CCP raids Karachi offices of cement manufacturers’ association

ISLAMABAD: The Competition Commission of Pakistan (CCP) has seized the record of the offices of chairman and vice-chairman of the All Pakistan Cement Manufacturers Association (APCMA) during a raid in Karachi.

According to officials, the CCP has exercised its powers under Section 34 of the Competition Act 2010 as part of an inquiry launched in May this year to investigate possible anti-competitive activities by the cement manufacturers.

Two different teams entered and searched the offices of the chairman and vice chairman of APCMA-Karachi and impounded the relevant record.

The inquiry in the cement sector was started based on the information gathered through various media reports, and concerns and complaints expressed regarding a concurrent increase in cement prices, particularly during the month of April 2020.

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The reports indicated that an increase ranging between Rs45 – Rs55 per cement bag was apparently collectively decided in a meeting of the cement manufacturers held under the umbrella of APCMA.

On 24th September 2020, the CCP had also conducted search and inspection of the APCMA main office as well as the office of the senior vice chairman of APCMA’s Executive Committee (a senior employee of a major cement company in Lahore).

The impounded record, including Whatsapp messages and emails, warranted conducting search and inspection in the south zone as well for obtaining evidence relating to anticompetitive practices.

The evidence in Lahore suggested the possibility of a cartel/collusive arrangement between the cement manufacturers.

It is pertinent to mention that the cement sector has a history of collusive activities and they have been penalized in the past to an amount of collectively more than Rs6.3 billion on account of forming a cartel and involvement in the prohibited agreements in violation of Section 04 of the Act.

In 2012, the commission again initiated enquiry against cement companies, however, the same could not be proceeded and concluded due to a stay order granted to cement companies by the Lahore High Court. The current enquiry was initiated in 2020.

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2 COMMENTS

  1. I think, some kind of levy and an obligation on the Cement Manufacturers to set aside a portion of profits to invest in technical, scientific and market research functions and look at potentials globally for Pakistani Cementbased on demand and usage. Shipment of Cement in bulk to users in Pakistan would tremendously reduce costs, specially since PM(IK) has launched mass housing projects. A leaf from the books of East European countries will greatly educate Pakistani manufacturers in this regard.
    A facility to study the direction of potential fututre usage of cement in specialised areas of Harbours fishing wharfs, extreme weather usage at high altitudes, etc will help in enhancing and diversifying manufacturing activities to even look at markets overseas.
    A collaboration with CEMBUREAU, the European Cement Manufacturing Association will benefit mutually. Collaborations with major global Cement Manufacturers such as in South Korea (for instance, Ssangyong Corporation) should open new opportunities.
    Let us get out of our mindset of small people and get into big things.
    Thank you,
    With love from Canada,
    Mohammed Ali Rizvi

  2. Also research on raw materials such as Clinker and or use of blast furnace residuals could enhance strength and perhaps reduce costs as well as sourcing of specifically Pakistani raw materials . Specifically, different Manufacturing processes could be attempted to be improved upon, (wet process, dry process, or whatever) would best be a joint industrywise effort, if you are accepting a global competitive effort and challenge.😙😙

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