Cement makers contradict competition council

Cement makers contradict competition council
Published: 18 October 2005

Romanian cement producers reject statements of Competition Council, according to which the decision to sanction companies Lafarge, Holcim and Carpatcement, charged with forming a cartel, was followed by a  six per cent price decrease. "Because the cement market is very competitive, there has always been a downward tendency after a price increase. The only price increase with Carpatcement compared to 2004 happened at the beginning of the year, when contracts for 2005 were signed", Mihai Rohan, general manager of Carpatcement Holding (representative of HeidelbergCement in Romania), declared on Monday.

He mentioned that the prices on the list practiced by Carpatcement were maintained this year, among other reasons, due to the fact that cost increases this year had been forecasted and taken into account when prices fort this year were established. In their turn, Holcim officials stated that the company operated, at the beginning of spring, a price increase, but the decision was made because of price increases on electric power.

Competition Council officials stated on Monday, in a release, that prices for the cement produced by the three companies fined for forming a cartel dropped on average some six per cent after the sanctions. "In the interval May-August, for the most sold cement types –which were analysed in the investigation report -, producers registered an average price decrease of six per cent, a significant decrease considering that, at the moment, prices for construction materials are on an upward trend", the release mentions.

Representatives of competition authorities mention other types of cement produced by the three companies also registered a downward trend as far as prices were concerned. At the end of May, the Competition Council sanctioned the main cement producers on the domestic market with fines worth about EUR 27m, mainly because these had formed a cartel in order to illegally establish prices. All three companies reacted, stating they do not agree with this decision, but eventually paid the fines.