ISLAMABAD: The Pakistan Business Competition Commission (CCP) on Thursday raided the office of the board of the All Pakistan Cement Producers Association (APCMA) in Karachi for gathering evidence of alleged cartelization through price fixing and quota allocation among APCMA members. Using its powers under Section 34 of the Competition Act 2010, the PKT, as part of an investigation launched in May 2020 to investigate possible anti-competitive activity by cement producers, conducted a search and inspection of the offices of its chairman and deputy. APCMA chairperson is located in Karachi on Thursday. Two different teams came in and searched the offices of the chairman and vice chairman and confiscated relevant records. Azam Farooq is the Chair of APCMA. Syed Noman Hassan, Vice President of APCMA, and these two offices were raided by a CCP team simultaneously to gather evidence of suspected cartelization.
Based on the CCP announcement, investigations into the cement sector were initiated based on information gathered through various media reports, and the concerns and complaints raised regarding the concurrent increase in cement prices, particularly during April 2020. The report indicates an increase in the Rs45-Rs55 range per bag of cement it was apparently decided together at a cement manufacturing meeting under the umbrella of APCMA.
On 24 September 2020, CCP conducted a search and inspection at the main office of APCMA and the office of the senior vice chairman of the APCMA executive committee, a senior employee of a large cement company in Lahore.
In addition, the confiscated records, including WhatsApp messages and emails, warrant a search and inspection of the southern zone and to obtain evidence of anti-competitive practices. Evidence suggests possible cartel / collusive arrangements between cement producers.
It is important to mention that various factors including, lower cement demand in the first two quarters of 2020, and almost parallel increases in cement prices and data collected from Pakistan’s Bureau of Statistics and cement companies form the basis of the CCP’s and previous investigations. Search.
Cement producers’ sudden price increases at a time when demand is low relative to the producer’s installed capacity and given the cost of input fuels (coal and oil), transportation and declining interest rates raises suspicion of a collective price hike. by a cement company.
Previously, in 2012, KPPU conducted an investigation into a cement company. However, the same could not be continued and ended because of the stay order given to the cement company by the Lahore High Court (LHC). The current investigation begins in 2020.