(Dublin, ireland) — CRH believes it can overturn a €25 million fine recently imposed by Poland’s competition watchdog but board members said yesterday that it was still a matter of “serious concern” to the group.
The Polish authorities imposed the fine late last year on CRH’s local subsidiary, Grupa Ozarw, following a price-fixing investigation into the country’s cement industry, in which the Irish group is a significant player.
CRH subsequently lodged an appeal against the finding, and its chairman, Kieran McGowan, told shareholders at the group’s annual general meeting (agm) in Dublin yesterday that it was confident this would succeed.
Mr McGowan explained that a study of the Polish industry undertaken by a number of economists at the Irish group’s request found that Ozarw’s prices were based on market conditions. He added that the authorities had not originally taken this into account.
“This is a matter of serious concern to us,” Mr McGowan added, “but we are confident that the appeal will succeed.” He also stressed that CRH believes that Ozarw operated an independent commercial policy in Poland.
Chief executive Myles Lee reiterated this after the meeting. He also rejected a suggestion by shareholder Séamus Maye that if the appeal fails, the Irish group could face liabilities tied to 11 years of turnover in Poland.
Mr Lee said that the practice up to this had been that competition law fines were linked to one year’s turnover.
Shareholders voiced concerns about the fine several times at the agm. The sanction resulted from an investigation by Poland’s Office of Consumer Protection (OCCP), which led to a record total of €100 million in fines imposed on a number of players for price-fixing and market-sharing.
Two of CRH’s peers, Lafarge and Heidelberg, qualified for leniency in the investigation as they supplied the OCCP with documents and other information.
In a statement issued at the meeting, CRH said it now expects earnings in the more important second half of the year to be ahead of the €1.15 billion that they reached in 2009.
The second half of the year is more important to the group as building activity in its main markets, the US and Europe, picks up.
The group pointed out that the harsh winter on both sides of the Atlantic meant sales volumes were down in key markets in the opening months of the year.
“Overall, our European operations have seen like-for-like sales decline of 23 per cent for January/February moderate to a cumulative decline of approximately 14 per cent for the first four months of the year ,” its statement noted. Similarly, its operations in the Americas were down 25 per cent in January and February. But the rate at which they fell slowed to 14 per cent for the period up to the end of April.
Demonstrators target AGM: CRH should ‘divest itself’ of Israeli company
Protesters yesterday called on Irish building materials giant CRH to dispose of its interest in an Israeli company which they claim is party to human rights abuses.
CRH owns 25 per cent of Mashav Group, which in turn owns 95 per cent of Nesher, Israel’s sole cement producer and the country’s biggest supplier of the material.
Protesters outside the group’s annual general meeting and speakers at the gathering demanded that the group “divest itself” of its stake in Mashav.
Some argued that Nesher is almost certainly supplying cement that is being used to build a wall that forms part of a 700km barrier along Israels West Bank, which the government says is necessary to protect citizens, and settlers in illegal settlements on Palestinian territory.
Chairman Kieran McGowan and chief executive Myles Lee pointed out that the company sells cement to both Israelis and Palestinians and did not discriminate between either.