The Hindu Business Line : Cement manufacturers’ body, nine others charged with cartelisation

New Delhi, March 3 In yet another blow to cement producers, MRTPC on Monday found Cement Manufacturers Association (CMA) and nine others including ACC and Birla’s Grasim Cement, guilty of having acted in concert to raise the price of cement bags in Jabalpur (Madhya Pradesh) during 2000 and 2001, and directed them to refrain from fixing prices of cement through such ‘arrangements’ with the apex association.

The nine producers — which also include Grasim Cement, Larsen & Toubro Ltd, Lafarge Cement, Satna Cement Works, Jay Pee Cement, Diamond Cement, and Maihar Cement Industry House — have been asked to file affidavit of compliance within the next eight weeks.

The complainants – Mr Naresh Grover and Mr Sarabjit S Mokha – had alleged that they had come across minutes of a meeting held on July 5, 2000 amongst respondents (in Jabalpur) wherein the cement producers took a concerted action to fix the cement prices “artificially” and also decided to control the quantity of cement flowing in the market by suspending production and dispatches either from dump or from factory to direct dealers for five days in July 2000.

Price hike, closure

“The complainant also alleged that in the particular meeting, it was decided to hike the price of cement from July 2000 to Rs 107 and Rs 109 per bag,” Mr O.P. Dua, senior advocate for the complainant, told Business Line. In addition, taking advantage of an order requiring cement producers to register themselves with the Bureau of Indian Standard (BIS), cement producers declared closure of their factories for a specified period, resulting in reduced supply of cement and escalation in prices (by about Rs 30 per bag), the complainant alleged.

Observing that these companies had acted in concert to raise the price of cement bags in Jabalpur during the months of July and December 2000, and January 2001, the MRTPC asked them “to refrain from indulging in any sort of arrangement through the instrumentality of CMA or otherwise fixing the selling price of cement in the market.”

Earlier decision

Today’s order comes just a week after 17 cement companies including CMA went on appeal to the Supreme Court against an earlier decision of MRTPC (December 2007) on cement cartelisation.

While the earlier decision was with reference to the February-to-April 1990 period, the current MRTPC order deals with specific finding of cartelisation at a zonal level.