Cement companies investigated for alleged cartel involvement

Cement companies investigated for alleged cartel involvement
Published: 13 March 2007

The Brazilian federal antitrust investigator (SDE) is probing eight cement manufacturing companies for possible involvement in a cartel, government news service Radiobrás reported.  
 
The SDE, a division of the justice ministry, opened its investigations on March 8 following accusations by an ex-employee of  Votorantim Cimentos that the companies agreed upon prices and conditions of payment.  
 
The companies under investigation are Votorantim, Camargo Corrêa, Holcim,  Lafarge do Brasil (local subsidiary of French company Lafarge), Cimpor, Cimento Nassau, Soeicom and Itambé which together represent 90% of the cement manufacturing industry in Brazil.  
 
With the exception of Votorantim, the companies have all refused to comment upon the case until the nature of the SDE investigations is clear.  
 
Votorantim released a statement affirming its "respect for the laws of the country" and good market competition practices. The company also declared that it would cooperate with the SDE and other authorities involved to clarify its position.  
 
The former Votorantim employee making the accusation stated to the SDE that directors of the eight companies met regularly to establish prices and agree upon the regional division of the market.  
 
The companies are also accused of excluding concrete manufacturers from the market by selling cement at prices higher than those charged to manufacturers that formed part of their group.  
 
If the cement companies are unable to defend themselves from the accusations, they may face fines of between 1% and 30% of their 2005 revenues.