The Nesher cement monopoly has granted certain preferred customers special deals, which could make the import of cement unprofitable and prevent competition in the cement sector.
Antitrust Commissioner David Gilo and his staff are conducting an examination of Nesher, an officially recognized monopoly, and the Israeli cement industry. On Wednesday, Gilo informed the firm he is considering exercising his authority and order Nesher to stop offering preferential terms to only some of its customers. In addition, Gilo may force Nesher to publish its prices for cement and delivery terms, for all customers.
Nesher informed the Tel Aviv Stock Exchange of Gilo's statements on Thursday; shares of Clal Industries, Nesher's controlling owner, fell 2.2%. Clal Industries has reached an agreement to sell most of its holdings in Mashav, the subsidiary that controls Nesher, to the Livnat family for NIS 1.32 billion. The Livnats are partners with Nochi Dankner in the controlling interest of the IDB group, which controls Clal Industries. Clal and the Livnats reached an agreement on the sale of a 55% share of Mashav late last week, pending the approval of the antitrust commissioner. Mashav and the Livnats are also 50:50 partners in Taavura, which has a monopoly on cement transport.
If Gilo makes serious changes in how Nesher does business, it could seriously hurt the company's profits. Nesher sells 40% of its production to two customers, the huge cement suppliers Ready Mix and Hanson. If Nesher is forced to cancel or reduce its discounts to these customers, they could turn to imports.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now