MRTPC to probe cartel
|
Notices issued to cement companies
|
The country’s anti-monopoly watchdog MRTPC has issued notices to 14 cement firms , after its investigative arm, the Director General of Investigations and Registration, pointed toward cartelisation.
The DGIR, in its 30-page report submitted to the Monopolies and Restrictive Trade Practices Commission (MRTPC), said that industry body Cement Manufacturers’ Association (CMA) was instrumental in fixing prices in the sector.
“Cement manufacturing companies have got the forum of CMA to meet and discuss marketing strategies, including prices, so as to increase the prices without any fear of competition from other members of CMA,” DGIR said in its preliminary investigation report.
Admitting the report, MRTPC issued notice of enquiry to 14 companies, asking them to file replies within four weeks.
The companies include ACC, Binani Industries, Birla Corporation, Dalmia Cement, Grasim Industries, Gujarat Ambuja, JK Cement, Indian Cement Ltd, NCL Industries, OCL Industries, Saurashtra Cement, Ultratech and Zuari Cement.
MRTPC’s action is among a series of measures taken by the Government and the Commission to rein in cement prices. DGIR analysed prices of 2005-06 and found that cost of raw material such as limestone and bauxite rose marginally. But “due to exorbitant increase in price of cement during 2005-06 and marginal increase in cost of production, the cement companies have been able to earn maximum profits.”
“Even those cement companies which had incurred losses during the last couple of years made profits during the year 2005-06.”
The DGIR said companies were in a position to decide the terms and condition of sale of cement, including the increase in prices per bag of cement at the retail level, during the course of meeting of the CMA marketing committee.
According to the report, even the CMA said in its annual report of 2005-06 that the cost of production of cement increased by Rs. 6.81 per bag of 50 kg and that the industry charged higher than that.
“The increase in price as compared to increase in the cost of production is disproportionate... since the price of cement has been increased by the respondents (cement companies) without taking into consideration the quantum of increase in cost of production, they made huge profits during 2005-06,” the report said.
Cement companies contended that the price was demand driven and that they had no control or influence over it. Some producers contended that their input cost during 2005-06 escalated due to increase in prices of diesel and coal and revised wage agreement.
Cement producers declined to comment on the DGIR’s investigation report, saying that they had not received any notice.
“Unless we get a notice and read it, we cannot comment,” JK Cement Group Executive President R.G. Bagla said. He, however, added “as far as cartelisation is concerned it is simply not possible because there are 53 big companies, of which 15 to 20 companies are competing with each other.” — PTI
Printer friendly
page
Send this article to Friends by
E-Mail
Property Plus
Bangalore
Chennai
Hyderabad
Kochi
Thiruvananthapuram
