Displaying items by tag: Cartel
CCP inspects APCMA over cartelisation claims
18 January 2012Pakistan: The Competition Commission of Pakistan (CCP) has conducted searches and inspections at the premises of the All Pakistan Cement Manufacturers Association (APCMA) and Kohat Cement in Lahore under Section 34 of the Competition Act 2010. It said that it carried out the searches to look for proof of suspected cartelisation in the cement sector.
According to a statement issued by the CCP, it had obtained information from an informant that contained copies of certain e-mails that had been sent by the Secretary of APCMA to cement manufacturers. The contents of the e-mails provided by the informant revealed that the cement manufactures had prima facie collectively devised a vigilance plan by which the cement dispatches at one cement production unit are monitored by a team of another unit and vice versa.
Such monitoring of cement dispatches was previously recognised as an integral part of a collusive arrangement among the cement manufacturers. The CCP has declared such arrangements to be in violation of Section 4 of the Competition Act 2010. It imposed a penalty of nearly US$700m on the APCMA and its members. This matter has been taken to court and is still pending.
The fresh probe by CCP was based on a separate set of facts that suggested that the cement manufacturers have again formed a collusive arrangement and to ensure compliance the monitoring function is being performed by cement manufacturers themselves under the auspices of APCMA. When the CCP search and inspection team arrived at the APCMA premises, it discovered that the APCMA secretary was not present in the office and all the records were locked. After initial hesitation the APCMA allowed the CCP to access the data. A search and inspection was also carried out at of the office of the APCMA President, who is also the Chief Executive of Kohat Cement.
Local media has long speculated that cartelisation was in place in the cement sector based on rapid cement price increases in recent months. Pakistan's cement capacity utilisation also dropped to a 10-year low of 69.7% in the six months to 31 December 2011. "The expected turn around in the economy did not materialise because the capacity of the sector continued to increase," said a spokesman from the APCMA, commenting before the CCP inspections were made. He said that expansions in the cement sector had been planned several years ago when the economy had been in a far better situation.
Five fined in Spanish cartel case
18 January 2012Spain: Spain's competition watchdog CNC has imposed a fine of Euro11.1m on five cement companies, namely Cementos Portland, Beriain, Cetya, Vresa and Cemex España, which have been accused of setting up a cartel in northern Spain.
Cementos Portland was ordered to pay Euro5.72m, followed by Beriain with a Euro2.5m fine. Next came Cetya and Vresa with fines of Euro1.14m and Euro0.96m respectively. Cemex España will be forced to forfeit Euro0.5m.
AfriSam settles over cartel claims
02 November 2011South Africa: The South African Competition Commission has reached a settlement agreement with AfriSam, which has admitted that it took part in a cement cartel.
AfriSam has agreed to pay a penalty of USD16m representing 3% of its 2010 cement annual turnover in the Southern African Customs Union (comprising South Africa, Botswana, Lesotho, Swaziland and Namibia). This settlement is a reflection of AfriSam's material cooperation with the Commission in uncovering and providing further information on its conduct.
"This settlement is a reflection of AfriSam's material co-operation with the commission in uncovering and providing further information on the conduct," the commission commented on 1 November 2011.
This agreement follows the Commission's investigation of price fixing and market allocation against four main domestic producers Pretoria Portland Cement Company Limited (PPC), Lafarge Industries South Africa (Lafarge), AfriSam Consortium Ltd and Natal Portland Cement Cimpor (NPC-Cimpor). Previously, PPC applied for leniency and confirmed the existence of a cartel among the four cement producers. In terms of the settlement, AfriSam admits that it entered into agreements and arrangements with PPC, Lafarge and NPC to divide markets and indirectly fix the price of cement. The case against Lafarge and NPC continues.
"To facilitate this process we conducted a systematic and comprehensive review of some of the company's business practices from a competition law perspective," Stephan Olivier, AfriSam CEO stated. "We are, of course, saddened and embarrassed by what has happened. I say categorically that the AfriSam of today is an honourable and ethical company, fully committed to rigorous compliance with competition law."
Holcim price-fixing probe ends in Brazil
01 October 2011Brazil: An antitrust investigation into alleged price-fixing by Holcim and others in Brazil has ended today. The company could face a fine of up to USD413m if the probe decides that Holcim's behaviour was uncompetitive.
Several cement makers are among the companies named by the Brazilian government's anti-cartel investigation arm (SDE) in an inquiry that began in 2005. According to the Brazilian government, the companies were given until 1 October 2011 to make their final submissions before the SDE gives its opinion to the Administrative Council of Economic Defense (CADE), which will makes a final ruling. The companies involved face fines of up to 30% of their Brazilian revenue if CADE decides they have been running a cartel.
"There is an investigation into the cement industry including Holcim, which started in 2005," said Holcim spokesman Peter Gysel. "This is an ongoing proceeding and we cannot comment further."
Cartel fines are normally limited to 30% of revenue from Brazil, but a recent case showed that repeat offences can draw penalties of up to 50%. In 2010 Brazil's antitrust regulator fined White Martins Gases Industraies USD1.3bn for forming a cartel with four other industrial gas companies. The amount was later reduced to USD0.95bn. Praxair expects to win two appeals to the case.
Holcim previously has been fined by the anti-cartel authorities in Brazil following an investigation that dates back to its activities in 2002. "In 2002, there was an investigation in the aggregates business where the company received a non-material fine," Holcim spokesman Gysel said.
Ian Osburn, analyst for ING Bank, said that if the investigation found against Holcim, the company could face fines of up to 50% of its 2009 revenue in Brazil, which he estimates was around USD820m. Penalties of half of that amount, or USD410m, would reduce the company's 2012 earnings before interest, tax and amortisation by around 15% Osburn said. "In the worse case scenario, the fine would be about 15% of Holcim's 2012 group operating profit. That's significant," he said.