East Anglia: Lafarge and Tarmac ordered to address competition concerns

TWO construction material firms with major presences in East Anglia were today told to sell plants and quarries across the UK to allay competition fears.

The Competition Commission said Anglo American, which owns Tarmac, and France’s Lafarge must pave the way for a new competitor into the UK cement market before a proposed merger of their UK operations can go ahead.

To address the competition concerns, they must sell one of the UK’s largest cement plants, Lafarge’s Hope facility in Derbyshire, and more than half the joint venture’s ready-mix concrete capacity.

It is expected that the Hope plant and supporting operations such as a nearby quarry and three linked rail depots will go to a single buyer.

Roger Witcomb, who is leading the merger inquiry for the Competition Commission, said: “A large-scale disposal like this is the only way to get a new entrant of sufficient scale to break into the UK cement market and thereby ensure that this joint venture does not damage competition.”

He said there were only four UK producers of bulk cement and there was evidence that competition has not been as effective as it could be.

The inquiry has also highlighted fears over the impact on the markets for rail ballast and the supply of high purity limestone, which is used in reducing emissions from coal-fired power stations.

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Lafarge and Anglo American said they were confident the conditions proposed by the Commission will be met.

Six aggregate quarries and two asphalt plants are also part of the package of operations due to be sold off under the Commission proposals.

Lafarge entered the UK market in 1987 before acquiring Redland in 1997 and Blue Circle in 2001. It employs 2,800 people in the UK and supplies around 50% of the cement market.

It has a strong presence in Suffolk and Essex, at locations including Barham, near Ipswich, Higham, near Bury St Edmunds, Wivenhoe, near Colchester, Earsham and Flixton, both near Bungay, Chelmsford and Roxwell, near Chelmsford.

Tarmac is the UK’s largest quarrying company and has been involved in some of the UK’s biggest construction projects including Wembley Stadium, Emirates Stadium, the M1 widening, M25 resurfacing and the London Olympics. It employs 4,500 people in the UK and has a portfolio including 118 quarries, 69 asphalt plants and 180 ready-mix concrete sites.

Its locations in Suffolk and Essex include Ipswich, Bury St Edmunds, Stanway, near Colchester, Beccles and Cavenham, near Bury.

The companies have said the combination will create greater value for their customers, given the bigger offer of products and services.