SA’s largest cement producer, PPC, can finally put the infamous cement cartel case behind it after the Competition Tribunal granted it final immunity from prosecution and penalty on Wednesday.
PPC has been under severe pressure in 2020 while construction was halted earlier in the year after the hard economic lockdown. It is also trying to decrease its debt and is looking to raise capital next year.
In October, the PPC board said the company had to raise a significant chunk of new capital or risk closure.
The company is in the midst of a restructuring programme that could see it tap shareholders for between R750m and R1.25bn through a rights issue, analysts say.
But on Wednesday, it received some respite when SA’s competition authorities said it would not be fined or face legal proceedings for collusive behaviour, which took place more than a decade ago.
“The Competition Tribunal has confirmed a settlement agreement between Pretoria Portland Cement Company Limited (PPC) and the Competition Commission which, in effect, grants the cement company, a successful leniency applicant, final immunity from prosecution in the so-called Cement Cartel case,” the tribunal said in a statement.
“PPC has also been granted immunity from an administrative penalty or a fine,” it said.
PPC CEO Roland van Wijnen said: “I can confirm that we have signed a final settlement agreement and as a company we are pleased that this case, which was initiated more than a decade ago, has been closed.”
Small Talk Daily Research fund manager Anthony Clark said PPC appeared to have been saved by the slowness of the competition authorities.
“The PPC of today is totally different from 10 years ago. The slow wheels of justice have saved PPC from a fine which could have broken the company. Cement companies were colluding on sales as they tried to keep prices constant. Now in SA we can’t get cement statistics as this was banned following the Competition Commission’s probe,” he said.
Clark said PPC was like a fallen angel of a company which needed to pull itself together in 2021 after it raised capital.
The cement industry cartel case stemmed from a Competition Commission investigation launched in 2008, which probed alleged anticompetitive conduct in the cement industry in SA.
The allegations were that PPC, NPC, Lafarge and AfriSam had engaged in cartel conduct between 1995 and 2009.
The commission found in 2009 that cement companies had been colluding over prices, amounts sold and where. Meetings were held between cement producers in SA and in exclusive venues in Europe.
The JSE-listed PPC admitted to being part of the cartel and was granted conditional leniency in terms of the Commission’s Corporate Leniency Policy, in exchange for it helping the commission to prosecute the remaining cartel members.
The commission had alleged that the companies had agreed in 1995 to allocate each cement producer the market share it had held before 1996 when a lawful cement cartel existed under apartheid. The cartel would then collude and divide up cement markets in SA, Botswana, Lesotho, Swaziland and Namibia.
A second agreement was reached in 1998, refining the 1995 agreement and reallocating market shares.
andersona@businesslive.co.za
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