Nairobi — A total of nine steel companies have been fined Sh338.9 million by the Competition Authority of Kenya (CAK) for illegally increasing the cost of steel products.
They include Corrugated Steel Ltd (Sh86.97 million), Tononoka Rolling Mills Ltd (Sh62.72 million), Devki Steel Mills Ltd (Sh46.3 million), and Doshi and Hardware Ltd (Sh41.6 million).
Others are Jumbo Steels Mill Ltd (Sh33.14 million), Accurate Steel Mills Ltd (Sh26.83 million), Nail and Steel Products Ltd (Sh22.82 million), Brollo Kenya Ltd (Sh9.4 million), and Blue Nile Wire Products Ltd (Sh9.16 million).
CAK argues that the above-mentioned companies engaged in cartel conduct whose effect was to increase the cost of homes and infrastructure by raising steel product prices.
As a result, the costs of bars, pipes, beams, and sheets, which account for over 20 percent of the construction cost, went up.
CAK acting Director General Adano Wario said the penalties are proportionate to the offence, specifically for consumers who have been complaining of the high cost of steel products in the country.
Wario stressed that the penalties are meant to restore competition in the sector and deter companies from deploying anti-competitive practises as a business strategy.
"Cartels are conceived, executed, and enforced by businesses to serve their commercial interests, and to the economic harm of consumers," Wario said.
"In this matter, the steel firms illegally colluded on prices and margins as well as output strategies," he added.
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CAK says that it first investigated the matter in August 2020 and conducted a nationwide covert field screening whose result pointed out a coordinated effort by manufacturers on pricing and output restrictions.
After investigations, the Authority found that steel firms resolved to restrict importation of 0.9mm coils and plates, coordinate the release of pricelist through ex-factory prices, monitor competitors stock levels, and monitor sales volume, among others.
"The steel sector intervention is a progression of the authority's efforts yo facilitate, among others, affordable housing to Kenyans."
In the Competition Act, CAK is mandated to slap a financial penalty of up to 10 percent of a company's gross annual turnover for the year preceding the authority's decision.
Its severity is dependent on a number of factors, such as the duration and scale of the violation, the harm to consumers, et cetera.
