Brazil gives cement firms 30 days to pay combined $934 mln fines
By Leonardo Goy
BRASILIA, July 29 (Reuters) - Brazil's antitrust watchdog, Cade, has ordered six cement makers named in a price-rigging case to pay a combined 3.1 billion reais ($934 million) in fines within a month in a landmark decision that also orders asset disposals.
Under the terms of the decision announced on Wednesday, the watchdog gave the companies a one-year deadline to reduce their installed capacity in the cement and concrete industries through asset sales. The decision was published in the government's official gazette.
According to Cade, which first issued a ruling in the case in May of last year, Votorantim Cimentos SA, Camargo Correa SA's Intercement Brasil unit, Itabira Agro Industrial SA and Cia de Cimentos Itambé SA, as well as Switzerland's Holcim Ltd and Cimpor Cimentos de Portugal SGPS SA colluded on pricing to force rivals out of the market.
The ruling, which followed an eight-year inquiry, follows cost overruns that dogged Brazil's preparations for last year's soccer World Cup as well as dozens of road, port and infrastructure projects across Latin America's largest country. The firms named in the case control about three-quarters of the domestic market for cement and concrete.
A series of studies by Cade showed evidence that several takeovers and asset swaps among cement companies during the 1990s and the 2000s were made to prevent rivals from entering the lucrative market.
The largest players in Brazil's cement industry tend to have strong market control in specific regions, increasing the potential for collusion. The number of cement producers in Brazil shrank to about 10 in 2011 from almost two dozen in the early 1990s.
Under terms of the ruling, Votorantim must pay 1.5 billion reais in fines and Cimpor 297 million reais. Cade fined Intercement Brasil 241 million reais, Itabira 411 million reais, and Holcim 508 million reais. Itambé must pay 88 million reais.
Some of the companies are challenging Cade's ruling in the courts. The companies could not immediately be reached for comment on the penalties announced Wednesday. Continuación...