The Colombian units of Cemex and Holcim have refused to freeze cement prices, despite the fact that the country’s biggest cement company Cementos Argos has brokered a deal with the government to do so until July 2007, local press reported.
"We have always believed and we are sure that cement prices are not the result of the supply by the producer, but are the result of a dynamic between supply, demand and competition and we continue to think the same," César Constaín, president of Cemex Colombia was quoted as saying by newspaper La República.
"There is [nothing]... that indicates to us the need to modify prices," the executive said, according to daily El País, although he said the company respected the Argos offer and understood that it had been well received by the government.
The Colombian subsidiary of the Swiss cement maker Holcim also affirmed it has not subscribed to any price agreement with the authorities and was not legally able to come to such an arrangement with the participation of its competitors.
"These agreements go against business policies and could be a violation of the regulations of free and fair competition," the company said in an official statement cited by El País.
Holcim said it has a pricing policy using a number of different criteria to decide the costs of its products.
"One of these factors is the so-called market signals and expectations, which refers, among other things, to the price applied by competitors in different regions."
Cementos Argos, with a domestic market share of 51%, recently agreed with the government that it would not raise cement prices until July 1 at the earliest.
As a result, a 50kg sack of Argos cement will now sell at 16,000 pesos (US$6.83), while cement for low-income housing will cost 10,000 pesos per sack.