UPDATE 1-UK watchdog clears the way for new cement maker

Tue Oct 8, 2013 6:12am EDT

LONDON Oct 8 (Reuters) - Britain's monopoly regulator said it wants to boost competition in the cement industry by forcing Lafarge Tarmac , one of the major players, to sell a cement plant to a new entrant.

"The best way to disturb the balance of a market where producers have focused on retaining their respective market shares rather than competing is to create the opportunity for a major new entrant," said Competition Commission (CC) Deputy Chairman Martin Cave.

The CC also said on Tuesday that it planned to limit the flow of information between existing producers and would also order the sale of certain facilities used in the production of a cement substitute.

Lafarge Tarmac said it was disappointed with the remedies put forward by the CC.

"The Commission's assumptions and reasoning have serious flaws and the biggest loser in this process will be the customer," a spokeswoman said.

"There is strong evidence to demonstrate there is effective competition in the sector - with new players having recently entered the marketplace. The CC should take these factors on board for its final report."

The regulator's proposals are part of an investigation into Britain's cement industry that found in May that a lack of competition was costing customers hundreds of millions of pounds.

The body said then it could force the dominant players, which include Cemex, HeidelbergCement's Hanson and Hope Construction Materials as well as Lafarge Tarmac, to sell off plants.

Before publishing its final decisions, the CC will wait for responses to its proposals.