ISLAMABAD: The Competition Commission of Pakistan (CCP) team on Thursday carried out a search and inspection of the All Pakistan Cement Manufacturers Association (APCMA) offices in Karachi to investigate possible anti-competitive activities by manufacturers.

Sources in the CCP said that two different teams entered and searched the offices of APCMA chairman and vice chairman located in Karachi and impounded relevant records.

The CCP had, earlier this year in May, began an enquiry in to cement sector based on information gathered through various media reports, concerns and complaints expressed regarding a concurrent increase in cement prices -- particularly during April this year.

The reports indicated that an increase ranging between Rs45-55 per cement bag was apparently collectively decided in a meeting of the cement manufacturers held under the umbrella of APCMA.

Move is part of ongoing inquiry into cartelisation

On Sept 24, the CCP conducted search and inspection of the offices of APCMA’s and senior vice chairman of the association’s executive committee, who is a senior employee of a major cement company in Lahore.

Moreover, the impounded record, including WhatsApp messages and emails, warranted conducting search and inspection in the south zone as well for obtaining evidence relating to anti-competitive practices.

Sources said that the evidence suggests possibility of a cartel arrangement between cement manufacturers.

The CCP enquiry was initiated based on several factors including lower demand of cement in the first half of 2020, parallel increase in cement prices and data collected from Pakistan Bureau Statistics and the cement companies.

The initial inquiry by the CCP stated that sudden rise in price by cement manufacturers at a time when there is low demand compared to the installed capacity of manufactures and considering that input fuel cost (coal and oil), transportation and interest rate have declined raises suspicion of a collective rise in price by cement companies.

The cement sector was penalised more than Rs6.3 billion in the past for forming a cartel and involvement in the prohibited agreements in violation of Section 04 of the Act.

In 2012, the CCP again initiated enquiry against cement companies, but it could not be proceeded and concluded due to stay order granted to cement companies by the Lahore High Court.

The APCMA could not be reached for comments despite several attempts.

Published in Dawn, November 20th, 2020