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Venezuela temporarily seizes Cargill pasta factory

Venezuelan officials including soldiers temporarily seized a pasta factory owned by US food giant Cargill in a pricing spat, the latest move by President Hugo Chavez's government against foreign companies.

During a decade in office, the socialist Chavez has nationalized large swathes of OPEC member nation Venezuela's economy, including a rice mill owned by Cargill earlier this year and dozens of oil service companies last week.

Deputy food minister Rafael Coronado said the new 90-day seizure was ordered after officials found the factory was not producing enough of a type of pasta sold at cheap, government-established prices.

“There was a marked noncompliance with the law,” Coronado said, flanked by soldiers, in a television broadcast from outside the plant in the coastal state of Vargas.

Chavez launched his main nationalization drive during a five-year oil boom when he took over the energy sector, but he has hardly slowed the pace despite crude prices tumbling in recent months.

Struggling with Latin America's highest rate of inflation, Chavez has this year moved against food processing companies accused of dodging government low-price regulations and stepped up takeovers of farms deemed idle.

He nationalized the Cargill rice plant in March because it produced a type of rice not included in price controls.

Cargill is one of the largest privately owned companies in the US It has 13 factories in Venezuela and employs about 2,000 people there.

Cargill Venezuela said it could not immediately comment on the move.

Coronado said that after 90 days the government could decide to take further action against the plant.

Last week Venezuela seized several oil service companies including a large unit of US firm Williams Companies. Chavez is also trying to buy the Venezuelan unit of Spain's Santander financial group. (Reuters)