CCI antitrust watchdog raids Cement giants UltraTech, LafargeHolcim units: sources
As per resources, India’s antitrust body raided the office of cement giants Ultratech and, other two units of the world’s largest cement maker LafargeHolcim.
LafargeHolcim a Swiss-based which is also the world’s largest cement producer has confirmed the visit of officials to its Indian units office. The cement giant said that the company is completely cooperating with authority but refused to comment further as it is an ongoing matter.
Ambuja also issued a statement on it, “Ambuja Cements is of the firm view that it has acted and continues to act in compliance with competition laws and is fully cooperating with the investigation and providing all necessary information to the authorities. Ambuja Cements Limited has a long-standing commitment to fair competition as reflected in its Code of Business Conduct and Ethics,” it said.
Resource says that Indian company Shree Cement Ltd was also raided.
The raid was confidential in Nature and many officers of the Competition Commission of India (CCI) were involved in it. The search operation was conducted simultaneously at multiple locations and in multiple cement companies in India. However, the Competition Commission of India didn’t disclose any information regarding the raids.
India’s antitrust law, The Competition Act, 2002, promotes competition across India for the benefit of the customers. Its goal is to protect economic freedom and restrict monopoly in Trade.
The cement industry is an important part of the Indian economy and India is the second-highest producer of cement in the world. The cement industry is vital for the economy as it directly or indirectly provides employment to thousands and it attracts huge investment both from the country and foreigners.
Figures from the India Brand Equity Foundation show that In last year India accounted for more than 8% of global installed capacity. Cement production is 329 million tonnes (MT) in FY20 and it is expected to reach 381 MT by FY22 with an increase in consumption from 327 MT in FY20 to 379 MT in FY22. Cement sales in India were $9 billion in 2019-20.
India’s commerce minister Piyush Goyal had earlier said in the parliament that CCI is looking into the complaints of cartelization by cement companies.
After the news of raids on cement giants came out, cement company shares faced loss. The company’s shares fell by up to 5 percent on the BSE on profit booking. Some famous cement brands like UltraTech Cement, Ambuja Cements, ACC, Ramco Cement, Star Cement, Orient Cement, Dalmia Bharat, JK Cement, and Birla Corporation saw a downfall between 3 percent and 5 percent on the BSE in intra-day trade. The S&P BSE Sensex also saw a downfall of 0.64 percent at 45,810 points.
In the last three months, most cement companies have witnessed an upsurge of 50 percent, against an 18 percent rise in the S&P BSE Sensex. The cement companies have outperformed the market by such an increase.
In the past years, CCI has raided many foreign companies including some renowned brands’ names.
In 2019 Indian antitrust watchdog also raided beer giant Carlsberg. The CCI also raided the offices of United Breweries and Anheuser-Busch InBev as it was suspected of fixing prices by a beer cartel in India. Carlsberg, United Breweries and Anheuser-Busch InBev together comprise 90 percent of the market share in the Indian beer market. Commodities trader Glencore was also raided last year.
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