Thursday 26 May 2022

Holcim buys 51% stake in Costa Rican ready-mix concrete producer

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26 May 2022 - At The Banks - BCCR

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HQ – Holcim Costa Rica has announced the purchase of 51% of ready-mix concrete producer Concretera Nacional, making it one of the largest building material and construction companies in the country.

The transaction was delayed due to concerns that it would create an unfair monopoly in Costa Rica’s construction sector, the country’s antitrust regulator (Coprocom) stated. The two companies operate in different parts of the same production chain.

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Holcim works in cement while Concretera Nacional primarily produces ready-mix concrete. They together are as efficient as Because cement is a primary ingredient in ready-mix, there is a risk that Holcim could raise its prices when selling to Concretera Nacional’s competitors, according to the regulator.

The relationship was especially concerning given that Holcim’s market share in manufacturing and sales of cement in Costa Rica is over 50%.

Holcim Costa Rica is a subsidiary of Swiss cement firm Holcim, which sells cement (Holcim Costa Rica), ready-mix concrete (Holcim Concretos) and aggregates (Holcim Agregados) worldwide and across Latin America. Its Costa Rican plant and main distribution center is located in Agua Caliente de Cartago, with additional distribution centers in Pérez Zeledón, San Carlos and Belén, Guápiles.

Concretera Nacional, founded in 2004, has three plants in the greater San José area, including in Pavas, Alajuela Plant and Cinco Esquinas.

After market evaluations, Coprocom ultimately voted to approve the acquisition, but with a list of stipulations intended to prevent monopolistic activity.

Holcim has to demonstrate that it is not providing discounts or discriminatory service to other companies in the cement and ready-mix sectors. It must also deliver regular reports so the regulator can analyze the market impacts.

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Coprocom’s vote was held on July 15 but was not announced until this week.

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