Trade watchdog raids cement producers

The commission said it searched the offices of Pretoria Portland Cement (PPC), Lafarge, AfriSam (formerly Holcim SA) and Natal Portland Cement Cimpor (NPC-Cimpor) on Wednesday.

The probe is likely to alarm shareholders in these companies, given the steep fines meted out to others for cartel activity.

If found guilty, the companies face administrative penalties of up to 10% of their annual turnovers.

“During the search, we seized documentation and electronic data, which we will now evaluate as part of our investigation,” said commissioner Shan Ramburuth.

“Should we find the firms have engaged in anticompetitive conduct, we will prosecute them for breaking the law.” Competition authorities in Brazil, the European Union (including Germany) and Egypt were also investigating the international units of some of the companies for cartel behaviour, the commission said.

The raids were carried out simultaneously in five places in Gauteng and KwaZulu-Natal, and come almost two years after the commission raised concern about the above-inflation price increases of several building materials, including cement.

“The commission believes anticompetitive behaviour in this market could be substantially increasing the cost of SA's infrastructure programme, with negative effects on the economy,” it said.

Of the applications for corporate leniency received by the commission in the past financial year, about 25% were from the construction industry.

PPC, SA's largest cement maker, declined to comment.

Lafarge spokeswoman Ilsa Boshoff said the company did not have any evidence of its involvement in any cartel behaviour but would co-operate with the probe.

Afrisam CEO Charles Naude said the company was surprised by the raid but it would co-operate with the investigation. NPC could not be reached for comment.

Source: Business Day

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