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PPC admits cement cartel, catching rivals cold  Comments
November 12, 2009

By Roy Cokayne


Disclosures to the Competition Commission by Pretoria Portland Cement (PPC) about market-sharing arrangements with its competitors appear to have caught the three other major cement producers off guard.

The commission yesterday confirmed it had granted listed cement and lime producer PPC conditional leniency from prosecution under the Competition Act in exchange for the company's disclosure of "all cartel activities between PPC and its competitors".

Terry Legrand, the chief executive of Lafarge South Africa, said it was "extremely surprised by the allegations". Lafarge SA had a strong "complaints programme" and any breach resulted in disciplinary action but it was not aware of "any misconduct with any cement producer".

Pieter Strauss, the managing director of NPC-Cimpor, said the company was preparing a media statement and declined to comment.

AfriSam spokesman Ntaga Mojapelo said the company was revising a media statement, but no such statement had been received before going to press.

The commission said PPC had applied for leniency shortly after the commission raided and seized documents and electronic data from the premises of PPC and Lafarge SA, AfriSam and Natal Portland Cement on June 24 this year as part of its investigation into possible collusion in the cement industry.

It said PPC confirmed in its application for leniency the existence of a cartel to divide markets among the four cement producers to maintain the market share that each producer held prior to 1996, when a lawful cement cartel existed and was regulated by exemptions to the competition legislation.


The commission said the agreement was implemented until this year through highly disaggregated sales information each producer submitted to the Cement and Concrete Institute of South Africa (C&CI) through an audit firm appointed by C&CI.

It said there was also an agreement that PPC would not compete in northern KwaZulu-Natal in exchange for Lafarge SA not competing with PPC in the Botswana market.

The commission investigation is continuing.

Paul Stuiver, PPC's chief executive, said "about three or so" former PPC employees were involved in market sharing arrangements with its competitors but he denied PPC was involved in price-fixing.

Stuiver said these arrangements were kept secret from the rest of the company and that PPC chose to come clean, even though it did not have any guarantee from the commission of being granted leniency.

  • PPC said yesterday it was concerned about the impact of the proposed hikes in electricity tariffs on cement prices.

    Stuiver said electricity only made up 5 percent of the total cost of PPC's cement prices, and he was concerned about the other 95 percent of the company's costs.
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    Showing page 1 of 1 comment pages, 6 total comments
    12 Weeks ago Wolf wrote :
    Vusi hit the nail on the head. This is a whole lot of hype, Paul nailing his predecessors and hoping to get the glory of being 'honest' - come on people. Some of the senior management has been around since the days of Cooper & De Beer, the distributors of CDSA the cartel it's self. Lafarge and AfriSam have personnel from the same era but that does not mean the pricing or the cement sales into the geographic area's are still fixed as they once were. Lets look at the comments from the man himself: Paul Stuiver said; "Management and the board have taken full responsibility and we believe that we have acted quickly, decisively and correctly by cooperating with the Commission. We were shocked and disappointed when these issues were revealed and we apologise. We want to reassure the public and all who work for PPC that we do not tolerate this kind of behaviour. We will get rid of it and ensure that this does not happen again." Stuiver added; "Although PPC has received conditional leniency, the industry investigation by the Commission is still ongoing and they have asked that we do not share further information on specific events, the timing or the people involved. What I can say is that people who seem to have been involved, are no longer employed at PPC." And then followed up a day later: Former employees introduced a practice of sharing information on sales. While current employees continued the practice, they won't be punished as they weren't aware the practice wasn't allowed, Stuiver said. This just smacks of Joost vd Westhuizen's it wasn't me in the video "but read my book" and not to mention Bill Clinton ….. Man you got to love people.
    12 Weeks ago Vusi wrote :
    Much ado about nothing. The headline is misleading. There was no cartel or market-sharing. Market sharing is different from sharing market information. This market information was given to the C&CI who were supposed to aggregate it so it would lose its identity. Makes a good story and makes the competition commission feel good about themselves. This doesn't count - need to get rid of the real cartels and monopolies - i.e. all the state owned enterprises, non-value adding government departments, the unions, etc. That would be a real victory. By the way this doesn't and wouldn't effect cement prices one little bit. And I am afraid JohnnyB this hasn't contributed one cent to the rise in the prices of the stadiums.
    12 Weeks ago The Disciple wrote :
    It is really tragically sad to observe the lengths that most people go to in their quest for wealth; this, in virtually every instance, as a means to acquiring all the totally unnecessary things that this world has to offer. What man or woman, at the end of their short life on earth, who look back on their time on earth to discover that all they had and enjoyed here was only everything that they ever had need of, and nothing more, would enter the spirit realm with eternal regret and remorse. Only an absolute fool could reason like this; and God does not suffer (tolerate) a fool. - And what of those, who, through their greed and wanton corruption, have had everything that their lustful flesh demanded, get to the cross-over place to find that there is absolutely nothing waiting for them that they can even remotely identify with. How great will be their rejoicing at their non-existing, eternal prospects. Time to change has arrived. In fact; from a very brief news flash on DSTV channel 403 last night, it is very clear that there is no more time to waste on chasing the wind!!! Time to wake up is "NOW." NOT TOMORROW!
    12 Weeks ago Pilne wrote :
    PPC has a one of the lagest billboards in Botswana on their silo at Naledi Gaborone with the following slogan. " More than 95% of all constuction in Botswana is done with PPC cement" Now it all makes sense.
    12 Weeks ago JBravo wrote :
    Another crooked deal to hit consumers in the pocket...This lying and manipulative figures need to be locked up.Parliament must toughen up sentences for this type of behaviour.At the end of the day it is the consumers that take the flack for uncompetetive prices...No wonder the costs of building 2010 stadiums has more than doubled...Utterly disgusted.
    12 Weeks ago Geyser wrote :
    Every big business in SA is in collusion as cartel. The big business is running rings around the consumer and the incompetent and inexperienced government bureaucracy. SA consumers are being fleeced left and right by the crooks in government and big business and unless something very drastic is undertaken by consumers and trade unions, we are going become another Zimbabwe.
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