- Transfield Pty Ltd (Galvanising), Transfield Pty Ltd
SummaryConcerns raised by competitors and customers of Transfield regarding alleged acquisition by Industrial Galvanizers Corporation of Transfield's Galvanising division.
Market definitionGalvanizing services in the Brisbane region.
Competition analysisOn 10 January 2002 the Commission announced that it would oppose Industrial Galvanizers Corporation's acquisition of Transfield Pty Limited's galvanizing business located at Richlands in Brisbane.
IGC and Transfield are the two largest providers of galvanizing services in Australia. Transfield wanted to sell its three galvanizing plants located at Seven Hills in Sydney, Richlands, Brisbane and Townsville. The Commission informed the parties that it did not object to the sale of either the Seven Hills or Townsville plants to IGC.
However, in relation to the Richlands plant, the Commission believed that the acquisition by IGC would lead to a substantial lessening of competition in the provision of galvanizing services in the Brisbane region.
The Commission conducted extensive inquiries and found widespread concern among market participants in relation to the merged entity's position in Brisbane.
The Commission found that the market is predominantly regional with customers rarely shipping goods large distances to be treated.
The proposed acquisition would result in IGC having a market share in excess of 80 per cent of the market for galvanizing services in the Brisbane region.
Transfield is the only competitor that is capable of matching IGC's capacity to galvanize longer steel lengths. The only remaining competitor in Brisbane, Sunstate Coatings, is constrained in its ability to compete with IGC on longer steel lengths due to the small size of its galvanizing bath.
In the event of IGC acquiring the Richlands facility, the Commission believes that there would be little effective competitive constraint on the conduct of the merged entity.
The Commission found that there are significant regulatory barriers (in particular environmental approval) to establish a suitably large galvanizing plant to compete with IGC in the galvanizing of longer steel lengths.
The Commission also notes that IGC produces lighting columns/poles and safety noise barriers in competition with some of its galvanizing customers. The Commission is concerned that IGC could use a dominant position in the galvanizing market to leverage influence into other markets into which galvanizing services are required.
Imports above 10%