Commission will look into cement price hikes.

Posted On Monday, 11 November 2002 02:00 Published by eProp Commercial Property News
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Pretoria - The Competition Commission would look into price increases by cement makers, due to come into effect next year, if concerns were expressed about them, it said at the weekend. 


Construction IndustryThe commission's comments follow complaints by some buyers that the three biggest cement producers in the country - PPC, Alpha and Lafarge - had notified them of price increases above 20 percent from next year.

Peter Lord, the owner and chairman of concrete product manufacturers Echo Floor, Echo Prestress and Fastfloor, said: 'I don't know how they can justify it. PPC has just announced a 45 percent increase in attributable profit.

'What is a surprise is that the cement cartel was abolished in 1996 but cement manufacturers seem to be acting in concert.

'They're all talking about the same increase, which seems remarkable, and all have come up with the same reasons at exactly the same time. I understood that was anti-competitive.'

Peter Nelson, PPC's financial director, described suggestions that its cement prices would increase by more than 20 percent next year as nonsense.

'Normally, we have two price rises in a year and take into account cost inputs and what is happening in the market. It has been a responsible approach and our price increases have been around the producer price index and inflation mark.

'Obviously the currency has also impacted on the cost of fuel and imported consumables.'

Geoff Parr, the chief economist at the Competition Commission, said the commission normally responded to a complaint submitted to it by somebody affected by price rises or collusion.

But provisions of the Competition Act with regard to restrictive practices allowed the commission to initiate a complaint.

'If there is concern, we will look into it. It's too early to tell if price increases are excessive and we aren't aware that they will all be implemented simultaneously and of any collusion.'

Parr added that it had been reported that many of the cement manufacturers' customers were on long-term contracts and increases of 20 percent to 30 percent were 'not so bad if prices were set many years ago'.

Last modified on Friday, 04 October 2013 18:52

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