CAIRO: A brief chapter in the trial of 20 Egyptian cement company executives charged with price-fixing and stifling competition concluded Monday, when a short introductory session took place, according to court officials.
Ismail Abdel Rehim, a spokesperson for the Egyptian Competition Authority, said the court presented defendants with a report issued by the Antitrust and Competition Protection Commission (ACPC) and granted them several weeks to review it. The next session is scheduled for April 14.
Because of internal policies regarding ongoing cases, Abdel Rehim said he could not comment on the substance of the trial and hesitated to make any firm guess as to when it will likely conclude.
“You know the Egyptian courts, he said.
The outcome of the trial, which implicates 13 of Egypt’s major cement companies, will in many ways be a benchmark of the efficacy of recent antitrust measures in Egypt. It is the first case to directly involve the 2005 Customer Protection and Anti-Monopoly Law.
Charges of anti-competitive activity were spurred by a report issued by the three-year-old ACPC in January. The report alleged that the cement firms had conspired to jack up prices and limit marketing of Portland Cement – the world’s most widely-used type.
The commission’s investigation took an unusually brief 14 months, rendered more urgent by swiftly rising cement prices. The cost of a metric ton of cement has grown by as much as 30 percent over the last two years, at LE 300 in 2006, LE 345 in 2007 and LE 400 this year.
Companies involved in the suit include Misr Beni Suef, Al-Ameriyah Cement, Torah Cement, Misr Qena and Suez Cement.
Ismail Sadek, an economic analyst at Beltone Financial, said the case will likely have few practical implications for the finances of these companies, as even the largest potential fine (LE 10 million) comprises a sliver of the involved companies’ revenues.
The case represents just one in a series of travails for the cement industry of the past year, he said. In 2007, the government imposed both price caps and export duties. “This is part of a whole package of negative events, he said.
Suez Cement’s stock was trading at LE 59 per share by late afternoon Wednesday, down nearly LE 20 from its 52-week high of LE 78. Misr Beni Suef was trading around LE 119 per share, also down significantly from its 52-week high of LE 154.
An antitrust conviction could prove a significant moral victory. The Egyptian government has been criticized for failing to curb anti-competitive corruption as it has struggled to shake off the remnants of colonial and command economies. The ACPC, designed to curtail collusion and monopoly, was formed partially in response.