Chavez has seized land belonging to Irish packaging tycoon.

Venezuelan president Hugo Chavez has seized land belonging to Irish packaging tycoon Michael Smurfit. His government announced it had taken control of 3,700 acres owned by the multi national Dublin-based Smurfit Kappa Group.

Chavez said he was making the move because the land was being used to grow eucalyptus, a cardboard component, instead of food in violation of Venezuelan law.

This is second high-profile nationalisation in as many days. Earlier this week Chavez ordered the takeover of a Venezuelan unit of US agriculture giant Cargill.

Speaking of his latest move against Smurfit Kappa on state TV, he said: "We are going to use all the eucalyptus wood sensibly and harvest other things there, beans, corn, sorghum, cassava and yam."

Public works minister Diosdado Cabello added: "The multinational Smurfit harvests a specific type of wood. It absorbs almost all the water in the subsoil and the only beneficiaries of the harvest are the owners of the company."

Chavez launched a nationwide land reform after taking office in 1999 and the Nationality Assembly passed a law two years later giving the state power to seized underused farmland.

Michael Smurfit joined the cardboard company started by father Jefferson in the 1950s and turned it into a world leader.

He is estimated to be worth more than £400 million and has been honoured by the government of Venezuela for his charitable work.

The businessman, knighted by the Queen in 2005 for his contributions to employment in the UK and his charitable donations, holds dual Irish and British citizenship.

The Smurfit Kappa Group was formed four years ago following the merger of the Jefferson Smurfit Group, the company Michael Smurfit inherited from his father, with Kappa Packaging BV.

It employs 42,000 employees in 33 countries on five continents and the parent company's headquarters are in Dublin.