2004/254/EC: Commission Decision of 24 January 2001 declaring a concentration to be compatible with the common market and the EEA Agreement (Case No COMP/M.2033 — Metso/Svedala) (notified under document number C(2001) 157) (Text with EEA relevance)
Date: 2001-01-24
Institutions: European Commission
Subjects: European Economic Area, agreement (EU), economic concentration, exchange of information, merger control, ore processing

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 24 January 2001

declaring a concentration to be compatible with the common market and the EEA Agreement

(Case No COMP/M.2033 — Metso/Svedala)

(notified under document number C(2001) 157)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/254/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

Having regard to the Agreement on the European Economic
Area, and in particular Article 57 thereof,

Having regard to Council Regulation (EEC) No 4064/89 of 21
December 1989 on the control of concentrations between
undertakings (1), as
last amended by Regulation (EC) No
1310/97 (2), and in particular Article 8(2) thereof,

Having regard to the Commission decision of 20 September
2000 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

(1) OJ L 395, 30.12.1989, p. 1; corrected version in OJ L 257,

21.9.1990, p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 76, 25.3.2004.

(1)

(2)

(3)

On 7 August 2000,
the Commission received a
notification pursuant to Article 4 of Regulation (EEC)
No 4064/89 (the Merger Regulation) of a proposed
concentration by which Metso Corporation (Metso)
acquires control within the meaning of Article 3(1)(b) of
the Merger Regulation of the whole of Svedala Industri
AB (Svedala).

examining the notification,

After
the Commission
concluded that the notified operation falls within the
serious
the Merger Regulation and raises
scope of
doubts as to its compatibility with the common market,
because it could create or
strengthen a dominant
position as a result of which effective competition
would be significantly impeded in the common market
or in a substantial part of it and in the territory covered
by the EEA Agreement. Therefore, on 20 September
2000, the Commission decided to initiate proceedings
pursuant to Article 6(1)(c) of the Merger Regulation and
Article 57 of the EEA Agreement.

On 22 November 2000, the Commission communicated
its objections to Metso,
issued
pursuant to Article 18 of the Merger Regulation and
Protocol 21 of the EEA Agreement (the Statement of
received Metso's
Commission
Objections).
observations on this Statement on 11 December 2000.

through a statement

The

(4)

(5)

(7)

(8)

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I. THE PARTIES AND THE OPERATION

(9)

Metso is a Finnish company, established in 1999
through the merger (4) of Valmet Corporation and
Rauma Corporation. It is active in three main business
areas: (i) machinery (rock and mineral processing, gears
and components and car manufacturing), (ii) automation
and control
fibre and paper
processes,
technology
machinery and equipment). The 1999 turnover of Metso
was EUR 3 387 million. Metso's activities
in rock
crushing and processing equipment are carried out
through
represent
approximately 15 % of Metso's turnover.

technology, and (iii)
(pulp

its Nordberg

subsidiary,

industry

paper

and

and

(10)

In 1999, Metso and Svedala had a combined aggregate
turnover of more than EUR 100 million in each of
[Æ] (*). The individual aggregate turnover of each of the
parties is also in excess of EUR 25 million in each of
the above Member States.

Finally, the aggregate Community-wide turnover of each
of
the parties is more than EUR 100 million, and
neither of the undertakings concerned achieves more
than two-thirds of
aggregate Community-wide
turnover within one and the same Member State. The
notified
Community
therefore
dimension within the meaning of Article 1(3) of the
Merger Regulation. It also constitutes a cooperation case
under the EEA Agreement.

operation

has

its

a

a

is

construction and mineral processing
Svedala
equipment company listed on the Stockholm Stock
Exchange, and active in equipment for mineral recovery,
processing and handling, such as drilling equipment,
rock crushing equipment,
transport systems, asphalt
paving and compaction equipment. Svedala's 1999
turnover was approximately EUR 1 600 million. 38 % of
this turnover corresponded to the sales of
the Rock
Handling division (crushing and screening equipment).

(6)

The proposed transaction consists of the acquisition of
sole control by Metso over Svedala, through a public
bid announced on 21 June 2000.

IV. INTRODUCTION TO THE ROCK CRUSHING SECTOR

(11)

The competitive impact of the operation will be in the
field of rock crushing equipment, which is sold both by
Svedala and by Metso (under its Nordberg brand). After
the operation, the merged entity will become a global
leader in rock and mineral processing machinery.

A. Applications and technologies

II. CONCENTRATION

Metso is offering to buy all the shares of Svedala, and
the implementation of Metso's offer is conditional on
the acquisition by Metso of more than 90 % of Svedala's
share capital.
the
operation aims at
the acquisition of sole control of
Svedala by Metso, and that the proposed transaction
therefore constitutes a concentration within the meaning
of Article 3(1)(b) of the Merger Regulation.

It can therefore be concluded that

(12)

Rock crushing equipment principally aims at reducing
the size of rock in order to make it suitable for its
expected application. It is therefore primarily used for
the production of aggregates (crushed rock, gravel and
sand) and cement, and in the mining industry (since the
metals or elements to be produced have to be extracted
from finely ground rock). Aggregates are typically
produced
construction
companies which produce their own aggregate supplies
by crushing rock or demolished construction materials.

either by quarries or by

III. COMMUNITY DIMENSION

The aggregate world-wide turnover of Metso for the
fiscal year 1999 was approximately EUR 3 387 million.
The aggregate world-wide turnover of Svedala for the
fiscal year 1999 was approximately EUR 1 588 million.
Therefore, the undertakings concerned have a combined
aggregate world-wide turnover of more than EUR 2 500
million.

(4) See case IV/M.1379-Valmet/Rauma, 8 February 1999.

(13) A typical rock crushing plant will usually involve several
successive stages, each of which achieves an increasing
level of rock fineness and involves a number of possible
technologies:
the first stage of crushing, where large
rocks obtained from blasting or otherwise are crushed,
is referred to as ‘primary crushing’. Rocks obtained
through primary crushing are then typically crushed
further in secondary and subsequent crushing stages.
Once rock has been crushed down to a sufficiently small
size, fine particles can be obtained through grinding.

(*) Parts of

this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

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(14)

(15)

(16)

(17)

itself and/or

impact against

There are essentially four main types of crushing
equipment: jaw crushers (where rock is crushed between
two mechanical jaws), impactors (where rock is crushed
by means of
the hard
surfaces of the device), cone crushers (where rock is
crushed between a mobile cone and a fixed cone, the
mobile cone rotating eccentrically within the fixed cone)
and primary gyratory crushers (based on a technology
similar to that of cone crushers, but with a different
geometry). Within impactors, a further distinction is
generally made between horizontal shaft impactors (HS
impactors) and vertical shaft impactors (VS impactors).
Each type of crushing equipment corresponds to a
specific technology.

lot of

product durability, operating costs will usually be more
important than the amortisation of the original price in
the overall economics of the purchase decision, so that
customers will often pay a
attention to
performance or to operating factors such as reliability,
maintenance costs, security of supply of spare parts, etc.
This is confirmed by the fact that a large majority of
customers which responded to the Commission's
enquiry indicated that they considered operating factors,
especially operating costs, quality, reliability or capacity,
than price when purchasing a rock
more important
crusher.

‘fines’ has

to be obtained,

In some cases, especially in the mining sector, where ore
in the form of
further
reduction may be needed. This will generally be
achieved through a final grinding stage. Grinding
equipment consists mainly of grinding mills and roller
presses. The parties are only active in the area of
grinding mills. There is a wide variety of grinding mill
technologies. A distinction can be made, in particular,
between horizontal tumbling mills, which can be further
subdivided into autogenous mills,
semi-autogenous
mills, rod mills and ball mills, other horizontal mills,
and vertical mills.

contain a number of

In addition to crushing and grinding equipment, a
crushing plant will
smaller
equipment used to move the rock through the different
crushing stages: these are essentially screens, which are
used to control the size of the rocks processed through
the different crushers, conveyors and feeders, used to
move rock from a stockpile to a conveyor or from a
conveyor to a crusher.

(20)

(21)

is

including screens,

Crushing equipment,
feeders and
conveyors, can be fixed or mobile. Mobile crushing
equipment
aggregate
production and in the construction industry. Mobile
crushers are technically similar to fixed crushers, except
that they have been adapted on a wheeled or tracked
chassis.

normally

used

only

in

B. Product durability, risk aversion and service

In addition, rock crushing machinery is often considered
as critical equipment
for aggregate and construction
(A&C) and mining customers. In particular, it appears
from the Commission's enquiry that
failing crushing
equipment may stop the entire operation of the plant
concerned (for periods potentially in the order of several
the
weeks),
aggregate
and competitiveness of
effectiveness
producer or mining customer. This is so because,
in
many instances, customers only have one crusher for
each process
for example, primary crushing,
secondary crushing, etc.).

dramatically

therefore

stage,

affect

and

the

for

rather

appears

aggregate production plant,

The combination of the long durability, of the critical
importance of rock crushing machinery, and also of the
relatively low purchase price of rock crushers when
compared to the overall costs and revenues of a quarry
or
to make
customers very conservative and averse to risks in their
choices. They will often opt
safe and proven
solutions
than turn to less-reputed suppliers
unable to satisfactorily guarantee reliability and security
of after-sales services and spare part supplies, even if
that implies accepting higher prices. That risk aversion
may obviously increase with the loss of revenue derived
from the failure of the rock crushing machinery, or with
the likelihood of that failure. It will therefore usually be
higher for those customers producing valuable goods,
such as metallic mines, or working in difficult
environments, such as hard and abrasive rock. However,
it seems to be a general feature of the industry that rock
crusher customers are very often highly averse to risk.

(18)

Rock crushing equipment often has a very long useful
life, typically in the area of 25 years. Although difficult
working conditions often cause a high wear rate, and
require frequent changes of wear (and of certain spare)
rock crushers are usually robust enough to
parts,
continue operating for very long periods of time.

(19)

This means that price will often not be the decisive
factor when purchasing a new product: in view of the

(22)

The results of the Commission's investigation indicate
that such risk aversion will manifest itself in a number
of different ways. For instance, customers will attach a
lot of importance to the product reliability and quality
it has
and to the supplier's reputation.
been indicated that
their
suppliers to provide them with an adequate reference
including customers processing the same type of
list,
rock.

In particular,
customers often require

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(23)

that

to obtain all of

For the same reasons, the results of the Commission's
investigation suggest
turnkey plants, primarily
procured for the establishment of green-field crushing
sites or major capacity expansion, are often awarded to
those equipment suppliers with a broad product range.
Although customers might theoretically have recourse
to an independent engineering firm for
the overall
design of their plant and then split the provision of the
equipment concerned over a variety of suppliers, they
usually prefer
those products and
services from one single company, because the overall
responsibility for the turnkey plant would be borne by
one single company,
instead of being shared between
engineering consultants and a number of equipment
suppliers. As a customer
the
range of equipment the OEM has to offer, the greater
the potential to supply the turnkey plant. Matching and
guaranteeing the performance of crushers and screens is
in achieving the full criteria in terms of plant
vital
is not uncommon to purchase equipment
design.
to
from different
purchase from one if
the
performance required’.

the preference is
they are able to meet

suppliers, but

‘the greater

indicated,

It

(24)

In its response to the Statement of Objections, Metso
the aversion to risk, on the part of
considers that
customers, described by
the Commission is not
supported by the significant entry/expansion within the
rock crusher markets in the EEA. Metso refers in this
context to a list of significant new entrants.

The argument of
significant entry within the rock
crusher markets is not supported by the Commission's
investigation. Many of the competitors mentioned in the
list of new entrants provided by Metso, are in fact long
established manufacturers of crushing equipment or
companies which have
entered into new markets
through acquisitions. In addition, as indicated in recitals
the Commission's
156 to 162,
investigation clearly indicate that the barriers to entry
within the rock crushing industry are high.

results

the

of

(25)

(26)

(27)

(28)

Customers also indicated that they attached substantial
importance to the financial security and commitment of
their equipment suppliers, because of their insistence
they be able to find adequate spare parts and
that
services
rock
for
crushing equipment.

the whole life duration of

their

the customers' risk aversion means that

they
Finally,
often wish to develop longstanding relationships with
their rock crusher suppliers, and in particular that the
provider of their initial green-field, turnkey plant, will
often have an advantage over its competitors for the
replacement of used machines. For instance, the data
submitted by the parties
the parties'
success rate is usually substantially higher for those
customers to which they supplied the initial turnkey
plant than for other categories of customers.

indicate that

(29) As regards turnkey plants and longstanding supplier
relationships, Metso considers,
in its response to the
Statement of Objections, that the market for turnkey
plants is in fact dominated by ‘systems integrators’ and
that Metso and Svedala are not ‘full-line’ suppliers able
to supply a full turnkey contract. Metso also submits
that suppliers of turnkey plants only have a minimal
advantage over their competitors.

(30)

there is no evidence of
In fact,

The Commission's investigation does not support those
‘systems
arguments. First,
engineers’ dominating the market.
several
engineering companies consulted by the Commission
stated that their participation usually happened via the
original equipment suppliers. Secondly, as indicated in
recital 28, the results of the Commission's investigation
clearly indicate that suppliers providing a wide range of
equipment are in a better position than others to supply
a turnkey plant, and that Nordberg and Svedala are
considered to be the suppliers with the broadest product
portfolio.

C. Rock crusher customers

Furthermore, the long durability of the products, and
the need for periodic maintenance and changes of parts
also mean that customers often pay a lot of attention to
the provision of ancillary services, such as the supply of
spare parts and wear parts, the provision of timely and
effective maintenance
advice on process
services,
improvement or on the integration of new equipment
within the crushing plant, etc. In particular, it appears
investigation that customers
from the Commission's
usually pay a lot of attention to,
the
the fact
equipment supplier has a national or regional presence
near their site, and very often require them to do so.

that

(31) Demand for crushing equipment essentially comes from
five types of customers:
(i) cement companies, which
use crushers for the production of cement as well as for
the production of aggregates for sale to third parties, (ii)
and
construction and civil
specialist demolition contractors, which use crushers for
the production of aggregates from demolished buildings
and from rock,
independent aggregate producers,
which produce aggregate from quarries for sale to road
and railway construction companies, and for building

engineering companies

(iii)

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construction and landscaping purposes, (iv) contractors,
hired to crush rock on a contract basis, and (v) mining
companies, which crush the extracted mix of rock and
ore into finely ground particles, which are processed so
as to separate the metal or the mineral ore from the
rock.

in particular the relatively small size of EEA
reasons,
mining customers when compared to the global average,
the high proportion of companies with activities in the
EEA only, and the relatively high proportion of cement
companies and very large quarries, which are often less
used to working in remote and difficult areas.

