Ohorongo considers next move as merger prohibited

Ohorongo considers next move as merger prohibited
Published: 29 November 2010

Ohorongo Cement was surprised by the decision of the Competition Commission last week to prohibit the merger of Ohorongo with AfriSam Namibia Cement. 



In a press release, Ohorongo Cement, Ms Kirsten Günzel, public relations officer of Ohorongo, said: “We were always under the impression that it was the wish of Namibians to have control over their own supply, distribution and selling of cement as described in our application. 

“The intended agreement between the parties is precedent in the Namibian history. 



“Namibian firms and service providers often struggle with foreign competition, especially from South Africa. Ohorongo wanted to show that Namibian firms can indeed successfully compete against international players. It was never our intention that AfriSam would distribute our products. 



“Ohorongo would have full control over the entire process and all management decisions. This understanding has also been clearly set out in the application documents.”



The Competition Commission said last week that the merger of the companies was prohibited “on the grounds that the supply agreement can potentially lead to the prevention or lessening of competition of restrict trade or the provision of any service or to endanger the continuity of supplies or services in the cement market”. 

“The proposed merger has significant implications on the anti-competitive nature of the supply and pricing of cement in the Namibian Market,” the Commission found.

 

“We are surprised that, if there would have been some misunderstanding, that this issue was not clarified with us beforehand, especially where there had been such close co-operation throughout this process,” Ms Günzel said regarding the supposed misunderstanding of the Commission of the intentions of Ohorongo.



“We have not as yet made a decision how to proceed and will only decide after a detailed analysis of all the documents and circumstances have been completed and hope to clarify the situation shortly. In the meantime we wish to assure Namibia that we remain committed to producing, selling and marketing the finest quality cement at Africa’s most modern and environmental friendly cement plant near Otavi.” 

In its verdict the Commission said that Ohorongo Cement and AfriSam Cement can appeal its decision to the Minister of Trade and Industry.