UK regulators to force Lafarge Tarmac to sell plants

8th Oct 2013 07:41

UK regulators are set to order building materials joint venture Lafarge Tarmac to sell one or more cement plants to encourage competition in the industry.The Competition Commission will provisionally require Lafarge Tarmac to sell a cement plant and accompanying ready mix concrete plants if necessary to allow a new player into the market.It also plans to increase competition among suppliers of ground granulated blast furnace slag, a partial substitute for cement, by forcing them to sell production plants.The moves are part of the commission's provisional decision following an investigation into the supply of aggregates, cement and ready-mix concrete in Britain.In May, the commission found that the structure and the behaviour of the industry was limiting competition by helping the three largest producers, Lafarge Tarmac, Cemex and Hanson, to co-ordinate strategies, driving up prices for all cement users.Professor Martin Cave, CC Deputy Chairman and Chairman of the Inquiry Group, said the moves would allow a new producer to change established market patterns and force existing players to compete more.The commission also plans to overhaul the flow of industry information channels such as price announcement letters and industry data."For a long time, these channels have given producers too much awareness of how their counterparts are performing and their future pricing strategy," Cave said."These measures will go a long way towards establishing a more competitive market for customers. The fundamental importance of cement to the construction and building sectors and the amount of such work that is funded by the public purse only underlines the need for these actions."The commission will publish its final report next January and will now invite responses.PW