COLOMBIA: Colombia wrapping up antitrust investigation of cement industry

Colombian regulators expect to issue a final ruling soon on an ongoing antitrust investigation of the local cement industry, which could result in sanctions for the country's top producers.

The head of Colombia's industry and commerce superintendent (SIC), Pablo Felipe Robledo del Castillo, told local daily El Colombiano that by midyear the government agency would announce the findings of an investigation into alleged cartel-like practices in the cement industry and other sectors.

Robledo also said he plans to present a bill on Monday (Mar. 16) that would strengthen the sanctions for anticompetitive practices in Colombia.

"This rule will allow us to increase the sanctions above the nominal amount of 65bn pesos [US$25mn], the current maximum, by adding percentages of a company's revenues or equity, in order to bolster the penalties," he explained.

In 2013, the SIC announced that it was investigating whether executives at Colombian cement companies had colluded to inflate cement prices in country since as early as 2010.

The investigation targeted 14 current and former top directors at five firms, including the biggest three producers: Medellín-based Cementos Argos and the local subsidiaries of Cemex and Holcim.

Argos is the largest player in Colombia's cement industry, with a market share of roughly 46% in cement sales and total revenues of US$1.2bn in 2014. It controls around 60% of the country's production capacity, while Cemex and Holcim together own about a third. The three firms also rank among the largest cement producers in Latin America.

Cement consumption in Colombia grew 10.2% during 2014, to 12mn tonnes, according to data from national statistics institute DANE.

Local demand for cement has risen at an average annual rate of 7.7% since 2010. The construction sector has been a major demand driver, as Colombia embarks on an infrastructure development push in an effort to revitalize its dilapidated transport systems, through initiatives such as the US$25bn 4G highways program.

The country is also betting on infrastructure spending to stimulate its economy, as the commodities supercycle that drove much of its growth over the last decade winds down.