- Took up the issue of undue increase in prices of cement despite low demand
- Real Estate sector accounts for almost 67% of total consumption
New Delhi, Oct 09, 2015: To control the cost of construction and make home prices work for the common man, the Confederation of Real Estate Developer’s Associations of India (CREDAI) has moved the Competition Commission of India (CCI) against Cement Manufacturers who have been unduly increasing the cost of cement. CREDAI has also highlighted the violation by cement manufacturers of the Commission’s “cease and desist” order of 2012. The 2012 order of CCI had held that the cement manufacturers had formed a price cartel and were fined nearly Rs 6000 crores by the regulator.
In its submission to the Commission, CREDAI has pointed out that the cost of raw material used in manufacturing the cement has come down from January 2015 to September 2015 but cement companies never passed on this benefit to their customers. Instead, they seemed to be working together in controlling supply and prices.
CREDAI has said it is well known that the Real Estate sector is under pressure currently with a consequent decrease in cement demand. It is also estimated that housing and other real estate sectors account for nearly half of the cement demand in the country.
Despite the low demand, the prices of cement have jumped by 20-40 % in top cities pan India in the last couple of months. “It is notable that the cost of raw material for cement production has come down significantly during January, 2015 to September, 2015. It is unfair that the cement manufacturers indulge in practices that control the prices of cement. CCI has warned CMA in the past as well but it is unfortunate that they seem to be continuing with their price and market manipulation” says Mr. Getamber Anand – President, CREDAI National.
The confederation complained that there seems to be no grounds for supply restriction and the recent price increase in cement given the low demand. The confederation also brought to notice the Commission’s order dated June 20, 2012 wherein cement manufacturers were directed to ‘cease and desist’ from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. “In that order the commission had determined the penalty amount on various cement companies. However, various cement manufacturers challenged the order before the Competition Appellate Tribunal that chose to grant stay to the penalties. But the Appellate Tribunal did not find anything wrong in the order of ‘cease’ and ‘desist’ which continues to operate till date,” says CREDAI.
CREDAI has submitted to the CCI that cement manufacturers have contravened the June 20, 2012, order as the prices of all the cement manufacturers are moving in tandem leaving the customers with no choice but to succumb to the cartel. “This is quite unfortunate and not in public interest. We all want to participate in the “Housing for All” vision of the Government, but we are unable to bring down our costs of construction to a level which is affordable to the common man”.
Earlier in the month, CREDAI NCR Board at its AGM has taken the unanimous decision to stop procurement of cement from the companies which have unilaterally increased cement prices in last one month like Ultratech, Lafarge and others. All the members of CREDAI NCR have agreed to implement this ban. The decision took effect in the Delhi, NOIDA, Greater NOIDA, Gurgaon, Ghaziabad, Yamuna Expressway, Raj Nagar Extension, Faridabad, Neemrana, Bhiwadi and Adjoining areas.
Corporate Comm India (CCI Newswire)
