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JSE
THEE
THEE - The Competition Commission - PPC confesses to being part of a cement
cartel and gets conditional leniency
Press Release
The Competition Commission
11 November 2009
PPC confesses to being part of a cement cartel and gets conditional leniency
The Competition Commission has granted Pretoria Portland Cement Company Ltd
("PPC") conditional leniency from prosecution under the Competition Act, in
exchange for PPC`s complete and truthful disclosure of all cartel activities
between PPC and its competitors.
PPC applied for leniency shortly after the Commission raided and seized
documents and electronic data from PPC`s premises and those of its competitors
Lafarge Industries South Africa ("Lafarge"), AfriSam Consortium (Pty) Ltd
("AfriSam") and Natal Portland Cement Cimpor (Pty) Ltd ("NPC") on 24 June this
year. The raids were in pursuance of the Commission`s investigation of possible
collusion in the cement industry.
In its application for leniency PPC confirmed the existence of a cartel to
divide markets among the four cement producers. According to this information,
the four cement producers agreed to divide the cement market amongst themselves
in order to maintain the market shares that each producer held prior to 1996
when a lawful cement cartel existed and was regulated by exemptions to the
competition legislation. The agreement was implemented up until this year
through highly disaggregated sales information each producer submitted to the
Cement and Concrete Institute of South Africa ("C&CI") through an audit firm
appointed by C&CI. The four cement producers are the main members of C&CI.
In addition, there was an agreement that PPC would not compete in the Northern
Natal market in exchange for Lafarge not competing with PPC in the Botswana
market.
In exchange for immunity from prosecution PPC has agreed to cooperate fully with
the Commission until the investigation and Tribunal proceedings are finalised.
In terms of the agreement reached PPC must also stop its involvement in cartel
activity and refrain from submitting competition sensitive information to the
C&CI.
The problem with competitors dividing markets between themselves is that they
successfully shield themselves from competition and can thus price above
competitive levels with no opposition or alternative from a competitor.
The Commission will now proceed with its further investigation of this matter
with PPC`s cooperation.
ENDS
Further info:
Keitumetse Letebele, HOD: Communications
012 394 3183/ 082 783 3397/ keitumetsel@compcom.co.za
Date: 11/11/2009 07:05:21 Produced by the JSE SENS Department.
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