Venezuela: Heinz sells tomato plant facing expropriation to government

An idle tomato processing plant facing expropriation has been sold by U.S. company H.J. Heinz Co. to a state government.

The government of eastern Monagas state paid Alimentos Heinz C.A. 550 million bolivars (US$256,000; Ђ212,000) on Friday for the plant _ half the amount that the company had initially demanded, reported the state Bolivarian News Agency, ABN.

Troops seized the plant last month in a step toward expropriation. The company eventually acknowledged that the facility was not being used and agreed to negotiate its sale to the government, ending the seizure. It said the plant in Cedeno, about 530 kilometers (330 miles) east of Caracas, was left without anything to process because local producers had found more profitable buyers of fresh tomatoes elsewhere.

The deal signed Friday did not include the sale of processing equipment, which the government deemed obsolete, the daily El Universal reported Saturday.

Cedeno mayor Pedro Briceno told ABN the plant would resume operations in mid-2006 after a technological upgrade.

Chavez, who says he is leading this South American country toward socialism, has vowed to expropriate companies deemed inoperative. This year he has ordered the expropriation of four private companies. The government says it respects private property but Venezuela's constitution allows it in some cases to expropriate property if it serves public interests.

Heinz, best known for its ketchup brand, is based in Pittsburgh, Pennsylvania. Its Venezuelan subsidiary, Alimentos Heinz, has two remaining factories in Carabobo and Aragua states, AP reports.