| Cement Market News |
The Vision Corporation
‘Control of prices no answer to monopoly’
23 April 2009,
By Business Reporter
THE Government is working out measures that will allow long-term self regulatory remedy in the
local cement industry to check monopolistic tendencies, Commerce, Trade and Industry
Minister Felix Mutati has said.
Mr Mutati said in an interview in Lusaka yesterday that price controls of the locally produced
cement was not a lasting solution but the issue lay in the disbanding of monopolistic tendencies
which would allow competition in the industry.
The minister said long-term measures being planned by the Government were aimed at
enhancing competition in the industry and stimulate prices and quality aspects of the product.
Mr Mutati was responding to recent concerns by the Zambia Competition Commission (ZCC) and
other industry stakeholders over the recent hike in cement wholesale prices by Lafarge Cement.
“We cannot control the price of cement because it will not end the problem. But what we need
is to find means and ways of disbanding the monopoly by allowing more competition in the
sector,” Mr Mutati said
Mr Mutati said cement imports had always been given leeway and that the product was a bulk
commodity that required long-term logistical systems in place.
ZCC executive director, Thula Kaira said as long as the local monopoly supplier was not
disturbed by any competitive threat, the price of locally produced cement would continue to be
high.
Mr Kaira said it was unfortunate that Lafarge Cement Zambia had continued to be monopolistic
in their sphere of operations.
He said it was important to reiterate that competition law strives to address market processes and
ensure that the best competitive process exists in any given product chain not so much
concerned with the size of a particular company.
Mr Kaira said companies should be allowed to grow as big as they can and also venture into
overseas markets but it is their market behaviour that competition law strives to control.
“The high cost of effective entry into the cement industry coupled with the lack of sustainable
patterns of imports of finished cement into the country will continue to provide Lafarge in
Zambia with undesirable market power to increase prices at any given opportunity,” he said.
Mr Mutati said unfortunately, the law does not give powers to the Commission expressly or
otherwise to disband a monopoly.
However, it is possible to unscramble a merger that was created by the Commission.
“Whether this can be done in practice is a question of prevailing political, economic and social
order and consequences thereto,” Mr Kaira said.
In March, Lafarge Zambia increased its wholesale price of cement from K45, 000 to K51, 600
citing the continued weakening of the Kwacha against the US dollar.
Mr Mutati said in an interview in Lusaka yesterday that price controls of the locally produced
cement was not a lasting solution but the issue lay in the disbanding of monopolistic tendencies
which would allow competition in the industry.
The minister said long-term measures being planned by the Government were aimed at
enhancing competition in the industry and stimulate prices and quality aspects of the product.
Mr Mutati was responding to recent concerns by the Zambia Competition Commission (ZCC) and
other industry stakeholders over the recent hike in cement wholesale prices by Lafarge Cement.
“We cannot control the price of cement because it will not end the problem. But what we need
is to find means and ways of disbanding the monopoly by allowing more competition in the
sector,” Mr Mutati said
Mr Mutati said cement imports had always been given leeway and that the product was a bulk
commodity that required long-term logistical systems in place.
ZCC executive director, Thula Kaira said as long as the local monopoly supplier was not
disturbed by any competitive threat, the price of locally produced cement would continue to be
high.
Mr Kaira said it was unfortunate that Lafarge Cement Zambia had continued to be monopolistic
in their sphere of operations.
He said it was important to reiterate that competition law strives to address market processes and
ensure that the best competitive process exists in any given product chain not so much
concerned with the size of a particular company.
Mr Kaira said companies should be allowed to grow as big as they can and also venture into
overseas markets but it is their market behaviour that competition law strives to control.
“The high cost of effective entry into the cement industry coupled with the lack of sustainable
patterns of imports of finished cement into the country will continue to provide Lafarge in
Zambia with undesirable market power to increase prices at any given opportunity,” he said.
Mr Mutati said unfortunately, the law does not give powers to the Commission expressly or
otherwise to disband a monopoly.
However, it is possible to unscramble a merger that was created by the Commission.
“Whether this can be done in practice is a question of prevailing political, economic and social
order and consequences thereto,” Mr Kaira said.
In March, Lafarge Zambia increased its wholesale price of cement from K45, 000 to K51, 600
citing the continued weakening of the Kwacha against the US dollar.
