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Cement factory could face sale

By MIG: Leek Post and Times  |  Posted: October 23, 2013

The Lafarge Cement Cauldon Works which could be offered for sale

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A MAJOR Staffordshire Moorlands employer faces an uncertain future after the Competition Commission proposed it could be offered for sale.

Lafarge Cement, which employs around 150 people from across the district at its Cauldon works, is one of two sites that the commission has stated should be disposed of.

The move comes after Lafarge and Tarmac merged at the beginning of the year, with the commission feeling that steps should be taken to further enhance competition in the cement sector.

The news also comes as a blow to the wider Moorlands economy – the company also prides itself on working with groups and organisations across the district including schools and community first responder teams.

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It is estimated that it contributes around £11 million a year to the local economy through wages, rates, buying in local supplies and using sub-contractors.

Allan Ruxton, works manager at Lafarge's Cauldon site, claimed the commission's proposed remedies were based on "misinformed assumptions and flawed reasoning".

He said: "Indeed, there is strong evidence to demonstrate that there is very effective competition in the sector, including the recent entry into the market of new players.

"The Commission is required to publish its final report by January 17, 2014, and we will do our best to ensure that these important factors are taken on board.

"My priority now is to ensure that my team receives all the support they need from the company during this time of uncertainty.

"Cauldon is a great plant, with a dedicated workforce and I will ensure they continue to work to the highest standards of safety, environmental performance and customer service as I believe this is the best way to safeguard our future."

The commission's list of provisional remedies, propose that Lafarge Tarmac should divest itself of either the Cauldon cement plant or the Tunstead plant near Buxton, in a bid to introduce a new player into the market.

However, district and parish councillor for the area, Edwin Wain, said: "Lafarge has invested millions into the Cauldon works. This seems very unfair and creates uncertainty for the works and its employees.

"The company puts a tremendous amount of money into community groups all across the Staffordshire Moorlands each year. The factory is probably one of the top works in the UK."

Professor Martin Cave, the Competition Commission's deputy chairman and chairman of the Inquiry Group, said: "Both the scale of the problems we found in the GB cement markets and the way that they stemmed from established structure and conduct meant that extensive measures were likely to be necessary to address them.

"The best way to disturb the balance of a market where producers have focused on retaining their respective market shares rather than competing is to create the opportunity for a major new entrant.

"Being able to buy a cement plant – and a number of accompanying ready mix concrete (RMX) plants if necessary – will give the new producer a foothold in the GB cement markets and will increase the number of GB cement producers, thereby disrupting the established patterns in these markets.

"We think that these measures will go a long way towards establishing a more competitive market for customers."

The remedies by the commission state that the purchaser of the divested cement plant should be able to acquire a limited number of RMX plants from Lafarge Tarmac, subject to the purchasers being capped at 15 per cent of the acquired cement production capacity.

The buyer would have to be approved by the Compettion Commission and not be one of the GB’s existing cement producers. 

The Cauldon works was build in the 1950s and was opened in 1957. Lafarge took over the former Blue Circle plant in 2001.

Millions of pounds of Investment has been continually poured into the works to make it one of the UK's modern cement production unit.

The factory has also used tyre chips and process sewage pellets to power the premises which has seen a large cut in fossil fuels.

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