South Africa: Cement makers quiet on new co-operator

South Africa: Cement makers quiet on new co-operator
Published: 21 May 2010

Cement producers AfriSam and NPC-Cimpor are remaining quiet on which of them has broken ranks and recently committed to fully co-operate with the Competition Commission in its investigation into the cement industry.

Lafarge SA yesterday denied it made any recent commitment to the commission.

Tembinkosi Bonakele, the deputy commissioner at the commission, confirmed this week that a second of South Africa’s four major cement producers had approached the commission and committed to co-operate with the commission’s investigation into anti-competitive practices in the cement industry.

Bonakele was responding to a query on whether any of the cement producers had initiated discussions with the commission aimed at reaching a consent agreement over contraventions of the Competition Act.

Pretoria Portland Cement (PPC) reported in November it had been granted conditional leniency by the commission after making disclosures about market-sharing agreements with its competitors.

NPC-Cimpor managing director Pieter Strauss yesterday said it had indicated from the start of the investigation that it would co-operate with the commission and this position had not changed.

Ntaga Mojapelo, a spokeswoman for AfriSam, said the company could unfortunately not respond to any questions on this matter as it was currently under investigation.

NPC-Cimpor and AfriSam both declined to respond to specific questions on whether they still maintained their innocence with regard to alleged contraventions of the Competition Act.

Lafarge spokeswoman Ilse Boshoff yesterday said Lafarge had not made any recent commitment to the commission, but its policy was to co-operate with the commission and was interacting with the commission when required. Boshoff stressed that the Lafarge group had a competition compliance policy that was implemented in all the businesses where it operated.

Eugene Schalkwyk, the legal manager at Lafarge SA, said it was still conducting an internal investigation to determine if the company had been involved in any inappropriate activities and ensure it was adhering to the provisions of the Competition Act.

Schalkwyk said the investigation was taking longer than expected because the period involved dated back to the late 1990s and early 2000 and most, if not all, of the people in charge of business at that time had either retired or moved on to other companies. This made it more challenging than expected to get interviews and meetings with these people to verify some of the allegations that had been made.

However, Schalkwyk said Lafarge SA was making progress and hoped to conclude the investigation soon.

In regard to the disclosure made by PPC that it was involved in a market-sharing agreement with Lafarge, Boshoff responded: "All issues are the subject matter of our investigation."

In its application to the commission for corporate leniency, PPC confirmed the existence of a cartel to divide markets among the four cement producers to maintain the market share that each producer held prior to 1996, when a lawful cement cartel existed and was regulated by exemptions to the competition legislation.

PPC also confirmed there was an agreement it would not compete in northern KwaZulu-Natal in exchange for Lafarge SA not competing in Botswana.