Displaying items by tag: Cade

Brazil: Brazil's antitrust watchdog Cade has fined six cement makers a combined US$1.4bn for fixing prices for two decades and ordered the companies to dispose of many assets.

Votorantim Cimentos SA, Camargo Correa SA's Intercement Brasil, Itabira Agro Industrial SA and Cia de Cimentos Itambé SA, as well as Switzerland's Holcim Ltd and Cimpor Cimentos de Portugal SGPS SA agreed to set prices to force rivals from the market, according to councillors at Cade. Cade ignored the companies' claims that there was no evidence of price-rigging and ordered them to cut installed capacity in concrete-services by 20% in large markets. The ruling also requires the companies to do away with any cross shareholdings.

The ruling, which followed an eight-year inquiry, came as allegations of cost overruns have dogged preparations for the 2014 FIFA Football World Cup. Local cement sales have more than doubled over the past decade and prices have jumped by about 66% in that period following a commodities-based boom and government efforts to expand roads and other infrastructure.

"This cartel was so strong that it had clear strategic goals," said councillor Márcio de Oliveira Junior. The six companies named in the ruling control about 75% of the domestic market for cement and concrete. The decision was slightly milder than councillor Alessandro Octaviani's January 2014 proposal, which called for bigger asset disposals. Cade also imposed sanctions on Abesc (an industry group representing concrete producers), ABCP (Brazil's Portland cement group) and SNIC, which represents local cement factories.

Lawyers said that litigation could go on for years should the companies appeal. Cade had previously blocked any attempt for early settlements. One of the lawyers involved, who asked not to be named, told Reuters that the severity of the fines and the asset disposals are unheard of in similar antitrust cases around the world. Industry leaders allege that Cade has no legal power to impose any asset sales.

Under terms of the ruling, Votorantim will have to pay US$672m in fines, Cimpor will pay US$133m, Intercement Brasil will pay US$108m, Itabira will pay US$184m, Holcim will pay US$227 and Itambé will have to pay US$39.4m. Votorantim will challenge the decision, "Because it is unjustified, lacks legal basis and ignores market facts," said Votorantim. SNIC has also said that it plans to appeal Cade's decision.

Brazil: Brazil's anti-trust regulator, Conselho Administrativo de Defesa Econômica (Cade) will force the sale of 24% of the total installed capacity of the country's four largest cement manufacturers and fine them a total of US$1.4bn as punishment for cartel activities. The decision to implement these measures comes after months of internal uncertainty at Cade.

The four companies are Votorantim, InterCement, Itabira and Holcim. Lafarge Brasil had previously settled with Cade by way of an agreement on divestments and a negotiated fine of US$19m.

Votorantim will be the most affected by the forced divestments. It will have to sell 35% of its production capacity, which Cade says is equivalent to 15% of the Brazilian cement market. InterCement will have to sell 25% of its capacity, equivalent to 4% of the market, Itabira will have to sell 22% of its assets, which is 3% of the market share and Holcim Brasil's 22% divestment equates to 2% of the market.

According to Cade, there has been a cement cartel active in Brazil for the last 10 years, which has seen companies collude to fix prices and sales volumes and create barriers to competition. Cade estimates that this has cost the economy US$6.3bn in inflated prices.

Brazil: The Brazilian cement industry is on hold over a US$1.32bn fine likely to be confirmed by the Brazilian Competition Authority (Cade) for cartel practices. A legal battle is likely to follow the final ruling of Cade in a process that would include the mandatory sale of 24% of the cement assets of the companies involved.

Votorantim Cimentos received a US$662m fine and will be compelled to divest 35% of its assets that represent 11Mt/yr of cement capacity, equivalent to 15% of the cement demand in Brazil. Holcim is to be fined US$216m and is required to sell 22% of its assets. Itabira will be fined US$175m and will be required to sell 22% of its assets. Cimpor faces a US$126m fine and the sale of 25% of its assets. InterCement is to be fined US$103m and will be required to sell 25% of its assets. Itambé will be fined US$37.5m and will not have to sell any assets, as the company operates just one cement plant.