Boston, MA 09/23/2014 (wallstreetpr) – According to news in Bloomberg, The Clorox Co (NYSE:CLX) is leaving Venezuela after it faced unprofitable operations following price freezes.
The company faced loss-making business:
The consumer-products conglomeration selling diverse range of products spanning salad dressing to bleach, Clorox Co. is pulling out of Venezuela following the government-commanded price freezes plus inflation leading to an unprofitable business. According to the news, Clorox Venezuela would promptly bring its operations to a close. Also according to a statement, the company would attempt to sell away its assets. The shares surged following the declaration along with a weekend report brought out by the New York Post stating that Clorox had rebuffed a buyout bid from another consumer-products company. The takeover offer came earlier this year.
The CEO commented:
Indeed, Clorox is undergoing a challenging situation. The CEO and Chairman of The Clorox Co (NYSE:CLX), Don Knauss, in a statement, said that it’s a very difficult situation for the company. Knauss further added that Clorox feels enormously proud of its women and men who contributed significantly to its business and helped in its operations in spite of acute economic challenges. The company, no doubt, is working very hard to be beside them through this changeover.
It has been reported that the company’s exit would bring costs of as much as $65 million this fiscal year, as per the California-based company’s statement. Venezuela accounted for almost 1.4% of its aggregate revenue.
The turmoil:
The Clorox Co (NYSE:CLX), after the transition, stands the latest company of the U.S. to pull back from Venezuela. It’s where the scarcity of supply, currency controls, as well as the peak rate of inflation in the world has thwarted foreign investment. The turmoil has been there since the President, Hugo Chavez, breathed his last. Late Hugo Chavez had run the business for 14 years and passed away in March 2013.
Clorox Co (NYSE:CLX), in fact, claimed that the price freeze for almost three years and the triple-digit inflation compelled it to sell its products at a loss. The company also stated that the Government-approved price hikes were not sufficient to allow Clorox Venezuela break even.
