Cement price sparks controversy, suspicions of monopoly

Autor: Adrian Mirsanu 19.08.2003

The three cement producers operating on the Romanian market, Lafarge (France), Holcim (Switzerland) and HeidelbergCement (Germany), are the target of serious accusations regarding a "threesome" agreement aimed at setting high prices for cement.

The allegations, which have been denied by the three companies, are included in a report that was presented late last week during a government meeting by the Economy and Trade, Transports and Constructions, and Finance ministers. Moreover, the Competition Council is also conducting an investigation linked to the cement market. This is the first time authorities have taken a strict stand against the large private producers.

The cement market was entirely privatised between 1997-1999. Las t year, it amounted to 4.7 million tonnes. Demand on the Romanian market was last year covered 35% by HeidelbergCement, 34% by Lafarge and 31% by Holcim, each operator owning three plants.

The report submitted to the government states that cement industry producers have set an average price of $80 (71 euros)/tonne for the local market. "Certain unproved agreements reached between industrial groups are supposedly controlling the local cement market," reads the report, quoted by Mediafax.

However, representatives of CIROM (a patronage within the cement industry including the three investors) maintain that prices were lower on the Romanian market than in the other former socialist states last year, registering an average level of 48 euros ($54) per tonne. Authorities say the price of cement does not exceed the level of $60 (53 euros)/tonne on competing markets such as Poland, Hungary and the Czech Republic. adrian.mirsanu@zf.ro