An old Monopolies and Restrictive Trade Practices Commission (MRTPC) case involving the cement industry has returned to haunt the latter.
MUMBAI: An old Monopolies and Restrictive Trade Practices Commission (MRTPC) case involving the cement industry has returned to haunt the latter.
After 17 years of litigation, the MRTPC has ruled that 44 cement companies are guilty of cartelisation under the aegis of the Cement Manufacturers’ Association (CMA).
The alleged culprits range from L&T Cement (the owners have since changed and it is now known as UltraTech Cement), ACC, Century Textiles, Madras Cement and Dalmia Cement.
“It (the case) is not about cartelisation, but about a price hike in cement prices in 1990,” said T S Raghupathy, senior president, India Cements.
“We’ll have to see the order before going in for appeal,” Raghupathy added. Apparently, the order directs the companies to cease and desist from such price hikes.
In recent times, the government has been on loggerheads with the cement industry as it perceives cartelisation by industry players.
Cement manufacturers will have to file a compliance report within eight weeks.
The inquiry into a possible cartelisation was directed at 44 cement companies and it investigated the role of CMA in fixing prices.
Announcing its order after 17 years’ judicial investigation, the commission cautioned the cement makers and CMA against repeating the unfair trade practice.
The commission directed 41 of the 44 firms not to fix prices with other players. CMA president and Shree Cement managing director H M Bangur told DNA Money from Kolkata, “We got a copy in the evening and our experts are going into it in detail. Any further course of action or response would be taken on Friday.”
However, the MRTPC rule notwithstanding, the industry is bracing for a price hike. Vinod Juneja, joint managing director, Binani Cement, said, “There is no cartelisation among cement companies.”
Juneja added that the pricing completely depends on demand-supply mismatch. Binani Cement is planning to hike prices next month by Rs 5 per bag as input costs have shot up tremendously.
“What I can say is that only 3% hike takes place in cement from April to November 2007, which is lesser when compared to inflation. Crucial inputs, such as the price of coal, have risen sharply over the year, having appreciated by 26% in October alone and sea freight rates have risen substantially too,” Bangur said.
Asked about any price hike by early next year, Bangur preferred to be non-committal. “It all depends on how things shape up in the next few months,” he said.
r_mithun@dnaindia.net
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