FTC fines Omya Korea for price fixing

By Baek Byung-yeul

Kim Sang-jo, chairman of Fair Trade Commission

The antitrust agency has imposed a fine of 11.24 billion won ($9.9 million) on three raw material suppliers for paper making over price fixing, the Fair Trade Commission (FTC) said Sunday.

The agency said it levied a 7.72 billion won fine on Omya Korea, 3.05 billion won on Taekyung Industrial and 463 million won on GMC.

The FTC added it decided to report Omya Korea, a subsidiary of the Switzerland-based Omya Group, to prosecutors on suspicions the firm violated the Fair Trade Act.

The three firms are the main suppliers of ground calcium carbonate, a raw material used in paper making that accounts for about 8 percent to 15 percent of the production cost of various types of paper.

The FTC elaborated those three firms agreed to eliminate competition among them and increase the price of the raw material over two-and-a-half years from March 2013 to September 2015, adding that CEOs and executives from the three firms had dozens of meetings at restaurants and golf courses. As a result of their price fixing actions, the three suppliers raised the price of the raw materials between 5 percent and 10 percent three times.

The FTC added the raw material is also used in producing plastics, paint and rubber products but the three firm's price fixing scheme was related only to paper making.

The agency explained its decision was to raise the alarm on distributors, supplying intermediate products, which have been in a blind spot of the fair trade monitoring system.

Korea's ground calcium carbonate market for paper making is estimated at 112.1 billion won as of 2017. The three firms have dominated the market, with Omya Korea having a 51 percent share; Taekyung, 31 percent; and GMC, 18 percent, as of 2017.

Omya Korea operates five plants in Gunsan, North Jeolla Province; Andong, North Gyeongsang Province; Jeongseon in Gangwon Province; Ulsan; and Jecheon in North Chungcheong Province.