CARACAS (Reuters) - Personal care products maker Kimberly-Clark Corp. (N:KMB) on Saturday said it was halting its Venezuela operations due to the deteriorating economic situation that includes soaring consumer prices and shortages of basic goods.
Irving, Texas-based Kimberly-Clark, the maker of Huggies diapers and Kleenex tissues, said that over the last two months it had already halted most of its production lines. It said it had been unable to obtain raw materials or hard currency and had been adversely affected by high inflation.
"The combination of these factors makes it impossible to continue our business at this time," Kimberly-Clark said in a statement.
"Kimberly-Clark will not continue producing, distributing or selling its product lines for institutional or mass consumption while this suspension is in effect."
The OPEC nation's economy is in free fall due to low oil prices and a collapsing socialist economic model. Venezuelans routinely spend hours in line to find basic products ranging from food and medicine to personal care items such as diapers, sanitary napkins and toilet paper.
Many of those items are subject to price controls set below the cost of production, which has left companies with few incentives to produce them and fueled a smuggling trade by those who buy them and resell them at a hefty markup.
Kimberly-Clark in 2013 agreed to invest the equivalent of $37 million to boost toilet paper production, according to a state media report at the time, as part of efforts to ease an embarrassing shortage of the product.
Venezuelan President Nicolas Maduro blames the country's problems an on "economic war" by business leaders with the backing of Washington.