(32)

it appears

Broadly speaking,
from the Commission
investigation and from the parties' submission that rock
crushing customers may be categorised into two groups,
depending on the type of equipment they purchase and
on their procurement pattern: smaller A&C customers
on the one hand, and larger mining companies or
aggregate and cement producers (mining customers) on
the other hand. A&C customers include independent
aggregate producers and contractors, construction and
civil
demolition
contractors, and cement companies, when they purchase
smaller crushers for the production of aggregates sold to
third parties. By contrast, mining customers include
mining companies, very large size quarries and cement
producers,
the
larger
production of cement.

engineering

companies,

purchasing

equipment

specialist

for

(33) A&C customers

small-size

in view of

are usually

companies
operating on a local or national basis, each purchasing a
limited number and range of crushing products. Those
customers usually only procure the smaller crushers,
and,
the need for additional services as
described above in recital 26, such as provision of spare
parts,
process
improvement or new purchases, almost exclusively
purchase their equipment from the supplier's national
agent or distributor, with whom they very often have a
close on-going relationship.

technical

support,

advice

for

(34)

than A&C customers

By contrast, mining customers are usually large-size
companies,
in several
sometimes with a presence
countries or even continents, which usually purchase
larger, high capacity equipment, albeit in much smaller
quantities than A&C customers. Their size, and the fact
that they may operate in remote areas, may make them
less dependent
for national
support, and they often procure through international
in the EEA, mostly regional competitive bidding.
and,
However,
Commission's
investigation that, at least in the EEA, proximity still
plays an important role in the selection of the rock
crusher supplier. For instance, several mining customers
their
indicated that
supplier to have a presence in the region, for example,
the EEA of
their site. Almost all mining customers
considered at least, that having a regional presence was
equipment
competitive advantage
a substantial
suppliers. This appears to be due to a number of

they considered it essential

from the

appears

for

for

it

(35)

Finally, it should be noted that A&C demand is often
fragmented but concerns relatively large quantities of
crushers, typically several hundred units per year in the
EEA, while mining demand concerns a very limited
number of products. For instance, the average EEA-wide
market volume for gyratory crushers has been only two
units per annum since 1990.

(36)

(37)

D. Rock crusher suppliers

Rock crushers are usually produced in a very limited
number of manufacturing plants world-wide:
for
instance, Svedala manufactures all of its Jawmaster series
of jaw crushers in Brazil, while Nordberg produces all
of its G-series cone crushers in Finland. Products are
then sold either directly by the central sales office of the
equipment manufacturer, or,
in the case of A&C
products, through a network of agents, distributors or
subsidiaries each with an allocated, and often exclusive,
territory.

The rock crushing industry is characterised by a
continuum of companies, from the large, international
and broad-range firms, such as Svedala, Nordberg, Terex
or Krupp, to the smaller companies offering a limited
number of products in a narrow geographic area, such
as Haahjem Base, selling A&C jaw crushers in the
Nordic countries, or Rodrigo Matias Magalh¼es, only
active in Portugal. Between these two extremes, one can
level and selling
find companies active at
regional
the A&C and the mining
products in only one of
segments,
Br(cid:1)uer
Aufbereitungsmaschinen, or in one process stage or
technology,
such as Kleemann & Reiner, Extec or
the
Magotteaux. There are also companies active at
global level but only selling a limited range of products,
such as
FL Smidth-Fuller, which primarily offers
gyratory crushers and grinders to the mining customers.

BHS, MEM or

such

as

E. Procurement

(38)

Rock crushing equipment is usually procured through
competitive bidding, either emanating from national

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in the case of A&C products, or

for
distributors,
example from the central regional sales centre of the
equipment supplier,
in the case of mining products.
Customers may either purchase a limited number of
products or a whole crushing installation. In the latter
is often made through a turnkey
case, procurement
contract.

(42)

First, as indicated in recital 13, the crushing process is
almost invariably carried out through successive stages,
each taking as an input the output of the previous stage
so as to achieve further size reduction. For instance,
aggregate production is usually made
through a
two-stage process involving a jaw crusher or horizontal
shaft impactor (HS impactor) at a primary stage, and
another crusher, for example cone crusher, HS impactor
or vertical shaft impactor (VS impactor) at a secondary
stage. Similarly, the processing of mining ore, which
aggregate
requires
production and involves larger quantities of rock,
is
typically achieved through a three-stage plant, using a
large jaw crusher or a gyratory crusher at a primary
step, a cone crusher at a secondary stage and a grinding
mill or roller press for finishing work.

reduction

further

than

size

(43)

(44)

(45)

(i.e. primary processing,

technology, which can be used either

In that context, it appears that products used at different
crushing stages
secondary
processing, and finishing) are not substitutable with
each other, because they will usually not be able to
process the same size of rock and to deliver the same
the horizontal shaft
output. With the exception of
impactor
for
primary or for secondary crushing, it appears that each
crushing technology is mainly used at one process stage
(primary crushing,
secondary crushing, or grinding)
follows that a distinction should be made
only.
It
between
used
predominantly for primary processing (such as jaw
crushers and gyratory crushers), those which are mainly
used for secondary crushing (such as cone crushers,
vertical shaft impactors) and those which are used for
final grinding (such as roller presses or grinding mills).

technologies

which

those

are

Secondly, it appears that, even within the same process
stage, different technologies are usually not used for the
same purposes. For instance, different technologies may
be used for different rock qualities, as is shown by the
fact that horizontal shaft impactors are primarily used
for soft
rock applications, while cone crushers are
generally considered for hard rock crushing and
different
capacity
technologies may meet different
requirements, since jaw crushers are adequate for low
gyratory
and medium tonnage operations, while
crushers are best suited for high-capacity crushing. In
that context, it is concluded that each technology will
mostly correspond to a specific field of application,
where it will usually not compete with other crushers.

there

to be

appears

Finally,
supply-side
substitutability from one technology to another. This is
indicated by the results of the Commission investigation,
since most competitors indicated that they could not
technology to
easily switch production from one

limited

(39)

(40)

(41)

In practice, turnkey contracts are relatively rare in the
EEA. For instance, they account for less than 11 % of
A&C crusher sales in that region, and for an even
smaller proportion of mining crusher sales. Most sales
take place in the context of either
replacement of
existing equipment, or expansion of existing sites.
However, it should be noted the actual importance of
turnkey contracts may greatly exceed their share of the
market volume. In particular, the fact that Nordberg and
Svedala's respective success rates are usually higher in
those cases where they supplied the initial plant than in
other cases, suggests that the award of a turnkey plant
may confer the supplier with a significant advantage
over its competitors when it comes to replacing some of
the crushers concerned, for instance because the initial
supplier knows
customer and
therefore can propose an optimal solution, or because
integration within the rest of the plant will be easier. In
that context, turnkey contracts may also be viewed as a
longstanding
to
means
relationships with their customers, in order to facilitate
future equipment sales.

the plant

and the

suppliers

establish

for

V. THE RELEVANT MARKETS

A. Relevant product markets

The parties submit that rock crushing equipment may
be categorised both by technology, that is to say,
jaw
crushers, cone crushers, etc., and by type of application,
namely, cement production and mining applications on
the
and
construction on the other.

production

aggregate

hand,

one

and

Segmentation by technology

The parties submit that, despite a degree of demand-side
substitutability between the various technologies, each
technology could belong to a distinct product market.
This has been confirmed by the
the
Commission's investigation, from which it appears that
each technology will generally be primarily used within
a specific domain, where other technologies would not
be technically or economically viable.

results of

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to entry:

another. This is also confirmed by the presence of
substantial barriers
in particular, a vast
majority of competitors and customers indicated that it
usually took several years to develop and introduce a
new type of equipment, and that customers very often
required suppliers of new equipment to offer physical
demonstration of their products, to test them for a long
period of time under the customers' field conditions,
and even to provide a satisfactory reference list of
existing customers for the same product.

although certain rock crushing technologies may be
used for both A&C and mining applications, A&C
customers will usually procure the smaller equipment,
while mining customers will usually purchase the high
end, high capacity versions of machines; and , secondly,
the conditions of competition between A&C crushers
and mining crushers are different, because mining
customers tend to purchase products on a global basis,
contrary to A&C customers who source rock crushing
equipment on narrower basis.

(50)

(51)

(52)

(46)

(47)

is

limited

supply-side

substitutability

Such
also
confirmed by the presence of specialised manufacturers
such as Canica-Jaques and Magotteaux (vertical shaft
impactors), and by the fact that, more generally, most
equipment suppliers do not manufacture the whole
range of applicable technologies. For instance, it appears
that only a very limited number of
rock crusher
suppliers in the EEA actually produce cone crushers,
and that most suppliers focus on a limited range of
products.

Jaw crushers, gyratory crushers,
impactors, vertical

The results of the Commission's investigation therefore
indicate that there are distinct product markets for each
cone
technology.
crushers, horizontal
shaft
impactors, grinding mills, and roller presses therefore
each belong to specific product markets. Screens, feeders
and conveyors also appear to constitute distinct product
markets.

shaft

Segmentation by size/application

D i s t i n c t m a r k e t s f o r A & C c r u s h e r s a n d f o r
m i n i n g c r u s h e r s

(48) Within each technology, products may come in a variety
of sizes, from small products to very large products. The
parties submit that, on the demand side, all products are
linked by a chain of substitution, so that a product of
any given size will competitively constrain its immediate
larger and smaller neighbours; and the parties also
submit that, on the supply-side, it is easy to switch from
one size to another, because technologies are fairly
the substantial
simple and also because,
sub-contracting of the manufacture of component parts,
the manufacture of larger or smaller products does not
require substantial investment.

in view of

the parties submit

Finally,
that, within mining cone
crushers, very large cones should constitute a specific
product market, even different
for
smaller mining cones, because the very large cones are
and have
usually twice
largest
approximately twice the capacity of
products.

from the market

and heavy,

expensive

the next

as

the Commission investigation seem to
The results of
confirm the parties' view that products of various sizes
are usually linked by a chain of
supply-side and
demand-side substitution. However, at the same time,
they indicate that the larger the products, the fewer the
competent equipment producers; and, in particular, that
manufacturers of A&C products may not always be able
to sell products to the mining customers. This suggests
the
supply-side
thresholds
substitutability, and would indicate the existence of
distinct product markets for the smaller equipment (i.e.
the A&C crushers) on the one hand, and for the larger
equipment (i.e. the mining crushers, which are primarily
sold to mining customers, but also to some extent to
A&C customers) on the other.

presence

the

of

in

in

of

the

presence

supply-side
thresholds
The
substitutability is further confirmed by a number of
additional elements. In particular, there are indications
that crushers of different sizes may also require different
manufacturing plants. For instance, the data provided by
the parties suggest that Nordberg has had to split the
production of its cone crushers in three different sites
and
(namely Macon
(France), Tampere
Milwaukee
the
smaller crushers, the medium crushers and the larger
crushers. Furthermore, a vast majority of competitors
indicated that larger crushers were usually much more
difficult
than smaller crushers,
particularly because they implied higher risks and costs,
and because they were less easily tested.

(Finland)
respectively manufacturing

to produce and sell

(USA))

(49) Nevertheless,

submit

the parties

that a distinction
should be drawn between crushers used for aggregate
production and construction (A&C crushers) on the one
hand, and crushers used for mining applications, very
large quarries and cement production (mining crushers)
on the other hand (5). They consider,
that,

firstly,

(5) The accurate definitions

for

larger and smaller equipment as

provided by the parties are detailed in Annex I to this document.

(53)

there are strong indications that A&C
Furthermore,
crushers and mining crushers require a distinct business
model. The results of
the Commission's investigation
indicate that competition for A&C crushers is driven by
a strong emphasis on service and presence at a national
level, and by the need for producers to sell relatively

L 88/8

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Official Journal of the European Union

25.3.2004

to achieve

sufficient
high quantities of products
economies of scale. By contrast, mining crushers are
usually sold in much lower quantities (for instance, the
annual EEA market volume for mining HS impactors is
more than 20 times lower
for A&C HS
they are often produced on order, and
impactors),
competition relies to a much smaller extent on a dense
distribution network.

than that

(54)

is

It
therefore concluded that, within each crusher
technology, a distinction should be made between
(smaller) A&C crushers and (larger) mining crushers.

P r e s e n c e o f a d i s t i n c t p r o d u c t m a r k e t f o r
v e r y l a r g e , h i g h c a p a c i t y c o n e c r u s h e r s

(58)

consider

The parties
that Nordberg's MP800 and
MP1000 cone crushers constitute a separate market, in
which there is no other product from any manufacturer
in the world. The MP800 and MP1000 are the largest
commercially available cone crushers
in the world.
According to the parties,
the MP800 and MP1000
belong to a separate market in particular because the
crushing force of
these two products is substantially
higher than that of any other commercially available
cone crusher.

N o m a r k e t f o r s o - c a l l e d ‘ h y b r i d ’ j a w
c r u s h e r s

(59)

(55)

the parties

In a submission to the Commission dated 14 September
2000,
amended the product market
definition they had originally proposed for jaw crushers,
submitting that a third ‘hybrid’ category of jaw crushers
should be considered in addition to A&C jaw crushers
and mining jaw crushers. The parties suggest that this
hybrid category corresponds to jaw crushers with an
intake opening between 1,25 m and 1,5 m and that it
constitutes a distinct relevant product market, because
jaw crushers in this category are predominantly sold
through regional (for example, EEA-wide or Asia-wide)
tendering procedures, whereas larger jaw crushers are
normally sold through world-wide tendering and are
purchased essentially by mining customers.

(60)

(56) However,

it appears from the data submitted by the
parties that more than [Æ]* of all jaw crushers with an
intake between 1,25 m and 1,50 m sold by Nordberg
and Svedala in the EEA are purchased by customers
who belong to the A&C segment. Furthermore, most
A&C customers have indicated to the Commission that
they do not purchase large crushers and small crushers
in different ways. In fact, most A&C crushers rely on
national distributors of crushing equipment for all of
their supplies, regardless of the size of the equipment
the Commission concludes that
purchased. Therefore,
the conditions of competition remain essentially the
same for all
jaw crushers with an intake of less than
1,5 m and that it would be artificial to distinguish a
jaw
separate market
crushers.

category of

‘hybrid’

the

for

(57)

is therefore concluded that

jaw crushers may be
It
categorised into two product markets: one for A&C jaw
jaw crushers with an intake of
crushers (including all
less than 1,5 m), and one for larger
jaw crushers
(typically used in mining applications including very
large quarries).

The results of the Commission investigation also tend to
confirm the presence of a distinct market for very large
cone crushers as submitted by the parties. However,
some third parties disputed the parties' assertion that
the only products competing in that market were
Nordberg's MP800 and MP1000, on the basis that
Svedala's
its H8000 model)
competes with Nordberg's larger cones. Some third
parties also indicated that they view the H8000 model
as
crushers,
including in particular the HP800, a cone crusher of a
size similar to that of the MP800, but with a lower
crushing force.

to other Nordberg cone

comparable

(namely,

largest

cone

to

have

parties

provided

information

crushers. On some of

the
The
Commission which shows
that on many occasions,
Svedala has offered its H8000 cone crusher as an
alternative to Nordberg's, MP800, MP1000, HP800 or
HP700 (6)
these occasions,
Svedala has actually been able to convince its customer
to purchase its H8000 cone rather
than one of
Nordberg's very large cones. Furthermore, the internal
documents
from Metso analysing the conditions of
competition for large cone crushers invariably take into
account, not only Nordberg's MP1000 and MP800
crushers, but also Svedala's H8000 and Nordberg's
HP800 and HP700 products.

