EC fines chemical companies €173m for plastics additive cartel

11 November 2009 17:00  [Source: ICIS news]

BRUSSELS (ICIS News)--The European Commission on Wednesday imposed a total fine of €173m ($258m) on 10 leading chemical companies including Akzo, Ciba and Arkema France for their part in a plastics additives cartel.

Ciba, which is now part of BASF, was fined €68.4m; Akzo was ordered to pay €40.6m; Elementis was fined €32.57m; and Elf Aquitaine, which at the time owned Arkema France, was fined €28.6 million; while Baerlocher, Reagens, GEA and Faci were fined smaller amounts.

Chemtura Corp escaped without financial punishment because it revealed the existence of the cartel to the Commission.

The Commission said that between 1987 and 2000 the companies fixed prices, shared customers, allocated markets and exchanged sensitive commercial information for tin and ESBO/esters heat stabilisers that are added to PVC products.

Brussels said it had imposed significant fines on the offending companies because of “the respective affected sales of the companies involved, the very serious nature of the infringement and the fact that the cartel covered the whole EEA [European Economic Area]”.

EU Competition Commissioner Neelie Kroes said “these companies must learn the hard way that breaking the law does not pay and that repeat offenders will face stiffer penalties”.

Arkema France had its fine increased by 90% because it had been a participant in three previous cartels, said Brussels. Its overall  fine was then reduced slightly, as was the amount imposed on Baerlocher and Ciba, for sharing information with officials.

An analyst note from JP Morgan Cazenove said that the decision was likely to bring relief to the markets as the cartel activity was widely known.

“The issue has been well known, openly discussed by companies (some of whom, such as Elementis, have long exited the relevant businesses in 1998 through disposals) and, in some cases, provisioned for,” the note said.

“With balance sheets much stronger than in previous cycles, these fines should be absorbed through normal cash flow,” it said.

($1 = €0.67)

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By: Philippa Jones
+44 20 8652 3214

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