the country's cement companies to boost supplies of construction materials, a pledge threatening local operations of the world's third-biggest producer, Cemex SAB.

The state will pay plant owners ``whatever it costs,'' Chavez said in issuing orders for the takeovers. Cement makers are polluting and failing to invest in new technology, he said. A seizure would also take assets of Lafarge SA of France and Holcim Ltd. of Switzerland. Venezuela took over a plant from Colombia's Cementos Argos SA in 2007.

The nationalization order comes as Chavez seeks to relieve shortages due in part to the country's record oil income. The government is restricting food exports and Chavez said in January he would ban asphalt sales abroad as well. Chavez has accused building-material suppliers of establishing a monopoly that overcharges and slows home and road construction.

``Starting from now, all legal and economic measures should be taken to nationalize the national cement industry in the short term,'' Chavez said, according to a Communications Ministry statement issued today.

Shares Fall

Chavez already seized the telephone and electricity industries, and bolstered state control of oil production in his drive toward socialism. He paid shareholders almost market value for telecommunications company CANTV. With oil projects, he has refused to go above book value. The government, after spending billions of dollars on the takeovers, is in arbitration with ConocoPhillips and Exxon Mobil Corp. over oil venture payments.

Cemex American depositary receipts fell $1.16, or 4.2 percent, to $26.32 in New York Stock Exchange composite trading today, their biggest decline since falling 4.4 percent March 19. Lafarge fell 88 cents, or 0.8 percent, to 112.71 euros in Paris. Holcim gained a half a Swiss franc to 107.9 francs.

Monterrey, Mexico-based Cemex is the largest domestic supplier of cement and ready-mix concrete in Venezuela, with annual cement production capacity of 4.6 million tons and 33 ready-mix plants, according to its Web site. A local subsidiary, Cemex Venezuela SACA, had a market value of 1.18 billion bolivars ($547 million) at the start of trading today. The company's Venezuelan cement sales grew 17 percent in 2007, Cemex said in a Jan. 29 teleconference.

`Negative'

``Cemex has not received any official notification about this decision from the government of Venezuela,'' company spokesman Jorge Perez said in a telephone interview. ``Cemex has requested an explanation from the appropriate Venezuelan authorities.''

Venezuela's contribution to Cemex's profit has declined since Cemex purchased Australia's Rinker Group Ltd. for $14.2 billion in July, said Marcelo Telles, an analyst with Credit Suisse in Mexico City. Cemex's operations in Venezuela account for less than 5 percent of the company's earnings before interest, taxes, depreciation and amortization -- a measure of cash flow known as Ebitda, he said.

``It's marginally negative, but it shouldn't be a significant impact,'' Telles said today in a telephone interview. Rinker group makes more than 80 percent of its sales in the U.S.

Venezuela is a market Cemex would like to hang on to, Telles said, because profit margins are higher than its operations in the U.S. or Europe. The terms of having to sell to the Venezuelan government may not be favorable, he said.

`Fair Value'

``I don't think they would get anything close to fair value, but it's too early to say,'' Telles said.

Cemex's three Venezuelan cement plants had 45 percent of the market in 2007.

Mexican Finance Minister Agustin Carstens today expressed concern about how Mexican companies will be treated. Carstens said he will seek to talk to his Venezuelan counterpart during finance ministers meeting in Washington this spring.

``If I see him, I'll certainly make an observation -- that the rights of Mexican companies as overseas investors must be respected,'' Carstens said in an interview with Televisa.

Holcim, the world's second-largest cement maker, is taking the threat ``seriously,'' spokesman Peter Gysel said. The Swiss company runs a plant in Venezuela's Cumarebo region and another in San Sebastian. Together, the factories produce 2.4 million tons and employ more than 500 people.

Exports

``We don't know any more than others,'' Gysel said. ``We have to wait to see what happens. He said it already several times in the past.''

Lucy Saint-Antonin, a spokeswoman at Lafarge, the world's largest cement company, declined to comment. The company's revenue from Venezuela is 90 million euros ($141 million). Its two plants have the capacity to make 1.6 million tons, Saint- Antonin said.

The companies export cement to keep their Venezuelan margins high, Rodolfo Sanz, Venezuela's mining minister, said in remarks on state television. He said there is no fixed timeline for analyzing the companies' values.

``We continue to advance in Latin America toward control over all those primary materials, everything used in construction, in energy, and in minerals,'' he said.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net; Thomas Black in Monterrey, Mexico, at tblack@bloomberg.net.

Last Updated: April 4, 2008 18:58 EDT