(61) All these very large cones appear to share common
technical characteristics. They all have a nominal power
rating over 500 kW; their liner diameter is larger than
1 800 mm and they weigh over 60 tonnes. Such
crushers are typically used in heavy duty and high
volume mining applications. There are only two other
products available in the market which appear to share
some of the technical characteristics of Nordberg's and

(6) The HP700 has physical characteristics similar

the
HP800, except that its nominal power is 560 kW instead of 600
kW.

to that of

25.3.2004

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Official Journal of the European Union

L 88/9

Svedala's high capacity
KFS2100 cone crusher, and,
Z18 (7) cone crusher, both manufactured by Kawasaki.

these
to a lesser extent,

crushers:

cone

are
the

(62) All the above-mentioned high capacity cone crushers
(including Kawasaki's products) have estimated unit
prices over EUR 800 000, which is more than twice the
‘normal’
average price estimated by the parties for
very
mining cone
substantial price difference shows that high capacity
substitutable with
cone crushers are normally not
smaller
cone
(i.e.
crushers with a liner diameter above 1,5 m and below
1,8 m).

‘normal’ mining cone

(EUR 370 000). This

crushers

crushers

(63)

same

The parties have submitted that
larger mining cone
crushers other than the MP800 and MP1000 belong to
the
and demand-side
substitution as other mining cone crushers. They have
also indicated that one high capacity cone crusher can
be replaced by two smaller cone crushers.

supply-side

chain of

(64) However,

it appears

that besides

the parties and
Kawasaki, which is marginally present in this business
area, no other rock crushing manufacturer is supplying
high capacity cone crushers with a power rating above
500 kW. Furthermore, most competitors have indicated
to the Commission that developing larger products is a
difficult
in
particular has indicated it would take up to five years to
successfully develop and market a very large cone
crusher.
from a
It can therefore be concluded that,
supply side perspective, the ‘normal’ and smaller mining
cones are not substitutable with the high capacity, very
large cone crushers.

and lengthy process: one

competitor

(65)

(66)

[Æ]*. Furthermore,

The price differences between the two categories of
products are a clear indication that customers cannot
substitute smaller crushers to high capacity, very large
cone crushers. The submission made by the parties that
it could be possible to substitute one very large cone
crusher with two smaller crushers appears to be entirely
two
theoretical.
smaller cone crushers rather than one high capacity
additional
crusher
and
ancillary equipment
and
conveyors),
additional maintenance. That choice would therefore
imply higher overall purchase price and operating costs.
It would thus normally not be economical for a mining
customer to choose two smaller cone crushers rather
than one high-capacity crusher.

complexity,
screens,

feeders
personnel

the choice of

additional

additional

operating

(such as

entails

In its response to the Statement of Objections, Metso
states that according to its experience, mining cones can
in
be

replaced

smaller

(A&C)

cones

two

by

(7) Strictly speaking, the Z18 cone crusher cannot be compared with
the parties' high capacity cone crushers since its nominal power
rating is significantly lower (330 kW).

approximately 60 % of cases. Metso also considers that
there are certain advantages of using two smaller cones;
total breakdown will be
for example the risks of
decreased. The Commission recognises
the (limited)
advantages of using two pieces of equipment instead of
a single one but considers that this type of advantage is
not sufficiently important to compensate for the extra
costs
and
complexity of purchasing,
maintaining two pieces of equipment instead of one.
[Æ]*.

using

and

(67)

relevant

It can therefore be concluded that high capacity cone
crushers constitute a distinct product market. The
parties have suggested that, within mining crushers,
Nordberg's MP800 and MP1000 products belong to a
separate
the
Commission concludes that the operation will create a
dominant position in the high-capacity cone crusher
irrespective of whether or not MP800 and
market,
MP1000 belong to this market. Therefore,
the exact
definition of
the high capacity cone crushers market
may be left open.

product market. However,

(68)

there are separate product markets

In the light of the above, the Commission concludes
that
for A&C
crushers (smaller) and mining crushers (larger); and that,
within mining cones, very large high-capacity cones
constitute a specific product market.

Distinction between new crushers and used crushers

(69)

(70)

Rock crushers are usually highly durable products which
have long useful lives. For instance, the typical life span
for A&C jaw crushers is estimated to be around 25
years, but there are crushers operating today which have
been in use for more than 40 years. In view of this
durability,
there is a large stock of used equipment,
which may be proposed to customers as an alternative
to new equipment.

In that context, it is necessary to examine whether used
equipment should be included in the same market as
new equipment, or instead whether new crushers and
used crushers form part of distinct product markets. The
results of the Commission investigation broadly indicate
that used equipment
is generally not viewed as a
substitute to new equipment. First, most competitors
indicated that they did not consider the presence of
used equipment to act as a substantial constraint on the
conditions of competition for new crushers, all
the
more so as used equipment in a satisfactory shape is
scarce and as new technology makes older products
obsolete and uneconomical.

L 88/10

EN

Official Journal of the European Union

25.3.2004

(71)

(72)

to result

from the

Secondly, although customers indicated that they could
consider used equipment when deciding on the
purchase of a crusher, it appears that, in practice, very
few have recently procured used equipment. This
appears
the
customers' high risk aversion as indicated above in
recital 21 on the one hand, and to the risks associated
with the purchase of used equipment on the other hand:
for instance, the reliability, performance and durability
of used equipment may not be secured, there is often
no period of guarantee, and, in the case of old products,
it is questionable whether the supply of spare and wear
parts can be obtained on a durable basis.

combination of

Finally, those customers who indicated that they were
prepared to buy used equipment stated that they would
only do so for relatively new equipment with few hours
of
from the
Commission's investigation that, usually, used machines
are very old and outdated.

utilisation, while

appears

also

it

(73)

In the light of the above, it is therefore concluded that
there are separate markets for used crushers and new
crushers.

Conclusion

(74)

(ii)

In the light of the above, it is concluded (i) that used
and new crushing equipment
crushing equipment
that new
belong to distinct product markets;
equipment should be categorised by technology;
(iii)
that each technology should be further segmented by
size/application into A&C products on the one hand,
and mining products on the other hand; and (iv) that,
within mining cone crushers, very large high-capacity
cone crushers constitute a distinct product market. A
table summarising the relevant product markets can be
found in Annex I.

B. Relevant geographic markets

(75) Metso submits that the markets for mining crushers are
world-wide, because customers source products on a
global basis. The parties also submit that the markets for
A&C crushers are at least EEA-wide, because products
the EEA are very similar, because
sold throughout
transport costs are very low, because production is
locations, and because
made at a limited number of
distribution does not create barriers
to entry. As
indicated above for example in recital 26, sales of rock
crushing equipment do not only comprise the supply of
the products concerned, but are usually associated with
the provision of a number of after-sales services, such as
maintenance and overhaul, spare parts and wear parts,
It follows that the dimension of the markets for
etc.
is determined not only by the
crushing equipment

geographic scope of the manufacturing level, but also by
the conditions of competition for the provision of the
after-sales services. [Æ]*.

A&C products

In

particular,

rather
for A&C products.

In its decision to initiate proceedings in this case, the
Commission identified a number of
factors pointing
towards national
than EEA-wide geographic
the
markets
Commission underlined, firstly, that A&C customers rely
on national distributors, secondly, that there appeared to
be significant barriers to entry preventing suppliers
from extending their operations into Member States
that
where they were previously absent and,
there were substantial variations in prices and in market
shares from one Member State to another. However, in
view of the presence of other factors pointing in the
direction of possibly broader geographic markets, the
Commission left the exact definition of the geographic
markets for A&C crushers open.

finally,

In a written submission to the Commission dated 17
September 2000, the parties endeavoured to address the
different issues raised by the Commission in relation to
the geographic scope of the A&C markets. The parties
they
followed two main lines of argument. Firstly,
to entry into the different
submitted that barriers
European national markets are low. Secondly,
they
claimed that a proper analysis of
the purchasing
patterns of A&C customers should demonstrate that
customers do not depend significantly upon national
distributors.

(76)

(77)

(78) As regards the level of the barriers to entry into the
different Member States, the parties underlined that it is
not necessary to have a dense distribution network to
be active in a given country. For instance, Nordberg's
German distribution network consists of a subsidiary,
with one outlet, plus five distributors, with one outlet
each. The number of
staff working in Nordberg's
German distribution network does not exceed [Æ]*
recruitment of
the
people. Metso considers
competent commercial and technical
is not a
staff
complex task, that appropriate third-party distributors
are easily available and that
investment
requirements are minimal.

the financial

that

(79)

Concerning the purchasing patterns of A&C customers,
the parties indicated in particular that a majority of
technical
customers obtain spare parts, wear parts,
support and maintenance services either internally or
from independent
in the
opinion of Metso, after-sales services do not in any way
make A&C customers dependent upon national OEM
distributors. Furthermore, Metso provided examples of

third parties. Therefore,

25.3.2004

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Official Journal of the European Union

L 88/11

cross-border sales by distributors which, in the parties'
view, is further evidence of the EEA-wide scope of the
A&C markets.

D e m a n d s i d e c o n s i d e r a t i o n s

for

for

and

that,

agents

almost

services

complex

routine maintenance
third parties,
distributors or

The results of the Commission's detailed investigation
confirm the national dimension of A&C markets. First, it
appears that, although customers may obtain most wear
parts
from
and
they still depend on the
independent
all
producers'
specialised key services or parts. For instance,
it has
been indicated that a majority of spare parts cannot be
obtained outside the equipment supplier's distribution
network,
important
maintenance operations, recourse to the distributor is
necessary. Furthermore, it appears that, even for those
services which might be sourced from independent
suppliers, it is often more effective and competitive to
rely on the distributor. For instance, although process
from
engineering
engineering consultants, customers will generally turn to
the
process
engineering as an integral part of the crusher sale and
therefore provide that service free of charge. Finally,
certain customers indicated that,
for certain services
(especially process engineering), they were not aware of
any third party supplier in their territory.

distributors, which

services may

purchased

consider

usually

be

or

Secondly, and more generally, relationships between the
customers and the producer's distributors are not
restricted to the supply of parts and the provision of
maintenance services. In particular, a large majority of
customers indicated that they require close and frequent
contact with their equipment supplier's distributor, and
that their relationships with that distributor extended to
discussions over future improvements or expansions,
technical advice, etc. The importance of
local
presence may also be explained by the customers' risk
aversion: in a way, the presence of a national distributor
can be viewed as an element of additional security in
the case of any serious problem, and as a sign of the
equipment
continue
commitment
producer's
supplying and assisting their customers.

that

to

it

of

of

have

barriers,

territory

language

exclusive

is difficult

their own initiative,

additional
spare parts,
(transport, exchange, etc.) costs, etc. Furthermore, most
distributors
agreements:
although customers may still be able to contact foreign
distributors at
to
understand how those distributors would manage to
required by
achieve the close and frequent contact
customers
to discuss on future
(and in particular
purchases, improvements, etc.) without infringing their
contractual
it appears
restrictions. Finally,
in practice,
from the Commission's investigation that,
even those customers who would decide to turn to
to obtain
foreign distributors might not be able
equipment or
in
particular, several customers have referred to examples
of situations where distributors located outside their
country refused to serve them directly and instead
redirected them towards
appropriate national
distributors.

from those distributors:

territorial

services

the

(83)

is

It
therefore
considerations clearly point
for A&C rock crushing equipment.

concluded

that

demand-side
towards national markets

S u p p l y - s i d e c o n s i d e r a t i o n s

(84) As far as the supply-side is concerned,

there is no
indication that suppliers in other Member States or
other foreign countries could start operations in a new
Member State in the short term and without incurring
significant additional costs or risks.

(85) Although the distribution network required to be active
in a given Member State need not be particularly dense,
and the physical investment required to set up such a
distribution network need not always be substantial,
most competitors and A&C customers indicated that
setting up a new distribution network would require
it appears
substantial efforts and time.
a new
from the Commission's
distributor would
customer
have
relationships and confidence necessary to start selling
products, would have to demonstrate its products'
reliability and quality, and would have to convince
customers of
its ability to supply spare parts and
after-sales services in a timely and effective manner.
According to the vast majority of customers and
competitors, this could take several years.

In particular,
investigation that
build
to

the

to deal with distributors outside

it appears from the Commission investigation
Thirdly,
is both ineffective and often impossible for
that
it
their
customers
the vast majority of A&C
country.
customers who
the Commission's
investigation indicated that foreign distributors would
not constitute credible alternatives to distributors in
their own country, because of longer delivery times for

In particular,

responded

to

(86)

In particular, one of
the competitors among those
which, according to the parties, have been able to
expand successfully the geographical
their
operations declared that ‘the greatest challenge to [Æ]*
effective
the
establishment of secure and reliable distribution and
after-sales service/support functions’. Furthermore, A&C

exploitation

commercial

reach of

[Æ]*

is

(80)

(81)

(82)

L 88/12

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Official Journal of the European Union

25.3.2004

customers appear to be very reluctant to purchase from
a supplier whose reputation would not be sufficiently
established. Therefore, expanding one's operation from
one Member State into another is a complex task, which
cannot be accomplished in a short period of time.

(92)

it

the above,

the
In the light of
geographic markets for A&C crushing equipment (i.e.
A&C jaw crushers, A&C HS impactors, A&C VS
impactors, A&C cone crushers and the ancillary screens
feeders and conveyors) are national.

is concluded that

(87)

the fact

The national character of A&C crusher markets
is
further confirmed by the fact that several manufacturers
of A&C equipment have no or very little activity outside
their home country. The parties believe that this could
be explained because of the limited size (and therefore
appeal) of certain national markets. The Commission,
however, observes that, first, the parties' argument is an
acknowledgement of the need for a national distributor,
the establishment of
and of
such a
distributor
straightforward and costless
operation; and secondly, that some producers active in
the
certain Member States are absent
largest national markets such as Germany and the
United Kingdom.
the
‘insufficient’ volume of certain national markets is not
the main reason why producers refrain from extending
the reach of their activities, and therefore suggests that
barriers
to entry between Member States are not
negligible.

from some of

that
a

is not

clearly

shows

This

that

Mining products

In its

response

for mining products

(93) As indicated above in recital 75, the parties submit that
are
the geographic markets
to the Statement of
world-wide.
there may be some
Objection, Metso accepts
for
justification for defining the geographic market
mining jaw and horizontal shaft impactor crushers as
EEA-wide, but puts forward a number of arguments to
support a world-wide scope for the primary gyratory
crushers market.

that

(88)

It follows that supply-side considerations also indicate
the presence of national markets for A&C rock crushing
equipment.

