Sources inform “Globes” that Nesher Israel Cement Enterprises signed agreements with foreign companies that oblige them to refrain from selling cement and cement products in Israel and in the Palestinian Authority (PA). In so doing, Nesher succeeded in maintaining its monopoly status in the Israeli cement market. The agreements may be in breach of the Restrictive Trade Practices Law.
The agreement in question was signed on February 14, 1996. At the beginning of 1998, prices in the agreement were updated, the agreement itself extended until December 31, 2002, and an option was given to extend the agreement by another five years until December 2007.
Thanks to that and similar other agreements, Nesher has succeeded in maintaining particularly high profitability and preventing other players from entering the cement market. Nesher has for many years been a significant profit center for the IDB group, Nesher’s controlling shareholder.
The agreement was signed with Adana Cement Trade and Industry, a large Turkish cement manufacturer, and another with a Spanish company that trades in cement and clinker (one of the raw materials from which cement is produced). The company in question has many joint operations with Nesher.
Under the agreement, Nesher bought from the Turkish company clinker at a price 50% higher than the market price. The Turkish company pledged not to supply clinker and cement to any company in Israel (except Nesher), in the territories and in the PA (where Nesher is also a monopoly).
In the past few years, Nesher stopped buying clinker from the Turkish company, and Adana sought release from the agreement, but Nesher refused. Adana representatives came to Israel several times to negotiate with Nesher executives, including Nesher general manager Yitzhak Davidi, but were told that Nesher would sue Adana if it sold cement or clinker in Israel.
Published by Israel's Business Arena on 4 February, 2002