FTC approves cartel for concrete companies

SEOUL, Jan. 21 (Yonhap) -- South Korea's corporate anti-trust regulator on
Thursday agreed to allow small-sized local ready-made concrete companies to form
a limited cartel to engage in joint research and development (R&D) and quality
control.
The measures are aimed at helping the companies cope with the sluggish economy,
which has dented the construction sector, and improve management conditions by
cutting operational costs, the Fair Trade Commission (FTC) said.
It said the cartel will be allowed to operate for two years, with companies
joining forces to manage after sale services and repair or offer compensation for
substandard products.
Ready-made, or unset concrete, is used in most construction projects across the
country.
"Permitting joint quality control and R&D cannot be construed as seriously
limiting fair competition so the fallout should be minimal while there are clear
benefits for struggling companies," an official said.
The decision reached by the corporate watchdog marks the first time in 22 years
that it has sanctioned collaboration by companies.
In 1988, authorities allowed local valve companies to work together to
standardize products.
The FTC, however, has rejected a request by the concrete companies to produce a
common brand of ready-made cement, permit joint purchases of raw materials, and
regulate and control cement trucks. The agency claimed such practices could cause
market distortions that would have an adverse affect on consumers and
construction companies.
The announcement comes in response to requests made by 388 small-sized concrete
firms last September. Large operators and those connected with the country's
conglomerates were not among the companies that made the request, nor were
companies in Seoul, Gyeonggi and Gangwon provinces.
yonngong@yna.co.kr
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