O t h e r e l e m e n t s

(89)

(90)

for A&C
The national dimension of
crushing machinery
confirmed by the
presence of substantial variations in market shares and
prices from one Member State to another.

the markets

further

is

instance, Nordberg's market share of A&C jaw
For
crushers in Finland is approximately [75 to 85 %]*,
compared with its average EEA market share of [15 to
25 %]*. Similarly, Svedala has been the only company to
sell vertical shaft impactors in Sweden for each of the
last three years, while its aggregate EEA market share
does not exceed [15 to 25 %]*. Although the parties
consider that variations in market shares are irrelevant
for the purposes of
the definition of the geographic
markets, the very substantial variations observed here
mean that the competitive situation is not homogeneous
across the EEA. This is a clear indication that
the
geographical markets are narrower than suggested by
the parties.

(91)

[Confidential: This section concerns price differences
between Member States for rock crushing equipment
sold by Metso]*.

(94)

(95)

First, Metso considers that the scope of the geographic
market may vary from one type of mining crusher to
another type. In Metso's view, certain types of mining
crushers, such as jaws and horizontal shaft impactors,
are simple, ‘commodity-like’ products, for which there is
usually sufficient competition at regional (e.g. EEA-wide)
level so that customers will not feel obliged to purchase
or compare prices on a wider than regional basis. On
the other hand, according to the parties, certain types of
mining crushers, such as primary gyratory crushers, are
and
purchased
well-informed customers who will normally obtain
offers from world-wide suppliers before purchasing.

sophisticated

infrequently

by

In order to support its argument, Metso has analysed
five recent occasions on which one of the parties has
sold a primary gyratory crusher in the EEA. On three of
those occasions, the customer visited potential suppliers
in the United States (F.L-Smidth-Fuller, Metso or Svedala)
and/or in Japan (Kobe); on two other occasions, the
customer made site visits in a number of countries and
the seller
team which
included experts from Sweden and the United States, as
well as members of its local distribution organisation.

(Svedala) assembled a sale

(96) As indicated above in recital 34, mining customers are
generally large international companies, which, being
used to operating in remote and sometimes difficult
places, and having substantial resources, have managed
to reduce the need for close on-going relationships with
the equipment
In particular,
supplier's distributors.
mining customers may meet some of their maintenance
and spare part needs in-house, by constituting local
spare parts or by training their own
stocks of
maintenance personnel.

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Official Journal of the European Union

L 88/13

(97)

(98)

(99)

In that context, in view of the fact that those customers
repeatedly procure rock crushing equipment for their
various operations world-wide, and given the high value
and complexity of mining crushers, mining customers
often procure mining equipment on a centralised basis
and through international competitive bidding with the
head sales office of equipment suppliers. In view of the
apparently low level of
transport costs, equipment
producers from around the globe may be authorised to
effectively compete for the equipment concerned.

in favour of

The factors explained in recitals 95 to 97 would appear
a broad (possibly global)
to point
geographic dimension for the mining crusher markets.
the Commission's detailed
However,
investigation indicate
especially in the EEA,
that,
competition actually takes place on a narrower basis.

the results of

D e m a n d s i d e c o n s i d e r a t i o n s

require

they usually

It appears from the Commission's investigation that,
although mining customers are usually much less
dependent on a local presence from the equipment
supplier,
crusher
still
producers to offer effective and timely support (repair,
spare parts, etc.) at EEA level. As a
provision of
customer indicated,
‘as well as equipment functionality
and service, a vendor is often selected on their ability to
supply expediently key non-stock items that fall outside
the
the scope of
vendor's scope of work may also include the supervision
of a local maintenance contractor’.

routine maintenance.

In addition,

rock

(100)

In their response to the Statement of objections, the
parties disputed that the requirement for supervision of
local maintenance contractors and for speedy delivery of
spare parts necessarily implies a regional presence. In
their view, supervision may be exercised by experts
based anywhere in the world, who can fly whenever
needed. Similarly, spare parts could be flown in from a
single world-wide base.

quality of

(101) However, this objection of the parties only addresses the
practical aspects of how maintenance supervision and
delivery of spare parts can be organised, and does not
take into account the importance paid by customers to
the
after-sales
local or
organisation. Although it is evident that some level of
centralisation can take place, the need for local presence
remains, since customers will often judge unfavourably
after-sales organisations that would rely entirely on
centralised
the
and
Commission has found evidence that mining customers
may actually pay a significant degree of attention to the

expertise

logistics.

regional

Indeed,

the

local capability of their crushing equipment supplier. In
particular, a Scottish customer explained that Svedala
obtained ‘the bulk of
large quarry business
[its]
[including a primary gyratory crusher]’ because ‘Svedala
has a base in Wiskaw, Scotland (and good people too)’.

that

through

regional

equipment

through
rather

a more
than

in operation. However,

(102) As indicated in recitals 93 and 94, the parties have tried
to demonstrate that, when purchasing large equipment
such as a primary gyratory crusher, customers compare
offers from the main world-wide suppliers and are
willing to travel abroad to visit suppliers and to see the
the
proposed
Commission notes
the majority of mining
customers which indicated that they purchase primary
gyratory crushers have declared that they obtain these
crushers
procurement
a world-wide
procedure,
procurement procedure. In fact, no customer based in
Europe has indicated that it procured primary gyratory
crushers on a wider than EEA-wide basis. In addition,
customers'
the
willingness to travel so as to see a given piece of
equipment in operation does not preclude the regional
dimension of the market. This is mainly because site
visits by customers mainly aim at verifying the
suitability of the products concerned and do not relate
to technical support or after-sales services, while the
regional dimension of procurement is precisely due to
service
the
support or
considerations. The customers' willingness
to travel
abroad to see products in operation can instead be
construed as
the
customers' risk aversion as described in recitals 21 and
22. This clearly shows
the typical purchasing
that
pattern of European mining customers is based on
EEA-wide (or even national) procurement.

an additional demonstration of

importance of

Commission

after-sales

considers

that

the

(103) Furthermore, it appears that, although some customers
might theoretically make do without such a regional
presence (because they manage to do so for their sites
in remote areas where no equipment supplier offers
sufficient support, by constituting local stocks of spare
parts, training their own maintenance and repair people,
etc.), this would not be the case for the vast majority of
mining crusher customers in the EEA. First, it appears
that most of the demand for mining crushers in the
EEA is from either smaller, regional mining companies
(who could not easily develop those competencies in the
short term) or from cement companies and very large
quarries (which are often less used to working in remote
and difficult areas).

(104)

of

the

addition,

results
that even for

Commission's
In
those European
investigation suggest
mining customers with the
capability to manage
without any regional presence from the equipment
entail
supplier,

such capability would

developing

the

L 88/14

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Official Journal of the European Union

25.3.2004

relevant

services directly

therefore usually opt

additional costs and risks which they prefer to avoid, by
obtaining the
from the
equipment manufacturer. In that context, and given that
several equipment suppliers have a substantial presence
in the EEA and therefore offer such support services,
for
customers in the EEA will
those crusher producers able to provide support service
at the regional level. This is further indicated by the fact
that those suppliers without a substantial presence in
the EEA have no (or, in any event, very limited) sales in
that region, although they may have much stronger
positions elsewhere. For instance,
this is the case of
Kobe, which, despite being the world's third largest
supplier of mining jaw crushers, mining cones and
horizontal tumbling mills, has not made any sales in the
EEA over the last three years. In fact, based on the data
provided by the parties, Kobe does not appear to have
made any sales of mining crushers in the EEA since
1990.

(105) Finally, as described above in recitals 21 and 22, the
combination of the long durability, the criticality of rock
crushing machinery, and the limited purchase price of
rock crushers when compared to the overall costs and
revenues of a quarry or aggregate production plant,
appears to make customers very conservative and averse
to risk in their choices. In that context, proximity with
the equipment supplier may be seen as an important
element of comfort and security for the customer.

(106) That obviously does not preclude

the

fact

that
customers may carry out their purchases and contract
negotiations
all
from their head office,
invited to
suppliers world-wide may formally be
customers which
compete. However,
in
procured equipment in such a way indicated that,
practice, the purchase of a rock crusher for use in the
EEA will greatly depend on the presence of effective and
timely support in that area.

even those

and that

S u p p l y - s i d e c o n s i d e r a t i o n s

China. For instance, most customers stated that they did
not know those suppliers, and those customers which
had had some contacts with Russian and Chinese
suppliers indicated that their products were of inferior
standards and performance, and that their spares and
service were unreliable.

(109) That specialisation in a limited number of regions also
appears to hold true for most other crushing machinery
producers. Despite a broader geographic scope of
operations, and with the exception of a very limited
number of
(such as Svedala,
Nordberg, or FL-Smidth-Fuller), it appears from the data
provided by the parties
that most mining crusher
producers are active in a limited number of regions
through
only, and obtain most of
national or regional tenders.

truly global players

their contracts

suppliers

the main mining

(110) This appears to be particularly so in the EEA. For
instance, according to the data provided by the parties,
major mining crusher
such as Kobe (the
world's third largest supplier of mining jaw crushers,
mining cones and horizontal
tumbling mills) and
Kawasaki (the world's second largest supplier of mining
cones) have been unable to sell products in Europe over
the last three years. More generally, it appears from the
data submitted by the parties that the market positions
of
are
substantially different in the EEA from what they may
(even excluding Russian and
be on a global basis
Chinese producers). For instance, in HS impactors, the
parties' combined market share (in terms of units)
between 1997 and 1999 amounts to [20 to 30 %]* in
the EEA,
share
(excluding Russian and Chinese producers) hardly
exceeding [0 to 10 %]*. Similarly; in large jaw crushers,
the parties' combined market share reached [40 to
50 %]* at the EEA level, while it hardly exceeds [15 to
25 %]* world-wide (excluding Russian and Chinese
producers).

compared with a global market

crushing machinery

(107) The regional dimension of competition in the EEA is
further indicated by a number of additional elements.
First,
it appears from the results of the Commission's
the non-European
detailed investigation that most of
mining crusher suppliers as listed by the parties are
unknown or
to most mining
least unfamiliar
customers in the EEA. Some mining customers even
indicated that some of those suppliers were not active
in rock crushing machinery at all.

at

(111)

(108)

In addition,
it appears that most suppliers of mining
crushers do not operate on a global basis, but instead
tend to specialise in certain regions or areas. This is
particularly true for Russian and Chinese suppliers,
which have relatively few sales outside their home
markets and are not considered by the vast majority of
customers to be credible competitors outside Russia and

Finally, a vast majority of competitors indicated that
there were substantial barriers to entry from one region
to another. In particular, the EEA is a limited mining
crusher market, when compared to large mining areas
such as North America or South Africa. For instance,
according to the data submitted by the parties, no more
than [Æ]* primary gyratory crushers are sold each year
are
in the EEA, while
procured annually world-wide (excluding Russia and
China). Similarly,
the EEA
represents on average no more than [0 to 10 %] of total
global demand (once again, excluding Russia and China).
That small market volume, together with the presence

approximately [Æ]* units

in mining HS impactors,

25.3.2004

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Official Journal of the European Union

L 88/15

of already well-established competitors and the level of
proximity and service required by customers, might
deter non-EEA suppliers from incurring the costs and
difficulties necessary for an effective entry into the EEA
mining crusher market, and thus further reduce the
number of credible suppliers to EEA customers.

O t h e r e l e m e n t s

‘mining’

requiring

locally or

rock crusher

This conclusion is supported by both the specificity of
demand in the EEA (and especially by the presence of
customers procuring rock crushing
small
machinery
the presence of
substantial after-market support in the EEA) and the
suppliers on a
organisation of most
regional basis.
In particular, and contrary to the
allegations of the parties, the Commission has found no
evidence of a larger than EEA-wide market for certain
types of mining crushers such as primary gyratory
for the reasons explained above in
crushers:
recital 102, primary gyratory crushers appear to be
purchased and distributed in the EEA essentially in the
same way as other mining crushers.

indeed,

(112) The fact

is

by

by

rock

basis

provided

confirmed

and 99 units

that competition is not organised on a
world-wide
the
further
considerable discrepancies in the global market volume
estimates
crushing machinery
suppliers. For instance, excluding Russian and Chinese
the global market volume estimations for
producers,
1999 as provided by the parties and competitors range
between 40 units
for mining HS
impactors. Similarly, in gyratory crushers, a competitor
believed itself
leader with a
to be the clear market
considerable market share between 1990 and 1996,
while the parties estimate that this competitor did not
represent more than 25 % of sales in that period, and
the results of
the Commission's investigation suggest
that this competitor's market share was probably in the
area of 30 to 35 %. This indicates that suppliers are not
aware of a substantial amount of projects world-wide,
and, by contrast, strongly suggests that a number of
contracts are placed on a narrower basis.

(113)

(114)

those

Finally, it should be noted that rock crushing machinery
for sale in the EEA has to comply with the safety
the European
specifications of Directive 98/37/EC of
Parliament and of the Council of 22 June 1998 on the
approximation of the laws of the Member States relating
to machinery (the Machinery Directive) (8), as amended
by Directive 98/79/EC (9) and in particular has to bear a
‘CE marking’ demonstrating its conformity with that
directive. It has been brought to the attention of the
Commission that non-European manufacturers do not
always meet
today. From that
requirements
viewpoint the Machinery Directive, whilst harmonising
standards in the EEA and facilitating trade between
Member
indirect
consequence of preventing non-European suppliers that
are unable to match its requirements from selling in the
EEA. This would therefore contribute to the existence of
a distinct EEA market for mining crushing machinery.
The parties nonetheless submit
the Community
requirements applicable to rock crushers are of such a
basic nature that it can be expected that all suppliers
operating in different parts of the world are able to
meet those requirements without major difficulty.

States, might

have

also

that

the

In the light of
the
geographic markets for mining crushers are EEA-wide.

is concluded that

the above,

it

(8) OJ L 207, 23.7.1998, p. 1.
(9) OJ L 331, 7.12.1998, p. 1.

VI. COMPETITIVE ASSESSMENT FOR A&C CRUSHERS

sold

crushers

to
and contractors,
companies,

(115) As indicated in recital 32 above, A&C crushers are the
independent
aggregate
smaller
construction and civil
producers
engineering
demolition
specialist
contractors, and cement companies (when they purchase
smaller crushers for the production of aggregates sold to
third parties). They include smaller jaw crushers, smaller
HS impactors, smaller cone crushers, VS impactors and
obviously the ancillary screens, feeders and conveyors.
The operation will lead to the combination of Nordberg
and Svedala, which are the two largest suppliers of A&C
crushers in the EEA and collectively account for [20 to
30 %]* of A&C rock crushers,
largest
competitors being Terex (approximately [5 to 15 %]*
and Krupp (approximately [0 to 10 %]*).

the next

A. A&C crushers other than cone and jaw crushers

(116) As indicated in the Commission's decision to institute
proceedings in this case, there is no indication that the
in the
operation will create competition concerns
markets for impactors, screens, feeders or conveyors.

(117)

impactors,

since Nordberg does not

First, the operation does not raise competition concerns
for
sell VS
impactors in the EEA. Furthermore, although Nordberg
is currently entering VS impactor production through
the introduction of a new range of products, and
although Svedala currently has strong market positions
in certain Member States,
it appears that the merged
entity will remain subject to competition from other
large VS impactor producers (such as Magotteaux or
in the
Canica-Jaques) with a

substantial presence

L 88/16

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Official Journal of the European Union

25.3.2004

States

concerned.

