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Government moves to crack cement monopoly

July 29, 2014 09:18

Antitrust Commissioner outlines plan to force Nesher to sell its Har Tov plant, which produces around 30 percent Israel's of cement each year.

Isreli currency.

Money cash Shekels currency 521. (photo credit:Reuters)

Several government bodies on Monday took steps to introduce competition into Israel’s cement market, which is dominated by one company: Nesher.

Antitrust Commissioner David Gilo outlined a plan to force Nesher to sell its Har Tov plant, which produces around a million tons of cement each year, about 30 percent of Israel’s annual consumption. If Nesher fails to sell it, he said, it will have to drop the discounts it provides its largest customers.

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Earlier, the Cost of Living cabinet approved the plans to enhance competition in the cement market, which included a condition for Nesher to lower its prices 2%.

Monday’s decision would shorten the timetable for plans to introduce competition, which were not expected to be fully implemented until 2020.

A commission on the cement market in Israel found that breaking the monopoly could save Israel’s economy hundreds of millions of shekels each year, and lower the cost of living.

As a central material in housing, schools and other infrastructure, the repercussions of cement’s price falling would be significant, it argued.
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