Colombian cement producers agree price cut

Colombian cement producers agree price cut
09 February 2006

Cement makers in Colombia have agreed with the government to reduce their prices after the country’s antitrust authority began an investigation into whether three main cement companies formed a cartel.  "Concerned by the evolution of nationwide cement prices, the government and businessmen from the sector reached the conclusion that the country requires a reasonable, stable and non-speculative price," the President’s office said in a statement late Tuesday. "This stability implies a lower price than the current one." 
The cement producers have agreed to cut prices for the 50kg cement bag by 14 per cent in Bogota, according to an example cited by the statement.  The decision to reduce prices comes after the Colombian antitrust authority started an investigation on alleged price collusion by the main cement producers in the country. 
The superintendent of commerce and industry, Jairo Rubio, Tuesday said his institution detected unusual simultaneous price increases from Cementos Argos SA Holcim and Cemex.  Rubio said preliminary investigation led the superintendency to suspect the existence of a cement cartel. 
 The investigation will continue despite the agreement to reduce cement prices, said Ana Maria Escobar, a spokeswoman at the Superintendency. The companies may face a fine as high as 816 million Colombian pesos (US$359,000), she said. 
Rubio said Holcim raised its prices twice in December - first by eight per cent on Dec 9 and then by 19 per cent on Dec. 19. Cementos Argos SA hiked cement prices by 46 per cent on Dec. 26, while Mexico’s Cemex SA raised rates by 48 per cent on Dec. 23, he added. 
A spokeswoman from Holcim’s Colombian unit said the company didn’t collude with its competitors. "It’s against the law," she said.  Andres Londono, press officer for Argos, said the company won’t comment on these recent events. Juan Carlos del Riego, Cemex Colombia’s vice president for planning, didn’t return telephone calls seeking comments. 
In Congress, Senator Hugo Serrano recently said that the three main cement makers in Colombia simultaneously cut cement prices by 40 per cent last year in a move allegedly aimed at harming small local producers, and then also raised prices simultaneously.  In November, Argos took advantage of financial difficulties at its smaller competitor Cementos Andinos and bought it for $192m.  The antitrust agency is still evaluating the merger between Argos and Cementos Andinos, and may decide to reject the proposal as a result of the investigation, Rubio said. 
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