Furthermore,

in HS
Member
impactors, the parties' combined market shares (10) do
not exceed [20 to 30 %]* in any Member State where
overlaps occur, and the merged entity will
remain
subject to the competition from other suppliers such as
Hartl, Kleemann & Reiner, or national players such as
Arja.

(118) Secondly,

in the
the parties have limited positions
markets for screens, feeders and conveyors: according to
the market share figures provided by Metso, the parties
collectively account for less than [10 to 20 %]* of sales
of screens and feeders in the EEA, and they are marginal
suppliers of conveyors. This is also true at the national
level, since the parties' market shares in screens and
feeders would not exceed [20 to 30 %]*, respectively, in
any Member State.

the parties' market shares are relatively less important,
the merged entity's share of sales will be more than
[Æ]* that of its next largest competitor, and it will be
confronted by a substantial number of
local
suppliers such as Comec (the next largest competitor) or
Reiter e Crippa.

small

(122) Furthermore, in the United Kingdom, it should be noted
that the parties' average combined market share in the
period from 1997 to 1999 underestimates the actual
market positions of Nordberg and Svedala, because of
the considerable growth of the parties' shares of sales in
that period.
In particular, although Nordberg and
Svedala only accounted for [20 to 30 %]* of sales in
1997, they represented [40 to 50 %]* of units sold in
1998 and [50 to 60 %]* in 1999. As a result of that
evolution, the merged entity's market position is now
more than twice that of
largest competitor,
Terex [15 to 25 %]*.

its next

B. Cone and jaw crushers

(123)

Market positions of the parties and their competitors

C o n e c r u s h e r s

In most remaining national markets, the operation will
either not create any overlaps or will lead to combined
market shares below [30 to 40 %]* (as in Belgium and
the Netherlands). An intermediate situation exists in
Ireland, where Nordberg and Svedala's combined market
shares reach [40 to 50 %]*, but where Terex and PSP
still
sales
(respectively [30 to 40 %]* for Terex, and [15 to 25 %]*
for PSP).

substantial proportions of

account

for

(119) Nordberg and Svedala are by far

the two largest
suppliers of A&C cone crushers in the EEA (with market
shares of [25 to 35 %]* for Nordberg, and [25 to 35 %]*
largest competitor in the EEA
for Svedala),
being Terex [5 to 15 %]*.

the next

(120)

(121)

it

and

results

Svedala,

inevitably

Insofar as the operation results in the combination of
in
Nordberg
considerable market shares in most EEA Member States,
namely Austria [65 to 75 %]*, Denmark [70 to 80 %]*,
Finland [85 to 95 %]*, France [80 to 90 %]*, Germany
Italy [40 to 50 %]*, Norway [90 to
[45 to 55 %]*,
100 %]*, Portugal [60 to 70 %]*, Spain [65 to 75 %]*,
Sweden [75 to 85 %]*, and the United Kingdom [35 to
45 %]*.

In those Member States, the prevalence of the merged
entity is even more important as the rest of the supply
side is often highly fragmented, and some of
the
remaining competitors may often be local players, only
active in a limited number of Member States. A typical
example of such a situation can be found in Austria,
where the merged entity will have a market share
almost [Æ]* times as high as that of its next largest
competitor Terex [5 to 15 %]*, the rest of demand being
mostly met by local competitors. Even in Italy, where

(10) In view of the low market volumes in most EEA Member States,
market shares for A&C products have been calculated as an
average of units sold between 1997 and 1999.

J a w c r u s h e r s

(124) Nordberg and Svedala are two of the largest suppliers of
A&C jaw crushers
in the EEA [10 to 20 %]* for
the other
Nordberg, and [5 to 15 %]* for Svedala),
largest competitors being Terex [10 to 20 %]* and Extec
[5 to 15 %]*.

(125) The operation will lead to very high cumulated market
shares in Finland [75 to 85 %]*, Norway [60 to 70 %]*,
and Sweden [55 to 65 %]* and Denmark [35 to 45 %]*.
the
In Finland, Norway and Sweden,
largest
is highly fragmented,
supply-side
competitor barely accounting for [10 to 20 %]* of sales.
This is somewhat less so in Denmark, where another
competitor, B(cid:2)hringer, represented [20 to 30 %]* of
sales between 1997 and 1999.

the rest of
the next

(126)

In Portugal, Nordberg and Svedala collectively accounted
for [40 to 50 %] of sales in 1999. However, Svedala's
average sales do not exceed [Æ]* unit per year in that
market (out of a market volume of 13 units). Therefore,
the overlap between the parties is de minimis, and the
operation does not substantially affect the conditions of
competition in that country.

(127) The operation will also create overlaps in a number of
other markets. However, with the exception of Austria,
the parties' combined market shares do not exceed [20
those countries, and they will
to 30 %]* in any of
remain subject to the competition from other market

25.3.2004

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Official Journal of the European Union

L 88/17

players, either global players (such as Terex, Extec or
Parker) or local suppliers (such as Laron). Furthermore,
in Austria, where Nordberg represented [25 to 35 %]*
the operation will only have de
of sales in 1999,
minimis effects,
jaw
crusher in 1999 out of a total market volume of 34
units.

since Svedala only sold [Æ]*

Additional competitive advantages of the parties

(128) The above considerations suggest that the merged entity
will both have considerable market shares and be very
substantially larger than its competitors in most of the
markets concerned. Furthermore,
it appears from the
market investigation that the merged Metso/Svedala will
competitive
benefit
advantages enabling it
to further weaken existing
competitors and raising the barriers to entry in the
markets concerned.

from a number of

additional

H i g h e s t r e p u t a t i o n

(129) First, as indicated in recitals 18 to 21, the durability and
criticality of rock crushing equipment make customers
highly averse to risk, and cause them to opt for secure
implies paying
products and suppliers even if
higher prices. As a customer indicated,
‘quality is the
principal issue with regard to product comparisons. This
is irrespective of type of equipment’.

that

(130)

it

and

first,

Svedala

to note,

and,
almost

suppliers,
are

In that context,
that
is important
customers indicated that they considered performance,
reliability and after-sales services to vary significantly
second,
between the various
that
Nordberg
unanimously
considered to be the rock crusher suppliers with the
highest reputation in the industry. This is reflected in
the results of the Commission's investigation, which in
particular show that Nordberg and Svedala's products
are the clear solutions of choice when it comes to
processing hard or abrasive (and therefore challenging)
rock. Similarly,
from Nordberg
internal documents
indicate that one of its targeted competitive advantages
was to offer the ‘best and most reliable products in the
industry offering more proven advantages to customers
than competing products’, while other documents
indicate that ‘Nordberg products are considered good
and high quality on average’.

to

sites

in the
crushing

turnkey offers
substantial

particular, customers and competitors have pointed out
that the capacity to offer a broad range of equipment is
for
context of
important
green-field
capacity
or
expansion, and also that this enables the rock crushing
after-sales
offer
concerned
supplier
complete
through having one
solutions and to reduce risks
supplier bear
the rock
crushing installation. It was also argued that this allows
the rock crushing supplier to have the best possible
knowledge of its customer's crushing site, and therefore
to be in a position to offer optimal advice and solutions
for improvements, upgrades or capacity expansion. In
the words of Svedala's President and CEO,
‘customers
are seeking suppliers who offer complete solutions’.

responsibility of

the overall

(132)

(133)

all

customer

clearly give

In that context, the fact that Nordberg and Svedala are
considered to be the suppliers with the broadest product
portfolio will
the merged entity an
additional significant competitive advantage. Similarly
with Nordberg, which boasts having a ‘full product line
to cover
in rock size
reduction and classifying’, Svedala's President and CEO
indicated that ‘Svedala is alone in offering a complete
assortment. [Æ]*. Consequently, customers can acquire
a whole line of products and services from a single
supplier, while our competitors can only meet portions
of their overall needs. [Æ]* That means that we have a
very strong platform for the future’.

requirements

In particular, the combination of a high reputation and
a broad product portfolio should make the merged
entity the supplier of choice for new turnkey contracts.
This would especially be so because,
firstly, other
competitors indicated that they depended on the parties
for the supply of certain equipment
(primarily cone
crushers), secondly, most customers have indicated that
Nordberg and Svedala were the only ones able to offer
large turnkey contracts, and, thirdly, third parties stated
that they regard the cone crushers as the ‘competitive
driver’ according to which other purchasing decisions
are made (especially in hard rock crushing conditions,
where the performance of the plant is determined by
that of the cone crusher).

B r o a d p r o d u c t p o r t f o l i o

(131) The merged entity will also be able to derive substantial
In

from its broad product portfolio.

advantages

(134) Turnkey contracts are relatively scarce (they represent
[Æ]* of Nordberg's
crushing
approximately
turnover). However, as indicated in recital 39 above,
they appear to have important
implications for the
conditions of competition: in particular, they have been
reported to create a longstanding relationship between
the equipment supplier and its customer, which, in view

rock

L 88/18

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Official Journal of the European Union

25.3.2004

of the customers' high risk aversion, generally make it
easier for the supplier to win future contracts with the
customer concerned and therefore to further reduce the
competitive pressure from other suppliers.

Kingdom and Irish markets for cone crushers, where
although the parties' next competitor, Terex, has sizeable
positions, its sales of A&C cone crushers in the EEA will
be less than one-seventh of that of the merged entity.

B r o a d g e o g r a p h i c c o v e r a g e

Insufficient competitive constraints from existing competitors

(135) Nordberg and Svedala have unrivalled geographic
coverage in the EEA (and even possibly world-wide).
First, in an industry sensitive to business cycles, this will
help the merged entity both to mitigate business risks
and to be close to customers when it comes to sales and
service.

(136) Secondly, and much more importantly,

this broad
coverage should enable the merged entity to engage in
selective competitive actions against other suppliers with
scope of
a more limited (and sometimes national)
operations. The effects of such behaviour could be all
the more detrimental as, in the A&C sector, a significant
the next
proportion of competitors (and sometimes,
in that
largest supplier after the merged entity)
category. This
in the
Norwegian, Swedish and Italian markets for A&C cone
crushers.

fall
case

instance,

the

for

is,

E c o n o m i e s o f s c a l e

(137) There are indications that size matters in the A&C
sector, since competitors indicated that, in order to be
relatively high
in the A&C sectors,
competitive
quantities had to be sold so as
from
economies of scale.

to benefit

(138)

in the EEA. Given that

In that context,
it should be noted that the merged
entity will become by far the largest producer of A&C
cones (with [60 to 70 %]* of sales), as well as (albeit to
jaw crushers (with [20 to 30 %]* of
a lesser extent)
sales)
largest
competitors to the parties in certain Member States are
much smaller companies, this could enable the merged
entity to engage in targeted competitive actions against
those competitors and further tighten their grip on the
markets concerned.

the next

(139) This could be the case of B(cid:2)hringer, Nordberg and
Svedala's largest competitor in the Danish market for
jaw crushers, who, although representing [20 to 30 %]*
of sales in that country, will have sales volumes equal to
only [0 to 10 %]* of that of the merged entity at the
EEA level. This could also be the case in the United

(140) The

that,

after

above

indicate

considerations

the
operation, smaller competitors with a narrower product
range and scope of operations will not be in a position
to exercise
competitive pressure on the
merged entity. In particular, they will clearly not be in a
position to offer the level of guarantee, reputation and
support that risk averse customers usually require.

sufficient

(141) However, as indicated in recital 37 above,

companies offering a

the rock
crushing industry is also characterised by a continuum
of suppliers, from large, international and broad-range
firms (such as Svedala, Nordberg, Terex or Krupp), to
smaller
limited number of
products in a narrow geographic area (such as Haahjem
Base, selling A&C jaw crushers in the Nordic countries
(Sweden, Finland, Norway, Denmark and Iceland), or
Rodrigo Matias Magalh¼es, only active in Portugal). To
the extent
rock crushing
suppliers are also active in A&C cone and jaw crushers
in the Member States concerned,
is necessary to
examine whether the pressure of those suppliers could
substantially constrain the competitive behaviour of the
merged entity.

the larger

some of

that

it

(142) Four of

those larger companies manufacture cone
crushers and/or jaw crushers. Those are Terex, Krupp,
Parker and Kleemann & Reiner:

lifting,

(a) Terex is a US-based diversified global manufacturer
of
construction
earthmoving and light
equipment for the construction, quarrying, recycling
and mining industries. Terex entered the markets of
A&C crushers in 1999 through the acquisitions of
US-based Cedarapids Inc. and United Kingdom-based
Powerscreen. Terex now offers a full range of A&C
crusher equipment,
including jaw crushers (fixed,
track, mounted and portable) and cone crushers.
Terex sells its products in 60 countries.

(b) Krupp F(cid:2)rdertechnik is a German subsidiary of the
ThyssenKrupp Group and supplies a full range of
crushing equipment. It sells Telsmith-developed cone
crushers on the basis of a license agreement under

25.3.2004

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L 88/19

the Telsmith brand name (which is a large supplier
in the USA).

(c) Parker is a long-established United Kingdom-based
manufacturer of crushing and screening plants.
It
has expanded its product range during the last five
years. It sells a wide range of fixed, track mounted
and portable jaw crushers.
Its product range also
includes a cone crusher. Parker sells across the EEA.

(d) Kleemann & Reiner is a long-established German
company which has expanded significantly in the
1990s. It now sells both jaw and cone crushers in
most EEA Member States.

to design crushing equipment only for hard or for soft
rock applications. However, it has been clearly indicated
by third parties during the market investigation that not
all the products offered are able to crush all hard rock
(material harder than 30 000 pounds per square inch).
In fact, many customers crushing hard rock consider
Nordberg and Svedala as the only suitable suppliers,
since they represent the highest quality in this respect.
In that context,
it is highly questionable whether the
other suppliers, which are already at a disadvantage in
convince
could
terms
conservative customers to change their existing and
satisfactory crushers for products perceived to have a
lower quality.

reputation,

reasonably

of

(143) The results of the Commission's investigation indicate
that the presence of those competitors may be sufficient
to prevent the merged entity from leveraging its market
positions in cone and jaw crushers so as to extend its
dominance into new product areas. This is especially so
because the equipment producers referred to in recital
142 also have relatively broad product portfolios,
sufficient geographic coverage, and excellent reputation
in some market areas.

(148)

(144) However,

the investigation's results also indicate that
those suppliers will not be able to challenge the merged
entity's market position in cone crushers in most EEA
Member States and in jaw crushers in Denmark, Finland,
Norway and Sweden.

(145) First,

advantages;

the merged

shares;
competitive

it is clear from the combination of the parties'
entity's
considerable market
significant
the
additional
importance attached by customers to quality, experience,
after-market service and more generally risk reduction;
and the limited presence and lower reputation of all
other suppliers in the markets concerned, that no other
existing cone or jaw crusher manufacturer would be
able to substantially challenge the merged entity's
competitive position in those markets. This is further
suggested by the fact that most customers could not
name any crusher supplier with an offer competitive
with that of the parties (let alone that of the merged
entity).

