Luzhkov calls for regulatory action over cost of cement, Russia

Luzhkov calls for regulatory action over cost of cement, Russia
Published: 16 October 2007

Mayor Yury Luzhkov said last week that he would seek action from the Federal Anti-Monopoly Service over concerns that lack of competition in the cement sector was stifling the country’s building boom. 
In a statement, the Mayor’s Office singled out for particular criticism acquisitions made in spring 2005 by leading market player Eurocement that raised the company’s share of the market dramatically. Creeping monopolization in the industry has led to a relentless rise in the cost of cement, the statement said.  
Eurocement’s acquisitions in 2005 included the purchase of cement assets owned by Inteko, a company controlled by Luzhkov’s wife, Yelena Baturina.  
In total, just nine companies control around 85 percent of the cement market, an industry report released in August by the CentreInvest Group said. Eurocement alone controls over 40 percent of the market, according to the report.  
"The galloping growth in the price of this fundamental building material has taken on a very threatening character," the Mayor’s Office said in a statement.  
According to statistics from the Mayor’s Office, the end price for 1 ton of cement, including taxes and delivery charges, has risen from 1,440 rubles ($55) in 2005 to more than 5,000 rubles.  
Speaking recently at a United Russia event, Luzhkov warned that the staggering rise in cement prices over the past few years could stand to undo government efforts to provide affordable housing for low-income earners around the country.  
"The increase in the price of cement could torpedo the national project and that would be inconceivable," Luzhkov said, the mayor’s press office said in a statement.  
"Prices for cement must be stabilized by the strengthening of the federal anti-monopoly legislation," Luzhkov said.