Taiwan Regulator fines cement cartel

Taiwan Regulator fines cement cartel
15 December 2005

Taiwan’s Fair Trade Commission said Thursday it fined 21 local cement companies a total of NT$210m (US$6.3m) for price fixing between 2000 and 2003.  Almost all of Taiwan’s major cement manufacturers and silo holders or distributors jointly raised domestic prices during that period, the commission said.  The companies include Taiwan Cement Corp, the island’s largest cement producer by revenue, and Tung Woo Corp, a local distributor wholly owned by Cemex.
Taiwan Cement and Tung Woo were fined NT$18m each, the largest of penalties ranging from NT$5m to NT$18m. The other companies ordered to pay fines include Asia Cement Corp, Lucky Cement Co and Universal Cement Corp, Taiwan’s second, third and fourth-largest cement producers by revenue, respectively. 
The commission said it imposed the fines after a four-year investigation. It found that the cement manufacturers controlled local prices by preventing foreign cement groups from setting up local marketing channels.  The commission said the price fixing happened after Taiwan’s cement makers filed an anti-dumping suit against South Korea and the Philippines in June 2001. 
"Local cement manufacturers reached an agreement to conduct anticompetitive practices in order to dominate the market and hike up the price of domestic cement," the commission said in its statement.  Local cement prices, which averaged around NT$1400 per tonne in 2001, rose to around NT$2050 a tonne in 2003, said Yu Chao-chuan, vice chairman of the Fair Trade Commission. 
Ed Huang, vice president and spokesman of Taiwan Cement, denied his company had engaged in price fixing and said it will file a legal complaint against the commission’s findings.  "If we engage in price fixing, how come local cement prices are still lower than that of neighboring countries, such as Thailand, Japan and South Korea?" Huang said. 
He said local cement prices collapsed in 2000 and 2001 due to dumping by foreign manufacturers, but later rebounded to more accurately reflect costs.  Representatives of Asia Cement and Universal Cement also disagreed with the commission’s findings, and said their companies plan to file a legal complaint.  Lucky Cement’s spokesman declined to comment. Published under Cement News