(146) Secondly, it appears that the other suppliers may suffer
additional weaknesses when
from a number of
compared to the parties. For instance, cone crushers and
jaw crushers (especially in the Nordic countries) are
often used in hard or abrasive rock conditions. It is true
that most crushers available are able to crush hard and
soft rock and that it would not be economically feasible

(147) Similarly,

are

that

there

strong indications

those
suppliers' distribution networks may be much less
effective than that of Nordberg and Svedala. For
instance, a significant number of customers (such as the
Portuguese
aggregate
companies) indicated that they were not aware of any
supplier but Nordberg and Svedala. Others
other
indicated that those other suppliers they knew did not
have sufficient presence in their country.

association for mining

and

by

the

results

In the light of the above, it is concluded that existing
competitors are not
in a position to substantially
challenge the merged entity's market position, or to
exercise any significant constraint on its competitive
behaviour in the markets concerned. This is also further
confirmed
the Commission's
investigation, since most customers and competitors
indicated that the operation would create a monopoly in
cone crushers, and a significant number of customers in
the Nordic
jaw
countries
crushers. As one customer put it,
‘the alternatives are
few and do not have the in-depth knowledge and
applicable. Choice will be
world-wide
virtually nil’.

expressed concerns

experience

for

of

Insufficient countervailing buying power from customers

(149) There is no indication that A&C customers could have
sufficient market power to constrain the competitive
behaviour of the merged entity. As indicated in recital
35 above, A&C demand is highly fragmented (customers
usually accounting for no more than [Æ]* of Nordberg
or Svedala's sales), customers do not often procure new
equipment and purchases therefore tend to vary from
one year to another. That is further indicated by the fact
that a majority of customers indicated that they had
limited bargaining power and depended on a limited
number of suppliers. Most customers also voiced serious
concerns about the effects of the proposed transaction.

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Insufficient additional competitive constraints

O t h e r t e c h n o l o g i e s

(150) The parties have submitted that there is a degree of
demand side substitutability between the various A&C
crusher markets, especially between VS impactors and
cone crushers. According to the parties, VS impactors
could compete with cone crushers in approximately
30 % of cone crusher applications. They claim that this
substitution is also expected to increase following
technological advances, and therefore to significantly
reduce any market power the merged entity could have
in cone crushers.

(151) The market

support

investigation does not

this
the
reasoning. First, even accepting the argument of
parties, cone crushers would not compete with VS
impactors in 70 % of cases. Secondly, a vast majority of
competitors indicated that
they did not consider VS
impactors (or any other technology) to be sufficient to
constrain the competitive behaviour and the prices of
the merged entity. As one competitor put it,
‘a cone
crusher is a very important machine for the majority of
processing plants. When a cone crusher is needed due
to the crushed material there is no technical alternative,
it can definitely not be replaced by a vertical shaft
impactor, because it is not technically or economically
therefore concluded that alternative
possible’.
It
to constrain the
technologies
the merged
competitive behaviour and the prices of
entity.

is
are not

sufficient

sometimes
business objectives. Used equipment
considered for budgetary reasons in order to complete
crushing work with a limited scope, but even in these
specific cases smaller and cheaper new crushers are
usually preferred instead of second-hand crushers.

is

(154) Furthermore, even those customers who indicated they
were prepared to buy used equipment stated that they
would only do so for relatively new equipment with few
hours of utilisation. Given that customers also indicated
that, used machines were usually very old and outdated,
this further confirms that the presence of a stock of
used equipment may not be sufficient to substantially
constrain the merged entity's competitive behaviour.

(155)

In the light of the above, it is therefore concluded that
used equipment or alternative technologies do not
constitute substantial constraints for new A&C cone and
jaw crushers.

High barriers to entry

(156) There is no indication that the merged entity's market
position in A&C cone and jaw crushers could be
substantially challenged in the short to medium term by
the prospect of new entry.

U s e d e q u i p m e n t

(152) The parties have also submitted that, in addition to new
rock crushing equipment, there is significant trade in
used equipment within the EEA. According to the
parties there are several globally operating suppliers
selling this ‘second-hand equipment’. Used equipment is
also widely advertised.

(157)

(158)

(153) However, as indicated above in recitals 69 to 73 relative
to product market definition, used equipment
is
relatively rarely considered to be an alternative to new
equipment by customers, primarily because of the risks
absence of
(questionable
guarantee, uncertainties about supply of spare parts,
etc.) attached to used products. In addition, especially in
high performance applications, a maximum utilisation
is required and these operations
of
to achieve their
cannot use second-hand equipment

and durability,

the equipment

reliability

First, the conditions of entry cannot be dissociated from
the high risk aversion of customers. In that context, it is
that any new entrant would face
quite apparent
considerable hurdles because it would lack sufficient
reputation and references, and would not be able to
and
guarantee
further
customer
a
strengthened
highly-reputed supplier with a considerable reference list
and customer base.

security of
services. Those barriers will be
the merger

spare parts

supply of

created

after

has

of

the

results

particular,

In
the Commission's
investigation indicate that, in addition to the substantial
investment and efforts linked to the development of
sufficient know-how and production capacity in a new
significant
technology,
any newcomer would face
the
obstacles in convincing risk averse customers of
quality of
it
appears
investigation that
newcomers will often be unable to sell their products
unless they can offer physical demonstration of their
products, test their products under the customers' field
conditions, and provide customers with satisfactory
reference lists. The high costs relative to demonstration
and tests, and the impossibility for new entrants to

its products and services. For instance,

from the Commission's

25.3.2004

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produce reference lists, will all contribute to making
entry very difficult. This is probably even more so in
Denmark, Finland, Norway and Sweden, where rock
crushers often operate in hard/abrasive rock conditions,
and therefore the requirements for reliability and quality,
and the customers' risk aversion, will be even more
important than elsewhere.

and advice

(159) Furthermore, as indicated in recitals 80 to 82 above,
selling in A&C markets requires the presence of an
effective distribution network, with the ability to quickly
and competitively supply spare and wear parts and
It
provide maintenance
to customers.
appears from the Commission's investigation that,
in
view of
the limited amount of multi-brand dealers
available, and of the need for longstanding relationships
between the customers and their distributors, developing
a distribution network would entail substantial financial
investment and, more importantly, would involve a
substantial amount of
time (in the order of several
years). As one competitor indicated, ‘for both after-sales
limited number of
is
and distribution,
experienced dealers available in a specific market, which
are normally bound to a specific producer/brand. Best
access to the customer base is the key to success. To
establish this access, very long contacts and mutual
confidence are required which at
the beginning cost
money and do not create equivalent income.’

there

a

(160) Finally, it appears that, in order to be competitive in the
A&C sectors, relatively high quantities have to be sold
so as to benefit from economies of scale. Approximately
400 to 500 cone crushers, and about 600 to 700 jaw
crushers are supplied each year in the EEA. This would
place any newcomer at a cost-disadvantage in relation
to well-established producers, particularly since the
newcomer would have to offer a complete range of
products of various sizes and performance.

(161) Those risks and costs will even be further increased by
the proposed operation, and in particular because of the
formidable competitive advantages and size of
the
merged entity. Any entrant would have to face a
dominant player with an excellent reputation, a very
broad product portfolio and geographic presence and
considerable sales volumes and customer base. This
would be especially true in Denmark, Finland, Norway
in view of the historic presence of the
and Sweden,
parties in those countries, the specific rock conditions
found there, and the low market volumes to be obtained
in those Member States.

can only for a small

‘potential competitors
entity. As one competitor put it,
[Æ]*
the
influence
extent
behaviour of the merged company, as, [Æ]* regarding
and
[its] distribution network,
after-sales network,
[the
especially regarding [its] products (jaws, cones),
in the
new company will be]
world-wide market and especially very dominating in all
European countries. The production of cone crushers is
economically only possible
are
produced. So every potential competitor will be afraid
of high start-up investment not knowing if he will sell
the critical quantity.’

if high quantities

very dominating

Effects of the operation

in the markets

(163) The above considerations demonstrate that the proposed
transaction will result in the creation of a dominant
for cone crushers and jaw
player
strong
crushers
it will eliminate the main source of
indications that
as
competition
that
insofar
in
competition primarily appeared to result
from the
rivalry between Nordberg and Svedala.

concerned. Furthermore,

those markets,

there are

are
For

equipment

suppliers,
investigation.

(164) The similarity between Nordberg and Svedala, and the
considerable advantages of these two companies over
clear
other
from the
Commission's
instance, most
customers could only quote Nordberg and Svedala
among those suppliers able to competitively offer
turnkey contracts, or to offer products really suitable for
hard rock conditions. Similarly, when asked to name
equipment suppliers with an offer competitive with that
of Nordberg and Svedala, customers either could not
name any such producer, or quoted only a very limited
they suffered from
number, only to explain that
substantial competitive disadvantages as
the
parties.

regards

(165) For

of

stated that
terms
in

‘Nordberg and
instance, customers
quality/
Svedala
similar
are
performance/price etc.’,
‘there is no equivalent on the
overall product range. At this date, we have no visibility
over alternative suppliers with an equivalent offer (in
terms
‘the
alternatives are few and do not have the in-depth
knowledge and world-wide experience applicable.’ As for
their lead in reputation, some customers even stated
that only Nordberg and Svedala did not have to
demonstrate the capacity of their new crushers.

after-sales

services)’,

product

and

of

(162)

In the light of the above, it is concluded that potential
to substantially
competition will not be
the merged
constrain the competitive behaviour of

sufficient

(166) The fact that Nordberg and Svedala are also competing
directly with each other is also clearly reflected in the
results of the Commission's investigation, since a vast
they use both
majority of customers indicated that

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Official Journal of the European Union

25.3.2004

Nordberg and Svedala for most of their supplies, and
several
their
explicitly
procurement policy was based on competition between
those two suppliers.

customers

stated

that

(167) The rivalry between Nordberg and Svedala is also clearly
apparent from Metso's internal documents. [Æ]*.

(168) By eliminating that rivalry,

It

the operation will both
create a virtually unchallenged market player and
remove the main source of competition in the A&C
is therefore no surprise that
markets concerned.
almost all of
the customers who responded to the
Commission's investigation voiced serious concerns as
to the effects of the proposed transaction. Examples of
such statements include ‘the proposed operation will
too dominating actor on the crushing
create a far
‘we will only have one supplier of
equipment market’,
‘we
crushing equipment during the upcoming years’,
‘the
will be deserted to just one manufacturer’, or
big
two
crushing market
manufacturers. It is strongly recommended to deny this
merger to avoid a superpower and extreme dominance
in crushing and processing equipment.’

needs

these

[Æ]*

C. Conclusion

(169)

It is therefore concluded that the operation will create a
dominant position by the merged entity on the markets
for A&C cone crushers in Austria, Denmark, Finland,
France, Germany, Italy, Ireland, Norway, Portugal, Spain,
Sweden and the United Kingdom; it will also create a
dominant position by the merged entity on the markets
for A&C jaw crushers in Denmark, Finland, Norway and
Sweden.

(172) Given the very low volumes of mining crushers sales in
the EEA, the analysis of the market positions of the
different competitors has to be based on market shares
calculated over a sufficiently long period of time, since
sales in just two or three years are too limited to be
significant. Therefore, unless expressly stated otherwise,
the market
for mining crushers are
calculated on the basis of a 10-year period (1990 to
1999).

share figures

A. Products other than high-capacity cones, jaws
and gyratories

(173) There is no indication that the operation will create
competition concerns in the markets for HS impactors,
medium-capacity cone crushers, grinding mills and
roller presses.

(174)

the operation will not create any overlaps in

First,
medium-capacity cone crushers and roller presses.

(175) Secondly, the parties' cumulated market shares in HS
impactors do not exceed [25 to 35 %]*, and the merged
entity will
still be faced with a large number of
competitors, including Hazemag [20 to 30 %]* market
share, SBM [5 to 15 %]* and Krupp [5 to 15 %]*.

(176)

Finally, while the parties have a share of approximately
[25 to 35 %]* of the grinding mill market, they will still
face a significant number of competitors,
including
FL-Smidth-Fuller (approximately [10 to 20 %]* market
share), KHD [5 to 15 %]* and Krupp [5 to 15 %]*.

B. High-capacity cone, jaw and primary gyratory
crushers

VII. COMPETITIVE ASSESSMENT FOR MINING
CRUSHERS

Market positions of the parties and their competitors

(170) As indicated in recital 49, mining crushers are the larger
crushers sold to larger mining companies or aggregate
and cement producers. They include primary gyratory
crushers,
larger cone crusher (up to the high-capacity
cone crushers), larger jaw crusher, larger HS impactors,
as well as grinding mills and roller presses.

the different

(171) With the exception of grinding mills, annual EEA-wide
types of mining crushers are
sales of
typically very low. For instance, based on the data
provided by the parties, only [Æ]* mining jaw crushers
were sold in 1997 and in 1999. Similarly, the EEA-wide
sales of primary gyratory crushers have not exceeded
[Æ]* pieces per year in each year from 1997 to 1999.

H i g h - c a p a c i t y c o n e c r u s h e r s

(177) Nordberg and Svedala are the only rock crusher
suppliers to have sold high-capacity cone crushers in the
EEA over the last 10 years. In particular, Svedala sold
[Æ] H8000 in [Æ]*, while Nordberg supplied [Æ]*
HP800 and [Æ]* ‘enhanced force’ MP800 in [Æ]*.

(178)

Furthermore, the parties have only one competitor at
in high-capacity cone crushers, namely
global
sold any
Kawasaki. However, Kawasaki has never

level

25.3.2004

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Official Journal of the European Union

L 88/23

in Europe. Secondly,

its
high-capacity cone crusher
credibility in high-capacity cone crushers remains highly
questionable,
sales of high
since Kawasaki's global
capacity cone crushers in the last three years are limited
to only [Æ]* KFS2100 crusher, in Japan. It follows that,
even at a global level, the parties had combined market
shares in excess of [85 to 95 %]* for each of the last
three years. The operation would therefore lead to a
virtual monopoly in very large, high capacity cone
crushers.

(179)

In its response to the Statement of Objections, Metso
points out that Kawasaki also supplies the Z18 cone
is a very similar
crusher which, according to Metso,
product
to Svedala's H8000. However, as already
indicated in recital 61, the Z18 cone crusher cannot be
compared with the parties' high capacity cone crushers
because of its significantly lower nominal power rating.

two separate markets,

all other high capacity

(180) The presence of competition concerns would also
remain in the context of the alternative product market
definition for very large cone crushers as submitted by
the parties. Even if the alternative market definition for
very large cone crushers, proposed by the parties, were
used, the competition concerns would remain. In such a
case, the very large cone crusher segment would consist
the first only comprising
of
Nordberg's MP800 and MP1000 products and the
second comprising
cone
crushers. In the first market, Nordberg would obviously
have a global (and a fortiori EEA-wide) monopoly. In the
second market, the parties would be the only companies
to have made sales in the EEA and at global level in the
last three years. In fact, no other company has made a
single sale of a high capacity cone crusher in the EEA in
ten years. The operation would therefore
the last
eliminate any remaining competition in this second
market
strong
Furthermore,
indications that only Svedala (and to a much lesser
extent Kawasaki) would be likely entrants in the first
market (MP800 and MP1000 crushers), because they are
the only cone crusher producers with products with a
size and power approaching that of the MP800 and
MP1000 crushers. The fact that Svedala is viewed as the
most serious potential competitor is also confirmed in
documents submitted to the Commission by Metso,
[Æ]*.

as well.

there

are

and Svedala's cumulated sales accounted for more than
[55 to 65 %]* of the total EEA-wide sales. There are
only two other competitors in the EEA, namely F.L.
Smidth-Fuller [15 to 25 %]*$ market share and Krupp
[10 to 20 %]*.

