Bulgaria’s antitrust watchdog banned an agreement between German cement maker Kloesters Baustoffwerke and domestic steel mill Kremikovtzi on July 27.

The accord is for the supply of slag for cement production. The Commission for Protection of Competition (CPC) decision was issued in order to avoid a monopoly of Kloesters.

Kremikovtzi and Kloesters set up in 2004 a 25/75 joint venture, called Cemeko, for a 25 million euro cement plant near Bulgaria’s capital Sofia.

“A thorough analysis of the market has shown that if the contracted supplies to Cemeko are implemented, this will limit completely or to a very high extent the access of all other users of that raw material,” the CPC said in a statement.

Metallurgical slag, of which Kremikovtzi is the sole supplier in Bulgaria, can not be replaced with another ingredient, nor can the amounts in the cement types that domestic plants produce be reduced.

Slag cement is made by grinding slag and clinker.

“As result of the impossibility of buying it from the sole local supplier, they will be forced to halt production of slag cement. For Zlatna Panega, Holcim and Plevenski Cement this product forms a basic part of their production and sales. In that sense, they will be excluded from the market, while Devnya Cement will lose a significant part of its clients,” the CPC said.

Global cement producer Holcim holds majority stakes in Holcim Beli Izvor and Plevenski Cement plants, Greek Titan owns Zlatna Panega and Italian Italcementi holds control of Devnya Cement.

The Kremikovtzi/Kloesters cement plant, which was expected to become operational in early 2006, is planned to have an annual output capacity of 400 000 tons of cement.
Kloesters Baustoffwerke GmbH & Co is based in Teltow, near Berlin, and operates several plants that make ready-mix concrete for road and bridge construction.

Earlier in July, Bulgaria’s largest steel mill Kremikovtzi, majority owned by Indian Ispat Industries, said it raised its net loss for last year to 201.6 million leva from a preliminary estimate of 154 million leva loss reported in June.

Kremikovtzi had a net profit of 80.8 million leva for 2004.

Kremikovtzi plans to invest $78 million this year to raise the quality of its products, double finished steel production to two million tons and raise raw steel output to about 2.5 million tons in 2007.

In 2005, Kremikovtzi produced 1.39 million tons of steel, 1.08 million tons of iron and 1.09 million tons of rolled products. The plant exports around 95 per cent of its steel output.

Ispat Industries acquired through its unit Global Steel Holding Limited (GSHL) the owner of 71 per cent of Kremikovtzi, Finmetals Holding, for an undisclosed price in August 2005. The Indian company has pledged to invest up to $350 million in the revival of the communist-era steel mill over the next five years, including upgrades of technology, automation and environment protection.