• Lafarge Zambia and Mpande Limestone fined 10% of their annual turnovers for the year 2019 for price fixing.
• Dangote Cement has been granted full leniency for cooperating with CCPC during investigations.
• The three firms have been ordered to revert to the pre-cartel prices ranging between USD 4.50 US dollars and USD 5.
The Board of Commissioners of the Competition and Consumer Protection Commission (CCPC) has fined Cement Companies for Anti-Competitive Trade Practices and Orders Adjustment of Prices.
Commission Senior Public Relations Officer Namukolo Kasumpa disclosed to Money FM News that Lafarge Zambia and Mpande Limestone Limited have been fined 10% of their annual turnovers for 2019 and another 10% of their 2020 annual turnovers for price fixing and division of markets, while Dangote Cement Zambia Limited was granted full leniency for having cooperated with the Commission during investigations.
Ms. Kasumpa said the Board has ordered Lafarge Zambia, Dangote Cement Zambia Limited and Mpande Limestone Limited to revert to the pre-cartel prices ranging between USD4.50 and USD5 for a period of one year from the date of receipt of the Board Decision.
She further revealed that the Board has also ordered the three Cement Companies to develop and implement compliance programmes in their respective firms within 90 days of receiving the Board Directive.
“Additionally, that Lafarge Zambia Plc, Dangote Cement Zambia Limited, Mpande Limestone Limited submit monthly average ex-works prices and any price adjustments be indexed to the exchange rate and be submitted to the Commission for review pursuant to Section 58 (1) of the Act; The Board has also ordered the three Cement Companies to develop and implement compliance programmes in their respective firms within 90 days of receiving the Board Directive.”
“Furthermore, the Board has directed Lafarge Zambia PLC, Dangote Cement Zambia Limited and Mpande Limestone to make undertakings within 90 days of receiving the directive that their respective employees should not engage in any anti-competitive behaviour and that the enterprises should not facilitate and/or participate in any anti-competitive conduct including the exchange of information,” Ms. Kasumpa disclosed.
She said cement industry plays a critical role in the country’s infrastructure development; hence the fixing of cement prices by the three Companies and setting of trade conditions undermined a competitive market and was detrimental to consumers.
“The construction industry is very important for Zambia’s economic growth, infrastructural development and employment generation and the cement industry plays a vital part of this infrastructure development. The fixing of cement prices by the three Companies and setting of trade conditions therefore undermined a competitive market and was detrimental to consumers.”
“While the Board of Commissioners takes cognizance of the role Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc, play in the economy in general and their contribution to employment creation, their conduct had the serious effect of undermining infrastructure development both private and public especially with Government’s continued thrust on infrastructure development projects from roads, schools, clinics and development of district centres among others.”
Meanwhile, Ms. Kasumpa disclosed that the Board of Commissioners has dropped charges against Zambezi Portland Cement Limited after it was established that they were not part of the cement cartel.
She said this was after an exhaustive investigation by the Commission initiated in January 2020, following CCPC’s observations of a sustained increment of cement prices from an average of K55 to K100 per 50Kg bag between July 2019 and January 2020.
Ms. Kasumpa added that the investigation which lasted for over 1 year revealed that the parties shared price adjustment proposals seeking approval for price changes before the implementation date and in some cases before they were approved by their respective management.
“The exchange of commercially sensitive information on future prices and rebates demonstrated that there was a ‘meeting of minds’ among the Respondents to pursue an agreed objective. The investigation established that company representatives from Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc held discussions and meetings which resulted in the development of a pricing philosophy to stop cement price reductions.”
“The investigations also established that the Cement Companies had agreed on a flat rebate of ZMW3 sometime in December 2019. The Board of Commissioners determined that the sharing or exchange of commercially sensitive information relating to future prices and rebates by Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc amounted to an agreement.”
According to Ms. Kasumpa, the Board has warned businesses that engage in Anti-competitive Business Practices to desist from such conduct, adding that the Commission remains steadfast in its commitment to eliminate any anticompetitive trade practices, which impact negatively on Zambia’s quest to promote a competitive business environment and ensure that ordinary consumers are not exploited.