(183) The merged entity would also be the leading seller of
gyratories world-wide, with
of
compared with
approximately
approximately [15 to 25 %]* for its largest competitor,
F.L. Smidth-Fuller.

a market

40 %]*,

share

[30

to

(184) Furthermore,

there are

indications

those market

that Nordberg's
competitive position is actually stronger than what its
current market shares would suggest. This is so because
shares are based on the sales of
(i)
Nordberg's
(namely the GY and
Morgardshammar ranges); and (ii) Nordberg is currently
introducing a new, state-of-the art technology aimed at
offering a real challenge to Svedala's leading products.

current products

fair

(185) Nordberg's position in primary gyratory crushers has
been traditionally weaker than that of Svedala. However,
Nordberg has recently decided to address that issue by
introducing a new gyratory crusher range expected to
substantially increase Nordberg's position in that sector.
A prototype of
this new crusher range (XP-50) has
already been assembled and demonstrated by Metso at a
recent mining equipment
in the United States.
Metso offered an XP-50 gyratory crusher on [Æ]*
occasions in 2000. On [Æ]* of these occasions, Metso
was not able to sell the XP-50, in particular because it
had not yet been field-tested. Metso, however, has found
an American customer who has accepted to rent an
XP-50 gyratory crusher on a trial basis. At the end of
the testing period (expected to be in [Æ]*),
this
customer will have the option to purchase the XP-50
gyratory crusher.
It appears therefore that the XP-50
technology is almost ready, and that Metso has been
confident enough about
to
several customers. The actual introduction of the XP-50
range in the market will thus most likely occur in 2001.

its reliability to offer it

(181)

In that context, it appears that the operation will result
in the elimination of
the main alternative source of
competition in both very large cone crusher markets,
and therefore will create or strengthen a dominant
position.

P r i m a r y g y r a t o r y c r u s h e r s

(186) Metso apparently centres its primary gyratory strategy

on the new XP-50 range. [Æ]*.

(187) The aim of Metso, with the introduction of the XP-50
primary gyratory range, is clearly to gain market share
from F.L. Smidth-Fuller and Kawasaki. It is noteworthy
that just the abovementioned try-buy sale of an XP-50
crusher to an American customer will increase Metso's
worldwide market share by approximately [0 to 10 %]*.

(182) The total sales of primary gyratory crushers in the EEA
are extremely limited (18 units in ten years). However,
over the 10-year period between 1990 and 1999, Metso

(188)

It follows that the effect of the proposed transaction will
the operation will eliminate the
be twofold:

first,

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Official Journal of the European Union

25.3.2004

competition between Metso's and Svedala's current
product ranges, which collectively account for [55 to
65 %]* of sales in the EEA. Secondly, and even more
importantly, it will combine Svedala's leading crushers
with Nordberg's new and promising XP-50 technology,
which is anticipated to become more successful than
Nordberg's current product ranges. If, as seems likely,
the XP-50 range proves successful and Metso reaches its
target of overtaking F.L-Smidth-Fuller and Kawasaki, the
parties will have a cumulated share of
the primary
[40 to 55 %]* worldwide and
gyratory market of
approximately [65 to 75 %]* in the EEA by 2002. This
implies that, in the longer term, the introduction of the
XP-50 technology combined with Svedala's
leading
range of products would probably make the merged
entity's competitive position stronger than what
the
immediate combination of Svedala and Nordberg's GY
and Morgardshammar ranges suggest.

J a w c r u s h e r s

(189)

In the market for jaw crushers, the operation would lead
[35 to 45 %]* for
to a combined market share of
mining jaw crushers. Furthermore,
largest
competitors, Laron [15 to 25 %]* market share, Krupp
[10 to 20 %]* market share) and PSP [5 to 15 %]* would
have much lower market positions in the EEA. The
parties would therefore have a significant and leading
position in the European market.

the next

Additional competitive advantages of the parties

(190) The above considerations suggest that the merged entity
(and a fortiori EEA-wide)
will have a virtually global
monopoly in high-capacity cone crushers, and that the
merged entity will have considerable market shares in
both the primary gyratory and jaw crusher markets,
where it will be very substantially larger than its next
largest competitors.

(191)

Furthermore,
it appears from the market investigation
that the merged entity will benefit from a number of
additional competitive advantages making it even more
difficult for other suppliers and/or entrants to challenge
its market position.

be very cautious to purchase only from suppliers with a
proven track-record, even if that implies a higher price.
This is especially true for purchases of large, essential
equipment such as a high capacity cone crusher, a large
jaw crusher or a gyratory crusher, since the break down
or the failure to operate properly of such equipment
would put the entire production of the mine or quarry
at risk. In that context, it is important to note that the
vast majority of mining customers indicated reliability
and quality among the key strengths of the parties.

(193) Mining customers do not only want reliable products,
they are also very eager that their supplier will not
disappear before the end of the operating life of the
purchased equipment. Being the clear industry leaders,
the parties are seen as financially more solid than many
therefore be
of
preferred by risk-averse customers.

smaller competitors and will

their

(194) Several mining customers also appear to consider that
the parties' ability to offer a broad range of equipment
is a significant competitive advantage. Having a broad
range of equipment on offer is important in particular
because mining customers are usually large companies
that operate mining sites in different locations, and with
different geological/physical characteristics. Only crusher
producers with a complete range of products will be
able to make suitable offers for each of the sites of the
customer. Such producers will have the possibility to
become ‘core’ suppliers and will have improved chances
of winning
customer.
Furthermore, the parties' broad product portfolio means
that they are more likely than their competitors to be
requested by a potential customer to bid for the supply
of crushing machinery. This increases the frequency of
the
customers
contacts
understanding of
the
their needs.
experience gained from the sale of a particular product
can then be used to make an appropriate and targeted
offer of other products
the same mining or
quarrying site.

improves
In particular,

tenders organised

with

and

the

for

by

(195) Finally, the wide geographic coverage of the parties is
clearly an additional advantage when serving mining
customers, many of which are multinationals operating
on different continents.

(192) Performance,

reliability and quality are determining
factors for customers wishing to procure new rock
crushing machinery. The Commission's
investigation
shows that mining customers are extremely sensitive to
these factors. Moreover, given that they operate in harsh
conditions and that
their production is
the value of
usually significantly higher than the costs involved in
the crushing process, mining customers will avoid
taking any risk in the choice of their suppliers and will

(196)

Insufficient competitive constraints from existing competitors

In the market
for very large, high capacity cone
crushers, the combined entity would face virtually no
remaining
the
other

competitor

EEA.

The

in

25.3.2004

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competition will
parties' behaviour in this market.

therefore obviously not restrain the

(201)

(197) As regards the markets for jaw crushers and primary
gyratory crushers, the combined entity would have a
market share approximately two to three times that of
each of its main competitors in the EEA, PSP, Krupp
and F.L-Smidth Fuller. The mere difference in market
shares means that PSP, Krupp and F.L-Smidth Fuller will
not be in a position significantly to constrain the
parties' competitive behaviour. Furthermore, in its own
view, F.L-Smidth Fuller does not have a very strong
commercial presence in Europe. F.L-Smidth Fuller's
focus is essentially on very large mining customers,
especially in the USA and South America, whereas a
in
significant
Europe corresponds to sales to large aggregate quarries,
which F.L-Smidth Fuller considers as a different type of
business.
In addition, F.L-Smidth Fuller has a much
more limited range of products than the parties, since it
does not manufacture cone crushers nor impactors.

the mining crusher market

share of

(198) As regards the market

for mining jaw crushers,

the
parties' main competitors, except Krupp, are small
companies, often active in limited areas. For instance,
PSP has a total annual turnover of approximately EUR
50 million, whereas Laron, considered by the parties as
‘the leading mining jaw crusher supplier in the EEA in
1999’, has not sold any mining jaw crusher outside
Spain in the last three years.

it

the

the parties,

the production of

the same time argue that

its mining jaw crusher production,

In its response to the Statement of Objections, Metso
has expressed the view that economies of scale resulting
from the merger would not be significant, because a
substantial proportion of the production of mining jaw
crushers is outsourced. Furthermore, the parties believe
that they could actually be at a cost disadvantage when
compared to smaller,
integrated competitors,
less
because they have higher fixed costs. These arguments,
however, can not be accepted by the Commission. First,
If Metso outsources a
they are largely contradictory.
it
large part of
cannot at
is at a cost
disadvantage because it is vertically integrated with its
foundries. Secondly, it is clear that outsourcing does not
reduce economies of scale: the higher the volume of
sales, the easier it is for the subcontractor to cover its
fixed costs, a large share of which corresponds to
that are specifically
equipment such as moulds, etc.
required for
components
purchased by the parties. Therefore, the higher the sales
of
the price charged by the
subcontractor will be. Thus, economies of scale benefit
the parties in the same way, whether fixed costs are
supported directly, or
through the price
charged by subcontractors. Furthermore, higher volumes
may also translate
in higher procurement power
vis-(cid:3)-vis subcontractors, and therefore in lower supply
costs for the components which the parties outsource.
Similarly, and for the same reasons,
it is artificial to
consider that higher fixed costs resulting from vertical
integration with in-house foundries would create a
competitive
smaller
competitors can not afford to have an in-house foundry
precisely because they do not benefit from the high
sales volumes of the parties. Furthermore, an in-house
foundry produces castings for all types of crushers, and
not just for mining jaw crushers, and the corresponding
fixed costs can thus be spread across the entire crushing
equipment production of the parties. The Commission
thus maintains its conclusion that the operation would
result in significant economies of scale for the merged
entity.

the parties:

disadvantage

the lower

indirectly,

for

(199) Moreover, the parties will be able to leverage their very
in other key crushing equipment
strong positions
markets such as cone crushers (A&C size as well as
high-capacity cone crushers) and gyratory crushers to
conduct targeted, anti-competitive actions against Krupp
or other competitors trying to challenge their position
in the jaw crusher or primary gyratory crusher markets.
In that respect, it should be noted that, although Krupp
in the EEA of
is
leading supplier
medium-capacity mining
it would
certainly not be difficult for the parties to enter this
market by
‘scaled-down’
versions of
existing and commercially very
successful high capacity cone crushers.

developing
their

currently the

and offering

crushers,

cone

(202)

It can thus be concluded that no competitor will be in a
position to significantly challenge the parties' position in
the markets for high-capacity cone crushers, for mining
jaw crushers and for gyratory crushers.

Insufficient countervailing buying power from customers

(200) Finally, the parties' competitors in jaw crushers (namely
Laron, Krupp and PSP) appear to suffer from significant
cost-disadvantages when compared with the parties. In
particular, since the merged entity's overall production
of mining jaw crushers will be two to three times larger
than that of its main competitors, it will benefit from
significant economies of scale.

(203) High capacity cone crusher customers will obviously not
be in a position to exercise any significant degree of
the parties'
countervailing power which would limit
Indeed, customers will be left with
market power.

L 88/26

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Official Journal of the European Union

25.3.2004

choice
virtually no other
high-capacity cone crushers from the merged entity.

than to purchase

their

markets, with the ability to raise prices in both markets
simultaneously.

power

the parties'

(204) Furthermore, even for primary gyratory crushers and
there is no indication that customers
jaw crushers,
would
to
countervailing
sufficient
have
substantially constrain the competitive behaviour of the
merged entity. Customers in the EEA usually account for
a relatively low share of
turnover. For
instance,
Svedala's main European customer only
represents [Æ]* of Svedala's sales of gyratory crushers
world-wide, while Nordberg's main European customer
for jaw crushers only accounts for [Æ]* of Nordberg's
overall mining jaw sales. In addition, primary gyratory
crushers, jaw crushers and cone crushers are considered
as an essential equipment
in any mining company's
crushing plant, so that customers will usually opt for
safe
than turn to
less-reputed suppliers unable to satisfactorily guarantee
reliability and security of after-sales services and spare
part supplies, even if
implies accepting higher
prices.

and proven solutions

rather

that

No substitute products

(205)

a

has

degree

certain

been argued

It
of
that
substitutability may exist between gyratory crushers and
large mining jaw crushers. However, the parties have
indicated that jaw crushers cost in the region of EUR
40 000 to EUR 600 000 and have a typical capacity
range of 20 to 1 500 tonnes/hour, whereas a primary
gyratory crusher costs in the region of EUR 1 million to
EUR 2 million and has a typical capacity range of 1 000
to 5 000 tonnes/hour. It appears therefore that for high
volume primary crushing applications (typically over
2 000 tonnes/hour), only gyratory crushers are suitable.
Furthermore,
the price differences between the two
types of equipment clearly show that customers do not
view them as economically substitutable. Therefore,
it
can be concluded that demand side substitution between
and large mining jaw
primary gyratory crushers
the parties from
crushers is insufficient
obtaining a dominant position in the gyratory crusher
market.

to prevent

(207) The parties have submitted that the purchase of two
smaller cone crushers could be considered as an
alternative to one high capacity crusher. However, as
indicated in recitals 70 to 73, this is generally not a
credible and economical option.

(208) Therefore,

it can be concluded that there are no real
substitutes for gyratory crushers and for very large high
capacity mining cones.

(209) The parties have also submitted that, in addition to new
rock crushing equipment, there is significant trade in
used equipment within the EEA. According to the
parties there are several, globally operating suppliers
selling this ‘second hand equipment’. Used equipment is
also widely advertised.

(210) On the basis of

the market

there is a separate market
the same reasons as

investigation it may be
for used
concluded that
equipment. For
in the A&C
markets, the existence of used equipment can not be
taken into account as a real competitive constraint when
analysing the parties' market position.
It should be
noted that ‘old’ used equipment will normally not be
considered by mining customers who are extremely
sensitive to risks, and that ‘recent’ (i.e. less than a few
years old) used mining crushers are hardly available at
all. In particular, a mining customer stated that it once
‘installed a used gyratory primary owing to cost
constraints’ and that it turned out to be ‘a big mistake’
so that it had eventually to buy a new crusher.

(211)

In the light of the above, it is therefore concluded that
used equipment or alternative technologies do not
constitute
parties'
competitive behaviour in the high capacity cone crusher
market and in the primary gyratory crusher market.

constraints

substantial

the

to

High barriers to entry

(206) Moreover, the parties' combined strength in the mining
jaw and primary gyratory crushers markets means that
they will be the supplier of reference for all mining
equipment used in primary crushing applications,
whether the customer chooses a jaw or a gyratory
crusher. The limited degree of substitutability between
jaw crushers and gyratory crushers will
therefore be
even more reduced after the operation, since the merged
these
entity will be the dominant player in each of

(212) There is no indication that the merged entity's market
position in high capacity cones and primary gyratory
crushers could be substantially challenged in the short
to medium term by the prospect of new entry.

