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House talks on cement deal

22/03/2007 14:00
The government and the opposition expressed their concerns on Thursday on the possible cooperation between The Cyprus Cement Company and Vasiliko Cement Works. In their statements at the House of Representatives, AKEL MP, Stavros Evagorou and DISY MP, Averof Neophytou talked about the possible cartels that might increase the construction cost due to the monopoly.

Mr. Evagorou noted that at the current stage the two companies agree on the prices and prices are the same. “If the two companies become one, the problem will expand. We urge the Commission for the Protection of Competition to take a decision the soonest possible”, he stated.

DISY MP, Averof Neophytou stressed the importance of the cement sales in the construction sector, which affects the island’s economy. “In the past few years, constructions affect the growth of the Cyprus economy. The Ports’ Authority of Cyprus has not the infrastructure to import cement and only the domestic production is available on the island. We don’t accept that there is competition at the current stage, despite the fact that the companies are two. And we wonder why didn’t the state intervene so far”, he said.


The agreement provides for the issue of 18.2 million shares from VCW to CCCT in order to undertake the latter’s production and distribution activities and to acquire its investments. If the deal is approved by the EGM and the supervisory authorities, Vasiliko will undertake the operations of CCCT cements in Moni, which is expected to close in 4 or 5 years. Its activities will be gradually transferred to the new production line that will be launched in Vasiliko.

The new unit will be able to produce up to 2.4 million tons a year against 1.7 million that the current production ability is.

It is noted that the main argument of the two companies in order to convince the Commission for the Protection of Competition on the advantages of the deal is that the new line will reduce the CO emissions by 40%.

CCCT also has a license for the import of cement, which will be transferred to Vasiliko. CCCT will transfer its investments to Athinodorou Ready-made Concrete and Latouros Quarries, which are calculated at £16 million.

Following the transfer of its activities and investments, CCCT will focus on the development of the 960 donums of seaside land, which host the production industry of Moni.

Vasiliko currently controls 75% of the cement market and CCCT 25%.