5 December 2009 by

PPC admits to market division and is granted conditional leniency

In June this year, the Competition Commission (the Commission) raided the premises of several leading players in the cement industry, as part of its broader investigation in the building materials and construction industries. In a recent development, Pretoria Portland Cement Company (PPC) has been granted conditional immunity from prosecution after approaching the Commission following the dawn raid and confessing to its participation in a cartel.

Four cement producers allegedly engaged in market division by submitting disaggregated sales information to the Cement and Concrete Institute of South Africa (C&CI), of which they are members. PPC also allegedly entered into an agreement with Lafarge Industries South Africa in terms of which PPC agreed not to compete in the Northern Natal market where Lafarge is present, so long as Lafarge refrained from competing with PPC in Botswana.

PPC's immunity is dependent on it co-operating fully with the Commission in prosecuting the other cartel members until proceedings are completed and disclosing the full extent of their cartel activities. PPC must also cease to be involved in any collusive activity with its fellow cement producers and refrain from submitting competitively sensitive information to C&CI.

If found guilty of collusion, the other members of the cartel face paying administrative penalties of up to 10% of each of their annual turnovers.

Chris Charter, Director Competition and
Pia Harvey, Senior Associate, Competition

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