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Wed June 19 2019

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Lafarge Tarmac says cement shake-up is flawed

14 Jan 14 Lafarge Tarmac, one of the big four UK cement producers, has hit out at the Competition Commission’s plan to shake up the market by creating a fifth producer.

The Competition Commission is directing Lafarge Tarmac to sell a cement plant to a new entrant to improve competition in the market. [See report here.]

However, Lafarge Tarmac said that the plan was flawed and customers would lose out.

Lafarge Tarmac CEO Cyrille Ragoucy said: “We are disappointed that the Competition Commission has asked Lafarge Tarmac to divest another cement plant only a year after it allowed the creation of the JV. This is not reasonable or proportionate and we have not been given a fair opportunity to defend our position.

“The Commission has based its remedies on a partial and historic picture of the market. Its analysis of industry profitability, which is central to its conclusion of Adverse Effect on Competition, is flawed, grossly overestimating the returns made. It has also failed to take into account the new business environment that has been established by our divestments – only 12 months ago – to create a new competitor, and the entry of new importers into the market.

“Regrettably, the biggest loser in this process would be the customer. We are focused on reviewing our options based on today’s CC announcement and making a decision that is in the best interests of our employees, customers and shareholders.”

MPU

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