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Competition Commission conducts 'dawn' raid on AECI division

Chemicals and explosives maker AECI (AFE) says the Competition Commission on Thursday (4 December 2014) conducted a "dawn" raid at its Akulu Marchon division‚ which manufactures surfactants.

Surfactants can act as detergents‚ wetting agents‚ emulsifiers‚ foaming agents and dispersants in household detergents‚ cosmetics and toiletries.

On Friday, Dean Murray‚ AECI specialty chemicals executive and chairman of Akulu Marchon‚ said that in line with the group's "dawn raid policy"‚ it would co-operate with commission authorities in the information-gathering stage of their investigations.

The commission said in the early hours of Friday morning it had conducted search and seizure operations at the offices of both Akulu Marchon and InvestChem near the Kempton Park industrial area in Gauteng. Both firms manufacture and supply a range of surfactant products.

"The commission has reasonable grounds to believe (that) from about 2003 the parties held meetings and agreed to fix the prices for surfactants and allocated customers between each other. The commission understands the alleged conduct is ongoing‚" it said.

The surfactants include chemical products such as sulphuric acid‚ ether sulphate and sodium dodecyl benzene sulphonate‚ which can be found in dishwashing liquids‚ soaps and car cleaning products.

Murray said InvestChem was a "major competitor" of Akulu Marchon. He also said AECI was not expecting the raid.

"Not at all. We are not aware of anything at the moment. We have strong ethics policies in place and people are well trained in them‚" he said.

"I can honestly say it is a very aggressive and competitive market out there (for surfactants)."

But he also said the commission was probably investigating "certain individuals" who work or had worked at Akulu Marchon‚ including senior and general staff.

"They interviewed several people at the site yesterday - it is part of their process‚" he said.

InvestChem is the South African subsidiary of InChem Holdings‚ a Bermuda-based company with other subsidiaries in the US and Portugal.

It manufactures in Spartan‚ Johannesburg‚ which also serves as a distribution centre for Gauteng and surrounding areas. Warehousing and distribution are also carried out in Cape Town. The company has 96 employees‚ according to its website.

The commission said it was conducting the raids with due regard to the rights of the companies and all affected people. It had seized documents and electronic data‚ which it would analyse to determine whether a contravention of the Competition Act had taken place.

"The information ... obtained from today's operation will enable the commission to determine whether or not the parties have ... engaged in collusive conduct. However‚ as part of any investigation‚ we also wish to urge anyone‚ be it business or individuals‚ with further information to come forward and assist the commission in concluding this investigation‚" commissioner Tembinkosi Bonakele said.


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