North American paint company, Haley Paint Co. is alleging
that five titanium dioxide (TiO2) producers have
conspired to fix pigment prices in a federal anti-trust class
action in Baltimore, Maryland USA.
The accusations are levelled at
four US companies: DuPont, Huntsman International LLC, Kronos
Worldwide, Inc. and Millennium Inorganic Chemicals; and, Saudi
Arabias National Titanium Dioxide Company Ltd
Millennium Inorganic Chemicals
is now a wholly owned subsidiary of Cristal, although they were
independent companies when the alleged price fixing began.
Since the matter is pending
litigation, all the titanium dioxide pigment producers
questioned stated that it would be inappropriate for them to
comment to IM.
The complaint states the alleged
price-fixing began in 2001 when the market for TiO2
was depressed and prices low. In March 2002, after a meeting of
the Titanium Dioxide Manufacturers Association in
Finland, Haley Paint Co. claims that the defendants then all
announced price increases for all grades worldwide, having
communicated with each other directly and indirectly, and
reached an agreement or understanding on prices in secret.
The plaintiff then alleges that
this understanding or agreement was fostered and maintained
throughout the class period, which led to numerous other price
increases and relatively stable customer positions and market
In addition to fixing prices,
Haley says that the defendants blocked access to new suppliers
entering the market, shared up customers and arranged market
share by refusing to bid or intentionally bidding high
for the business of certain customers being served by other
defendants Ð the parantheses in the complaint filed.
Haley Paint also claims that in
2007-2008, the companies still put forward price increases and
energy surcharges, despite the declining demand for pigment in
the USA in the paint and construction industries.
The class action is seeking
treble damages, alleging fraudulent concealment and anti-trust
Haley Paint Co. is represented
by Shapiro Sher Guinot & Sandler of Baltimore, and Gold
Bennett Cera & Sidener of San Francisco. Gold Bennett Cera
& Sidener is currently involved with other anti-trust class
actions, involving ethylene propylene diene monomer synthetic
rubber and parcel tanker freight rates, amongst others.
Haley Paint Co. is the largest
independent paint dealer in the Philadelphia market, with
manufacturing facilities in Conshoocken, Pennsylvania.
This class action comes as
little surprise particularly considering the litigious US
environment. In the boom times of 2007-2008 TiO2
producers struggled for profitability and the industry has had
a trend of increasing prices since.
Leading pigment producers have
increased their TiO2 prices in unison for some time
as one method to readdresses waning profits, but more often
than not the rises do not stick.
North American customers are
refusing to accept the most recent of prices increases with the
pigment still in the $2,350-2,500/tonne range.
Just going by the filed suit, it
might be very difficult for Haley Paint Co.s attorneys to
prove that the industrys top producers were colluding to
force up prices. One would imagine that hard evidence would
need to be presented to justify such a claim.
On the other hand, unison price
increases in the industry have been regular, obvious and
notably similar in terms of increase and location of the
increase in the world. Generally, they were released either
hours or days apart.
IMs article TiO2 price
bandwagon grows (20 July 2009) carried the subtitle:
Kronos, Tronox, & Huntsman all increase TiO2 prices on
the back of DuPonts mark-up.
While there was no suggestion
that this was pre-discussed industry action, the subtitle
summed up the prevailing trend over the past year at the
As Haley Paint Co. may find it is one thing to accuse, but
an entirely different challenge to prove. What the court filing
has done, however, is put the actions of TiO2
producers in the spotlight once again after a fairly quiet