PPC profit falls 25%, South Africa
South African cement producer Pretoria Portland Cement (PPC) on Wednesday reported a 25 per cent drop in net profit for the 2009 financial year to R1.1bn.
PPC had recorded a R1.5-billion net profit in the 2008 financial year, but warned, in October, that a finance charge related to a broad-based black economic empowerment deal would impact on its earnings.
The group’s revenues increased by 8 percent to R6.8-billion in the year ended September 30, 2009, compared with R6,2-billion the year before.
Meanwhile, the company also admitted in the past, it had participated in "market-sharing" activity.
PC CEO Paul Stuiver said in a statement that PPC had concluded a conditional leniency agreement with the Competition Commission, with regard to the commission’s earlier investigations into the cement market.
An independent investigation conducted by legal advisers had "revealed market-sharing arrangements" with other cement producers in the 1990s. "These were introduced into the organisation under the guise of being autonomous behaviour by a few former employees who knew about the arrangements and made ongoing arrangements to disclose detailed sales information through the Cement and Concrete Institute," said Stuiver.
PPC would stop the submission of this information with immediate effect, he added. In terms of the agreement with the Competition Commission, the cement producer would have immunity from prosecution, conditional on ongoing cooperation with the commission.
However, PPC’s admission is not swaying the other three cement producers to confess to collaboration in anti-competitive practices. Lafarge, AfriSam and NPC-Cimpor who together with PPC dominate the cement market have maintained their silence and innocence even after the commission granted PPC leniency on condition it “told all” about industry collusion.
Charles Naudè, chief executive of AfriSam, said yesterday (thurs) it had initiated an intensive internal investigation following the commission’s raid in June to ensure it had been and continued to adhere to competition law but to date this investigation had not revealed “any inappropriate activities”.
Published under Cement News
