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Russia's FAS authority exposes PVC cartel

By: Richard Higgs

January 8, 2013

MOSCOW (Jan. 8, 10:25 a.m. ET) — Russia’s Federal Antimonopoly Service (FAS) has ruled that seven Russian PVC producers and suppliers violated competition law by concluding a cartel agreement to share out PVC production and sales in the national market.

In a statement, the head of FAS’s anti-cartel section Alexander Kinyov said that, in view of the income gained by the cartel members, the case will be passed to Russia’s Interior Ministry for criminal prosecution.

The companies involved are PVC producers Sayanskhimplast based in Sayansk, Irkutsk region; Kaustik (Sterlitamak) of the semi-autonomous Bashkortostan Republic and its Moscow-based parent group Bashkhim; Siberian Chemical Co.; Kaustik (Volgograd) and its Moscow-based parent Nikochem group and supplier United Trading Co. (JSC ETK).

FAS, which began its investigation last year, found that the firms set up the anticompetitive cartel back in 2005. They agreed to divide up the Russian suspension PVC market by categories of buyers, exchanging information and documents on the scope of production, sales and their customer databases.

The Russian antitrust authority has also been conducting investigations into suspected cartel agreements in the country’s soft cable compounds, caustic soda, chlorine and chlorinated paraffin wax markets.