UK Competition Commission planning to create new cement producer

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UK: The UK Competition Commission (CC) has provisionally decided that Lafarge Tarmac should sell a cement plant to increase competition in the UK cement market. The CC is also proposing to limit the flow of information and data between cement producers and to increase competition in the supply chain for ground granulated blast furnace slag (GGBS).

"The best way to disturb the balance of a market where producers have focused on retaining their respective market shares rather than competing is to create the opportunity for a major new entrant," said CC Deputy Chairman and Chairman of the Inquiry Group Professor Martin Cave.

In detail the CC has provisionally decided that Lafarge Tarmac should be required to choose between divesting either its Cauldon or Tunstead cement plant. The purchaser of the divested cement plant should be able to acquire a limited number of ready mixed concrete plants from Lafarge Tarmac subject to the purchaser's total internal cementitious requirement being capped at 15% of the acquired cement production capacity. The buyer would have to be approved by the CC and not be one of UK's existing cement producers.

Data currently published by the Minerals Products Association (MPA) and the Department for Business, Innovation & Skills should be delayed by no less than three months from the time period to which it refers before it can be made public. UK cement producers will also be prohibited (with a small number of specific exceptions) from providing their sales and production data to any other private sector organisation.

UK cement suppliers will be prohibited from sending generic price announcement letters to their customers. Instead, they should send letters that are specific and relevant to the customers receiving them.

Subject to further consultation on the GGBS supply chain, Hanson should divest two of its GGBS production facilities and Lafarge Tarmac should divest two of its granulated furnace slag production facilities, again to a suitable purchaser approved by the CC but not to another UK cement producer.

Responses to the CC's suggested measures will now be gathered before it publishes its final report by 17 January 2014.

Last modified on 09 October 2013

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