Cementos Andinos sues Cemex, Argos, Holcim

Cementos Andinos sues Cemex, Argos, Holcim
Published: 18 August 2005

The three biggest cement companies operating in Colombia - Cemex, Argos and Holcim - have been sued by a small competitor, Cementos Andinos, for alleged unfair competition, newspaper El Universal reported. Colombian firm Cementos Andinos, which has a market share of six per cent in the country, has accused its three big competitors, based in Mexico, Colombia and Switzerland, respectively, of agreeing to sell their products at artificially low prices to eliminate smaller rivals.

The story began in October 2004 when the price of cement in the country suddenly dropped from the usual level of US$9 to just US$6 per 50kg sack despite the fact that the construction sector was reactivating. "To eliminate the small producers, the three big companies, which control 91% of the market, have lowered the price with the aim of ruining [the other producers] and then buying them," senator Hugo Serrano was quoted as saying.

The senator has proposed a public debate where the parties involved would be invited to explain how cement prices have fallen even though demand has risen.

Despite Colombian authorities working to resolve this as soon as possible, this type of case can take up to two years, according to sector sources quoted by El Universal. "In two years this company could be just a memory of a small company that wanted to fight," Germán Lemos, lawyer representing the employees of Cementos Andinos was quoted as saying.

Due to supposed price war in the cement sector Cementos has been forced to lay off 120 employees and has reduced the salaries of others. These workers are asking for the three multinational firms to compensate them.