2. China’s Cement Company Fined $1.6 Million by Indonesia’s Business Watchdog
Indonesia’s Business Competition Supervisory Commission (KPPU) has made PT Conch South Kalimantan Cement (CONCH) pay 22.35 billion rupiahs ($1.6 million) in fines for carrying out a steep price cut strategy, causing market monopoly.
“The firm was proven to have violated Article 20 of Law No. 5/1999,” Chairman of the Commission Council, Ukay Karyadi, told State News Antara as quoted on Sunday, January 17.
In 2015, CONCH in South Kalimantan sold its Portland Composite Cement (PCC) at 58,000 rupiahs ($4.12) per 50-kilogram bag.
Meanwhile, Indonesia’s biggest cement maker Semen Gresik sold its product from $4.26 to $4.62 per 50-kilogram bag.
In the following years, other brands from outside Kalimantan are slowly out of the market.
“The price difference may look small, but for a consumer who buys in large quantities, it’s quite good,” said Budi, an owner of a building materials shop in Balikpapan.
Small buyers will choose the lowest price cement, too.
The low selling price, however, was set below its production cost per bag. It was revealed that CONCH kept sold the PCC cement in South Kalimantan at lower prices from 2015-2019, even though they lost money.
The Commission Council found that in its 2015 financial statements that CONCH suffered a loss as a result of this practice.