Suspicious demand by tycoon attracts the attention of Competition Authority

Mr Narendra Raval is not only one of the wealthiest men in the country, but also one of the most powerful, and head of the major conglomerate, Devki Group. He’s known to be eccentric, and regularly jumps on a boda boda. However, this time he went too far, and the government’s regulatory body is now on him. This was after Raval asked the government something that no other businessman ever would. He deals in cement, and so requested the government to tax him and other cement dealers more. He proposed the government does this by almost tripling the import duty for clinker, which is a raw material for cement. This unbelievable request led the regulatory body to initiate immediate investigations, and now they’ve finally figured out what’s going on.

The Competition Authority of Kenya (CAK) warned the government against implementing the proposal by the billionaire industrialist to raise the import duty on clinker from 10 percent to 25 percent.

Mr Raval whose Devki Group owns four cement firms has been lobbying the government to raise the taxes, arguing that the country now has enough capacity to meet its clinker needs.
But the competition watchdog says the proposal is a self-serving move on the part of Devki which has a near-monopoly on the means of manufacturing clinker, adding that it risks shutting down rival plants and raising cement prices.

In an advisory opinion to State House, the Treasury and other government departments, the regulator noted that imported clinker is cheaper and that the window to import or produce it locally should be maintained to ensure healthy competition.

The State has been considering increasing the import duty, drawing protests from Raval’s rivals — Bamburi Cement, Savannah and Rai. The watchdog says expensive imported clinker will make it easier for Raval to control cement prices through influencing rivals’ production costs, killing them by controlling supply of the critical raw material.

“Increasing the current import duties will therefore distort the market, entrench National Cement’s position as a cement manufacturer and a clinker supplier and placing it at a position to foreclosing competitors and barring entry into the market,” the CAK wrote in the letter.

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