Cemex anti-competitive?

Cemex anti-competitive?
Published: 16 August 2004

Jordan’s CTI Group alleged on Friday that Mexico’s Cemex, the world’s No 3
cement maker, was seeking to prevent competition in its lucrative home
market by blocking a ship from unloading there. Nader Dajani, head of
Amman-based CTI, a holding company for cement trading houses and owners of
floating cement terminals, said this was the latest move in a successful
drive by the world’s four biggest cement producers over the past decade to
strangle competition from independent shippers.

The CTI vessel Mary Nour, carrying 26,000t to of Russian cement, awaits the
permission of Mexican authorities to unload its cargo a month after Cemex
won a court injunction to block it from docking in the Gulf port of Tampico.
Dajani told Reuters: "By blocking our vessel’s discharge, Cemex are ensuring
that no cement imports enter their market to provide alternative supplies at
competitive prices." Cemex has over 50 percent of its home market, where
cement prices are almost double those in Asia and the United States, he
said.

"Never has anyone managed to penetrate the Mexican market. It’s too
protected as a market. We were the first," said Dajani, whose firm sells and
transports millions of tonnes of cement annually across the world.

Cemex said, however, that the Mary Nour planned a manoeuvre with a second
ship that would pose a safety hazard in Tampico, the entrance to the Panuco
River, where hundreds of ships, including Cemex’s, load and unload
merchandise.

"The only action Cemex has taken was filing an injunction with the purpose
of guaranteeing safe navigation in the Panuco River," said spokesman Gerarde
de la Torre on Friday. "Cemex favours free cement imports," he added.

Dajani said that Cemex, while barring importers from entering its own
market, has operations in more than 30 countries and is aggressively
penetrating Middle East markets with its own terminals.  "They are using
their own vessels to deliver cement in Algeria, Libya, Spain and Middle
Eastern markets," he added.

Dajani said the importers of the Russian cement, Commercio para el
Desarrollo Mexicano, would appeal to higher courts in Mexico to get the
injunctions suspended.

CTI plans to sell between 400,000-500,000 tonnes annually in Mexico to gain
a 1-2 percent share at most of the $3.5 billion plus market, which poses no
threat to Mexican cement producers’ dominance, Dajani said. "We are going to
take a market share ... That’s the principle; they are fighting us on this
basis," he said.