23 April 2009,
By Business Reporter
THE Government is working out measures that will allow long-term self regulatory remedy in the
local cement industry to check monopolistic tendencies, Commerce, Trade and Industry
Minister Felix Mutati has said.
Mr Mutati said in an interview in Lusaka yesterday that price controls of the locally produced
cement was not a lasting solution but the issue lay in the disbanding of monopolistic tendencies
which would allow competition in the industry.
The minister said long-term measures being planned by the Government were aimed at
enhancing competition in the industry and stimulate prices and quality aspects of the product.
Mr Mutati was responding to recent concerns by the Zambia Competition Commission (ZCC) and
other industry stakeholders over the recent hike in cement wholesale prices by Lafarge Cement.
“We cannot control the price of cement because it will not end the problem. But what we need
is to find means and ways of disbanding the monopoly by allowing more competition in the
sector,” Mr Mutati said
Mr Mutati said cement imports had always been given leeway and that the product was a bulk
commodity that required long-term logistical systems in place.
ZCC executive director, Thula Kaira said as long as the local monopoly supplier was not
disturbed by any competitive threat, the price of locally produced cement would continue to be
high.
Mr Kaira said it was unfortunate that Lafarge Cement Zambia had continued to be monopolistic
in their sphere of operations.
He said it was important to reiterate that competition law strives to address market processes and
ensure that the best competitive process exists in any given product chain not so much
concerned with the size of a particular company.
Mr Kaira said companies should be allowed to grow as big as they can and also venture into
overseas markets but it is their market behaviour that competition law strives to control.
“The high cost of effective entry into the cement industry coupled with the lack of sustainable
patterns of imports of finished cement into the country will continue to provide Lafarge in
Zambia with undesirable market power to increase prices at any given opportunity,” he said.
Mr Mutati said unfortunately, the law does not give powers to the Commission expressly or
otherwise to disband a monopoly.
However, it is possible to unscramble a merger that was created by the Commission.
“Whether this can be done in practice is a question of prevailing political, economic and social
order and consequences thereto,” Mr Kaira said.
In March, Lafarge Zambia increased its wholesale price of cement from K45, 000 to K51, 600
citing the continued weakening of the Kwacha against the US dollar.
Mr Mutati said in an interview in Lusaka yesterday that price controls of the locally produced
cement was not a lasting solution but the issue lay in the disbanding of monopolistic tendencies
which would allow competition in the industry.
The minister said long-term measures being planned by the Government were aimed at
enhancing competition in the industry and stimulate prices and quality aspects of the product.
Mr Mutati was responding to recent concerns by the Zambia Competition Commission (ZCC) and
other industry stakeholders over the recent hike in cement wholesale prices by Lafarge Cement.
“We cannot control the price of cement because it will not end the problem. But what we need
is to find means and ways of disbanding the monopoly by allowing more competition in the
sector,” Mr Mutati said
Mr Mutati said cement imports had always been given leeway and that the product was a bulk
commodity that required long-term logistical systems in place.
ZCC executive director, Thula Kaira said as long as the local monopoly supplier was not
disturbed by any competitive threat, the price of locally produced cement would continue to be
high.
Mr Kaira said it was unfortunate that Lafarge Cement Zambia had continued to be monopolistic
in their sphere of operations.
He said it was important to reiterate that competition law strives to address market processes and
ensure that the best competitive process exists in any given product chain not so much
concerned with the size of a particular company.
Mr Kaira said companies should be allowed to grow as big as they can and also venture into
overseas markets but it is their market behaviour that competition law strives to control.
“The high cost of effective entry into the cement industry coupled with the lack of sustainable
patterns of imports of finished cement into the country will continue to provide Lafarge in
Zambia with undesirable market power to increase prices at any given opportunity,” he said.
Mr Mutati said unfortunately, the law does not give powers to the Commission expressly or
otherwise to disband a monopoly.
However, it is possible to unscramble a merger that was created by the Commission.
“Whether this can be done in practice is a question of prevailing political, economic and social
order and consequences thereto,” Mr Kaira said.
In March, Lafarge Zambia increased its wholesale price of cement from K45, 000 to K51, 600
citing the continued weakening of the Kwacha against the US dollar.
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