JOHANNESBURG (Reuters) - ArcelorMittal's South African unit ACLJ.J has agreed to pay a record 1.5 billion rand ($110 million) fine for colluding to fix steel prices, the competition watchdog said on Monday.

Workers stand near the logo of ArcelorMittal, the world's largest producer of steel, at the steel plant in Ghent, Belgium, July 7, 2016. REUTERS/Francois Lenoir - RTSHL7F

The Competition Commission launched an investigation in 2008 after concerns were raised that steel mills had been charging import parity prices, or prices that consumers would pay if they imported the commodity, since 2002.

The South African steel industry, which includes state-controlled Scaw Metals, produces enough steel to meet local demand.

The settlement, to be paid in five annual instalments of no less than 300 million rand, and includes a year-long 10 percent cap in EBIT margin, will pile more pressure on a company facing falling demand, cheap imports and higher costs.

“The penalty sends a strong message of deterrence and is an important milestone in the Commission’s enforcement against cartels,” Commissioner Tembinkosi Bonakele said. The fine is a record for anti-competitive behavior in South Africa.

Steel companies around the world are grappling with a global supply glut that has sent producers’ share prices to their lowest levels in more than a decade.

By 0916 GMT, the stock was down 0.78 percent at 7.72 rand, reversing earlier gains of as much as 2 percent.

Its shares fell more than 80 percent last year, but have risen more than 65 percent since the beginning of the year on the government’s move to impose tariffs on imported steel and the company’s cost-cutting plan.

ArcelorMittal South Africa, which has not made a profit in half a decade, also agreed to 4.6 billion rand in capital expenditure over five years as part of the settlement, the Commission said.

The company, which raised 4.5 billion rand via a rights issue in February, admitted that it fixed prices of some steel products and shared commercially sensitive information with competitors.

It said in a statement no interest will be levied on the administrative penalty for the first 18 months in light of the vulnerable state of the steel industry and the position of the company.