The impending publication of a 300-page report by Mexican competition authorities is expected to shed new light on the saga of a 26,219t shipment of cement aboard the Mary Nour, refused entry into the Mexican cement market back in July 2004. The Mexican Federal Commission of Competencia (CFC) report is expected to be rather critical of Cemex and some specific government administrators over their role in this import shipment of cement, which after lengthy delays and apparently some unwarranted threats, was eventually refused permission to unload its cargo in the port of Tampico, Mexico.
The saga began with the decision of three local entrepreneurs, Ricardo Alessio, Luis Bonales and Ricardo Camacho, who had worked at Cemex between 1993-2002, to form a new import company CDM, in order to import low cost cement and to sell it domestically in Mexico – in effect buying overseas at low cost and selling it in Mexico in line with local high prices. Their difficulties in sourcing the requisite overseas cement is well documented elsewhere, but eventually they obtained some 26,000t of bulk cement from Novorossisk in Russia and sailed for Mexico.
Given some apparent prominence in the report is a letter sent by Rafael Meseguer, a then senior director at the port of Tampico to his superiors in the National Ports Authority expressing concern over “threats” made by Jorge Tello Peon, a Cemex manager, over the cancellation of future investments in the port – although at recent CFC hearings Tello Peon denied that this letter (now missing from the archives) related to the imminent arrival of the Mary Nour. In any case, Jorge Tello Peon acted in a personal capacity, claimed Arthur Ulloa Heron, a Legal Director for Cemex Mexico.
The Commission also puts forward the view that indicates monopolistic influences were at work. For example, it notes that Cemex had effective control of the influential National Cement Association (Canacem) and could influence the national registry of cement importers and thus disallow the CDM operation. CDM however circumvented this action by acquiring an existing import operation for US$90,000 complete with all the necessary licenses.
The formal investigation also notes that the United Union of Alijadores (GUA), the authorised stevedoring group of workers in Tampico port, raised its original quote offered to CDM in February 2004 of just 5 pesos per ton of cement to US$9 in July, when the boat was on the verge of arriving at the port. The commission, however, clears Cemex on any influence on this matter and indeed, potential claims of any payments to the stevedoring union. Meanwhile, CDM, meanwhile, apparently maintains in submissions to the CFC that the union leaders told them to stop their intentions to unload in Tampico in order to avoid the possibility of finding themselves three meters underground!
Cemex argues strongly that it did not do anything illegal to prevent the entrance of the Mary Nour and the over coming weeks it will present their arguments to the Commission. Should they fail to convince, then they then face only minor fines under present rules – up to 12 million Pesos. But as Ricardo Alessio of CDM reportedly told local press recently: “it’s not the level of fine but the chance for companies like ours to play on a level playing field against companies such as Cemex.”
Meanwhile, Lorenzo Zambrano the Cemex CEO, has reportedly expressed some criticism against the President of the Commission, Eduardo Perez Motta, for revealing the content of the on-going investigation to third parties, suggesting that he has not been too professional in his approach to this 28 month investigation.
We watch and wait for the final verdict.