(213) Barriers to entry in the high capacity cone crusher
market are high, due to the investments and technology
required: some competitors have indicated that it would
take up to five years to develop and market a very large

25.3.2004

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L 88/27

high capacity cone crusher. Furthermore, given the very
limited volume of the global sales of very large, high
capacity cone crushers,
it is highly unlikely that new
competitors will attempt to enter this market segment.
Indeed, besides the parties, the only other player in this
market, Kawasaki, has not been particularly successful,
since it has not captured more than [5 to 15 %]* of the
world-wide sales, and has not made a single sale in
Europe in the last three years.

(214) The operation will remove Nordberg's only significant
competitor in the high capacity cone crusher market,
and probably the only one with sufficient technological
and financial resources to successfully expand its sales of
very large cone crushers.
In this respect, an internal
strategy document of Metso dated 1 August 1999 states
the following: [Æ]*.

(215) New entry in the primary gyratory market

by

that

third

it would

is also
extremely unlikely, because of the very limited volume
of sales, both at European and global level: over the last
the annual world-wide sales of gyratory
three years,
It has been
crushers have not exceeded 30 units.
indicated
take
parties
approximately five years for a new entrant to design,
install and test a new gyratory crusher.
manufacture,
Because of
the
the
development costs and the investment
that a new
entrant would have to incur cannot be recovered in a
reasonable period of time. Entry would be even more
difficult now that Nordberg has just introduced the new
XP-50 range of modern and apparently effective
primary gyratory crushers, described in Nordberg's
documents as [Æ]*.

limited size of

this market,

jaw crusher market,

(216) Moreover, new entry from competitors active outside
the EEA does not represent a credible threat
to the
parties' position in the gyratory crusher and jaw crusher
markets: besides Chinese and Russian manufacturers,
which have a very limited commercial presence outside
their domestic areas, the only significant competitors of
the parties at global level in the gyratory crusher market
are Kobe, Kawasaki, F.L. Smidth-Fuller and Krupp. In the
mining
parties' main
level are Kobe and Terex, with
competitors at global
world-wide market shares of less than [0 to 10 %]*. F.L
Smidth-Fuller and Krupp are already active in the
European gyratory crusher market, and can therefore
not be considered as potential
‘new entrants’. Among
the global competitors in the gyratory crusher market,
only Kobe and Kawasaki, which have not made any
sales of mining crushers in the EEA between 1990 and
1999, could possibly be considered as potential new
entrants. However, at global level, Kobe's and Kawasaki's
presence in the gyratory crusher market is very limited.

the

According to the parties' estimate, Kobe's world-wide
market share (11)
is approximately [5 to 15 %]* and
Kawasaki's market share is approximately [0 to 10 %]*,
whilst the parties would have an estimated world-wide
market share of [30 to 40 %]* following the merger.
Similarly, Kobe and Terex have not sold any mining jaw
crusher in Europe between 1990 and 1999 and only
have modest shares of the worldwide sales of mining
jaw crushers.
and
customers view Kobe and Kawasaki as players essentially
active in the Asia-Pacific region, rather than as global
It is therefore clear that Kobe, Kawasaki
competitors.
and Terex do not represent a serious threat
to the
parties' position in the EEA-wide jaw and gyratory
crusher markets.

Furthermore, most

competitors

size of

the products and the critical

(217) Entering the markets for high capacity cone crushers or
primary gyratory crushers would entail significant risks,
the
which are unlikely to be rewarded, because of
limited
the
Furthermore,
these markets.
characteristics of these markets, and in particular the
impact a
durability of
breakdown can have on the customer's operation, mean
that a new entrant would have to face particularly high
barriers. Since customers are extremely sensitive to
reliability, any new entrant would have to establish that
its products are of at least as good quality as those of
the parties. The risk aversion of mining customers
means that
to
purchase from a new entrant, unless it has been able to
its products during a
the quality of
demonstrate
sufficiently long period of
time. Therefore, a new
entrant would have to spend a considerable amount of
time and resources demonstrating its new products
before it can make any sales. This would further reduce
the profitability of entering the high capacity cone
crusher market and/or the primary gyratory market.

they will probably be very reluctant

(218) Moreover, new entrants would face an additional barrier
since, in the EEA, the parties have the largest share of
the installed base of primary gyratory crushers and
almost the entirety of the high capacity cone crushers
installed base. These strong installed bases mean that,
due to the importance of after-sales services, the parties
will retain a privileged access to the main European
mining customers.

(219)

they consider

In their response to the Statement of Objections, the
parties indicated that
that barriers to
entry into the market for mining jaw crushers are low.
In their response, the parties referred to Extec, a United
Kingdom company which ‘has introduced a mobile jaw
product from scratch in 1996 and now has full range of
mobile A&C jaw crushers which it sells across the EEA’.
However, Extec can not be considered as a new entrant

(11) Excluding Chinese and Russian producers.

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Official Journal of the European Union

25.3.2004

in the mining jaw crusher market. Mobile A&C jaw
crushers are significantly smaller
than mining jaw
crushers (which are always fixed) and belong to the
A&C jaw crusher market, which is different from the
mining jaw crusher market. Extec has never sold a
mining jaw crusher. The parties have not produced any
other evidence of recent and successful entry into this
market.

C. Conclusion

(225)

In the light of the above, it is therefore concluded that
the operation will create or strengthen a dominant
for
position by the merged entity on the markets
primary gyratory crushers in the EEA, mining jaw
crushers in the EEA, and high-capacity mining cone
crushers in the EEA.

(220) Furthermore,

the total demand in the EEA-wide and
worldwide for mining jaw crushers is extremely small
when compared with other
types of rock crushing
equipment. In recent years, the average annual demand
for mining jaw crushers was [Æ]* in the EEA, and
approximately 50 worldwide, whereas the demand for
A&C jaw crushers was above 600 pieces a year, just in
the EEA. This explains why ‘new entrants’ such as Extec
have targeted the A&C jaw crusher market, and have
actually avoided entering the mining jaw crusher
market. Therefore, and for the same reasons as indicated
in recitals 213 to 217 concerning entry into the primary
gyratory market or into the high capacity cone crusher
market, new entry into the mining jaw crusher market
is extremely unlikely given its limited size (EEA-wide
and world wide) and because of
the extreme risk
aversion of mining customers.

VIII. COMMITMENTS SUBMITTED BY METSO

(226) On 13 December 2000,

the parties offered certain
commitments
to remove the competition concerns
which the Commission had identified in its Statement of
Objections. Those commitments have been subsequently
amended by the parties taking into account certain
adjustments required by the Commission in view of, in
particular, the results of the market test. The full text of
the final commitments is set out in the Annex II.

A. Summary of the commitments

(221) Finally,

the above risks and costs will be further
increased by the proposed operation,
the same
reasons as in the case of the A&C markets. Any entrant
would have to face a dominant player with an excellent
reputation,
broad product portfolio and
geographic presence and considerable sales volumes and
customer base.

very

for

a

(222)

In the light of the above, it is concluded that potential
to substantially
competition will not be
the merged
constrain the competitive behaviour of
entity.

sufficient

Effects of the operation

(223)

it

the above,

is concluded that

the
In the light of
merged entity will be able to act independently of its
competitors and suppliers
for high
capacity cone crushers,
jaw crushers and primary
gyratory crushers, and that its competitive position will
not be sufficiently constrained by the prospects of
potential entry.

in the markets

(224) The market position of the merged entity will be even
stronger since, as indicated in recitals 190 to 195, it will
from a number of competitive advantages in
benefit
addition to its sheer size. Those are, particular,
the
reputation and geographic coverage in the
highest
industry and an unrivalled product portfolio.

(227) The commitments offered by the parties consist of the
divestment of three subsidiaries of Svedala active in the
R&D,
crushing
equipment, the divestment of Nordberg's GY range of
primary gyratory crushers, and the divestment of certain
distribution assets of Svedala in the EEA.

engineering

production

and

of

(228) More specifically, the commitments include:

— the divestment of Svedala — Arbra AB (SAAB), a
wholly-owned subsidiary of Svedala where
all
Hydrocone
Svedala's
crushers
H8000 high-capacity mining cone crusher) are
produced and where Jawmaster jaw crushers are
manufactured,

(including

cone

— the

of

Svedala

divestment

a
SA (SAA),
wholly-owned subsidiary of Svedala where
all
Eurocone cone crushers are produced, and where
feeders, conveyors,
certain HS impactors, screens,
and mobile
are
products
of
manufactured. SAA also has an engineering facility
at Clichy (France),

versions

those

— the divestment of Svedala Mobile Equipment AB
(SMEAB), a wholly-owned subsidiary of Svedala
where the mobile versions of
the Jawmaster jaw
crushers and the Hydrocone cone crushers are
produced, and where mobile screens and mobile
feeders are also manufactured,

— the

and
divestment
Morgardshammar
gyratory
crushers, and of Nordberg's new prototype XP-50
technology,

of
ranges

Nordberg's

primary

GY

of

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Official Journal of the European Union

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— the transfer of key personnel and assets relative to
the distribution of Svedala's products in Austria,
Belgium, Denmark, Finland, France, Germany, Italy,
Ireland, Netherlands, Norway, Spain, Sweden and
the United Kingdom,

— the assignment of Svedala's distribution contract

with a third party in Portugal.

Primary gyratory crushers

(233) The proposed commitments also include the divestment
of all of Nordberg's product lines in gyratory crushers,
namely the existing GY and Morg(cid:4)rdshammar range of
primary gyratory crushers currently sold by Nordberg;
and Nordberg's new XP-50 technology, which has not
been sold yet but is expected to become an essential
part of Nordberg's strategy in gyratory crushers [Æ]*.

(229) The divestment of each of SAAB, SAA, SMEAB and
Nordberg's
range of primary gyratory crushers will
include all relevant intellectual property rights, fittings,
stocks of parts, as well as rights to supply contracts,
personnel and sale contract owned. They will also
include the transfer of the lease contracts of Svedala for
all land and buildings making up the facilities of SAAB
and SMEAB (which are not owned by Svedala).

(234)

B. Assessment of the commitments

Cones and jaw crushers

(230) The commitments submitted by the parties will lead to
the divestment of all of Svedala's products in cone
crushers and jaw crushers, and will therefore completely
eliminate the product overlap between Nordberg and
Svedala in those sectors.

existing

business

acquires Metso's

In order to remove competition concerns in this case
the full overlap needs to be eliminated. Metso's original
proposal to licence the new XP technology would have
the
created a situation whereby the purchaser of
divested
(and
outdated) products plus a licence for a product which is
not yet completely developed, while the merged entity
would comprise both Svedala's
leading range of
products and Metso's new technology. There are serious
the
risks that,
a viable
divested business
could not operate
competitive force in the market. For
the
purchaser, as a licensee, would suffer from a weaker
reputation than the merged entity being the licensor and
clear market
the purchaser may in
such a situation even decide not to invest in the final
development of the XP technology, because it would
fear not to have a sufficient customer base to recoup
that investment.

the purchaser of
as
instance,

in such a situation,

leader. Secondly,

(231) Furthermore,

it appears that

the divestment package
includes sufficient assets, personnel and rights for the
purchasers of the divested businesses to operate as a
viable competitive force on the markets concerned. In
should be noted that
particular,
the proposed
it
commitments
Svedala's production
all of
include
facilities for cone crushers, as well as extensive R&D,
engineering and distribution assets and personnel.

in Brazil

(232) Similarly, although the proposed commitments do not
jaw
include all of Svedala's production facilities for
crushers, since Svedala's plant
(where most
Jawmaster jaw crushers are produced) is left out of the
divestment package, it appears from the data submitted
by the parties that this production could be taken on at
the Svedala plant in Sweden. This is so because the
plant at Svedala continues to produce Jawmasters and
therefore has machines, tools and know-how in that
sector, and because that plant is currently under-utilised
and has
the
production currently made in Brazil. During the interim
period before the Svedala plant can fully take on the
product currently made in Brazil,
the parties also
undertake to manufacture under licence the Jawmaster
the divested
crushers requested by the purchaser of
business.

to accommodate

sufficient

capacity

(235) Furthermore,

it appears that

the divestment package
includes sufficient assets, personnel and rights for the
purchasers of the divested businesses to operate as a
viable competitive force on the markets concerned. In
particular, although the commitments do not include
production facilities or personnel dedicated to those
products, this does not seem necessary in the present
case.
Indeed, according to the data submitted by the
parties, Nordberg does not have manufacturing assets or
personnel dedicated to the production of gyratory
crushers, because demand for those products is too
infrequent to make such an approach economic. Instead,
it appears that components are sub-contracted out to
the gyratory crusher is then
third parties, and that
usually assembled at the customer's premises.

crushers,

(236) Furthermore, although the divestment will not include
that personnel directly involved in the manufacturing,
engineering or R&D relative to Nordberg's primary
gyratory
Svedala
personnel currently engaged in the R&D, engineering
and manufacture of Svedala's range of gyratory crushers.
Based on the data provided by the parties,
it appears
that that personnel could support the development and
manufacture of Nordberg's range of primary gyratory
crushers, since the underlying technology of Svedala's

they will

include

the

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Official Journal of the European Union

25.3.2004

In
and Nordberg's products is essentially the same.
particular, with respect to the XP-50 technology, the
purchaser of the divested business will both be able to
attend at Metso's factory in the United States so as to
obtain a full transfer of that technology, and also to
receive all data relating to the testing of that technology
currently being achieved at a customer's premises in the
United States.

Conclusion

(237)

In the light of the above, the Commission concludes
that the commitments given by the Parties are sufficient
to remove the competition concerns identified by the
the proposed
Commission during its investigation of
operation.

IX. CONCLUSION

(238)

set out

in Annex II,

In the light of the above, and subject to compliance
with the commitments
the
proposed operation does not create or strengthen a
dominant position as a result of which effective
competition would be significantly impeded in the EEA
or in a substantial part of it. The operation is therefore
to be declared compatible with the common market and
the functioning of
to
Article 8(2) of the Merger Regulation.

the EEA agreement, pursuant

HAS ADOPTED THIS DECISION:

Article 1

The notified operation whereby Metso Corporation acquires
Svedala Industri AB is hereby declared compatible with the
common market and the functioning of the EEA Agreement,
on condition that the commitments set out in Annex II are
fully complied with.

Article 2

This Decision is addressed to:

Metso Corporation
Fabianinkatu 9A
PO Box 220
FIN-00101 Helsinki.

Done at Brussels, 24 January 2001.

For the Commission

Mario MONTI

Member of the Commission

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The original text may be consulted on the following Commission website:

http://europa.eu.int/comm/competition/index_en.html

ANNEX I

ANNEX II

The full original text of the conditions and obligations referred to in Articles 1 and 2 may be consulted on the
following Commission website:

http://europa.eu.int/comm/competition/index_en.html