A N$1,5 billion deal between West China Cement Limited and Ohorongo Cement Pty Ltd, Namibia’s biggest cement plant owner, has been blocked by Namibia’s Competition Commission.
“The commission is convinced that if allowed, this could lead to less competition in the cement industry and enable possible collusion and price fixing, which would be to the detriment of consumers,” The Namibian reported. The commission was further concerned that “no concrete benefit would outweigh the detrimental effects that will result from the implementation of the proposed merger.” Apparently it will lead to coordination between Ohorongo Cement (Pty) Ltd and Whale Rock Cement, even though West China denied any links between them and Whale Rock Cement. Whale Rock cement is Namibia’s biggest cement factory, built at 350 million U.S. dollars, and it is Chinese-invested.
West China Cement Limited was set to buy 100% of Schwenk Namibia Pty Ltd’s shares. Schwenk Namibia Pty Ltd manages and owns 69,8% of Ohorongo Cement Pty Ltd, with Industrial Development Corporation of South Africa (14%), the Development Bank of Namibia (11%) and the Development Bank of Southern Africa (4%).
According to the mayor of Otavi, the deal was in bad faith because it directly contradicted Schwenk Zement’s promise to sell Ohorongo’s shares to Namibians. But Schwenk Zement said it was happy to break the promise of selling off the cement plant to an international investor because no Namibian firm was interested in the plant.There have been reports of how local textile industries in some African countries like Congo collapsed due to Chinese investments.
