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Decision means cement works could be sold off

By Leek Post and Times  |  Posted: January 22, 2014

By Leslie Jackson

The Cauldon works, which could be sold off under a ruling by the Competition Commission.

The Cauldon works, which could be sold off under a ruling by the Competition Commission.

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A FINAL report has been issued by the Competition Commission which states that Lafarge Tarmac has to decide to sell either its Cauldon works or its sister Tunstead Cement Plant in Buxton.

The commission said the decision will open the way for a fifth cement producer in Great Britain, to increase competition in the market.

The Cauldon works employs around 150 people from across the district.

The move by the Competition Commission comes after Lafarge and Tarmac merged at the beginning of last year, with the body stating that steps should be taken to boost competition in the UK's cement sector.

Allan Ruxton, Lafarge Tarmac's Cauldon cement plant manager, said: "We think the Competition Commission has got it wrong.

"Cauldon is a great plant, with a skilled and dedicated workforce.

"We will continue to focus on safety, customers, the community and running the plant efficiently, and believe this is the best way to safeguard our future. It is too early speculate on any potential divestment decision – we have just seen the final report and are reviewing the detail and considering our future options."

A spokesman for Lafarge said: "Should Cauldon be divested it will be done so as a going concern.

"The Competition Commission wants to find a buyer which will form a new competitor in the market, which will continue to operate the site.

"As such, in the event of the plant being sold, there is likely to be minimal impact on jobs."

Additionally, the commission is looking to increase competition in the supply chain for ground granulated blast furnace slag – GGBS, a partial substitute for and input into cement – by requiring Hanson to sell one of its GGBS production facilities.

Professor Martin Cave, the Competition Commission's deputy chairman and also chairman of the inquiry group, said: "We believe that the entry of a new, independent cement producer is the only way to disturb the established structure and behaviour in this market which has persisted for a number of years and led to higher prices for customers.

"Despite falling demand and increasing costs during the last few years, profitability among GB producers has been sustained and their respective markets shares have changed little. This is not what you would expect to see in a well-functioning market, under these circumstances.

"The problem in relation to GGBS stems from there being only one domestic producer – Hanson – which again leads to higher prices for customers.

"Cement is an essential product for the construction and building sectors and the amount of such work that is funded by the public purse only underlines the importance of ensuring that customers get better value for money.

"We believe our measures can bring about a substantial, swift and lasting increase in competition in this economically vital market."

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