SA’s largest cement maker, Pretoria Portland Cement (PPC), confessed yesterday to being involved in market-sharing arrangements with other cement producers since the late 1990s.
The Competition Commission has blamed high input costs, such as those for cement, for rising costs of the government’s infrastructure programme.
But PPC CEO Paul Stuiver was quick to point out yesterday that its confession was about sharing market information with competitors, and not price-fixing and tender-rigging.
As a result of a confession and conditional immunity from prosecution from the commission, PPC will not pay a fine as long as it discloses all to the commission truthfully.
Stuiver would not reveal who PPC’s partners in crime were because of its agreement. In June, the commission raided the premises of several leading cement producers while investigating “cartel behaviour” in the building materials and construction industries.
The commission searched the offices of PPC , Lafarge, AfriSam (formerly Holcim SA) and Natal Portland Cement Cimpor.
If found guilty, the companies face administrative penalties of up to 10% of annual turnover.
Lafarge CEO Thierry Legrand said yesterday that the group was “extremely” surprised by PPC’s allegations.
“We have nothing to confess because our internal investigation has shown that we have not broken any competition laws locally.
“We continue to co-operate with the commission. PPC’s confession (are) allegations,” he said. An internal investigation carried out after notice of the commission’s investigation found historical market-sharing arrangements with other cement producers, Stuiver said.
“These were introduced into the organisation under the guise of autonomous behaviour by a few former employees who knew about the arrangements and made ongoing arrangements to disclose detailed sales information through the Cement and Concrete Institute,” he said.
“Following our own internal and external investigation we made sure that the group was not involved in tender-rigging and price-fixing.”
Stuiver said the investigation had to do with previous employees, who thought they were doing their jobs.
“Despite the leniency we had to come clean.”
Attempts to obtain comment from AfriSam and Natal Portland Cement Cimpor were fruitless.
During the search, the commission seized documentation and electronic data, which it evaluated as part of the investigation. Stuiver said a concern of the commission was the practice of submitting detailed sales information through the Cement and Concrete Institute.
He said PPC would stop the practice immediately, and the commission had indicated it would facilitate a process to determine an appropriate means for publication of industry sales statistics.
The commission’s investigation was still continuing.
“For us the most important thing is to stop cartel behaviour,” said Nandi Mokoena, manager of strategy and stakeholders relations at the commission.
“It’s up to customers to claim damages,” she said. The law allowed for that, Mokoena said. With Bloomberg
mokopanelet@bdfm.co.za