A ruling states that the already concentrated Honduran cement market will not be altered by the sale of shares to the Colombian company Argos.
From a press release by the Commission for the Defense and Promotion of Competition (CDPC):
The Commission for the Defense and Promotion of Competition (CDPC) as part of its advocacy of free competition within the framework of its powers and in relation to economic concentrations, was notified about a project of economic concentration in the Cement Industry, involving the economic agents Cementos Argos, S. A de C.V. (buyer) and Lafarge Cementos S.A. Unipersonal (seller).
For a total of $305 million, the company from Colombia has acquired more than half of the assets of the French multinational Lafarge in Honduras.
"We have acquired facilities which have extraordinary efficiency and quality in the target region, but also under economic conditions which are attractive and have high growth potential," said Jorge Mario Velasquez, president of Argos.
With an investment of $200 million, the French-owned cement company has initiated a program of modernization and expansion of its plant.
The program, to be developed over the next three years, aims to eliminate bottlenecks at the plant and increase production capacity by 10%, to support the growth of the market, said Juan Martinez, director general of the cement company. In the medium term capacity is projected to double.
The cement companies Cenosa and y Lafarge-Inhcesa have again increased product prices in a unified manner, defying the rules of the Commission in Defense of Competition (CDPC in Spanish).
Both companies have been making simultaneous increases in the price of concrete for several years, provoking an investigation by the CDPC. This investigation determined the existence of practices that restrict free competition, including price fixing and market sharing.
After several negotiations with the cement industry, the Government authorized an increase of $0.37 (7 lempiras) in the bag of cement.
According to the negotiations between authorities and the company Lafarge-Incehsa, this increase will occur in two phases: $0.16 (3 lempiras) on January 20 and $0.21 (4 lempiras) on January 28.
"With this increase, the price of a 42.5 kilogram bag will increase from $66 to $70", reported Laprensa.hn.
The Government of Honduras announced measures against those who apply a price increase announced by cement company Incehsa.
Benjamín Bográn, Industry and Commerce Minister, said that cement "is an important element in housing and infrastructure, so any increase must be first agreed with the Ministry".
An article in Elheraldo.hn reports that the price of cement now stands at 99.96 lempiras ($5.29) wholesale and 119 lempiras ($6.30) at hardware stores.
Honduran-French consortium Lafarge Incehsa suspended operations in its Cesur ("Cemento del Sur") plant.
The closure is due to problems with the supply of clinker, done by a Salvadoran provider, informed sources close to the company.
Journalist Luis Rodríguez wrote in newspaper El Heraldo: "... Cemento de El Salvador SA (CESSA), gradually suspended clinker supply. Because of this, Lafarge-Incehsa determined the operation was not profitable."
The inauguration of the new facility, capable of outputting an extra 3.300 tons of cement, is expected for February 24th.
Tiempo.hn publishes in its website: "The setup of this innovative facility, finished a coupe of days ago after two years of work, required an investment of 140 million dollars (some 2.800 million lempiras).
50% of the required investment was done by partners of the company, and the remainder was financed by national and foreign institutions."
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