The Madras High Court ordered a CBI enquiry into allegations of creating an artificial scarcity of cement. On hearing the petition filed by the Class I Contractors Welfare Association on Wednesday, Justice Bhavani Subbarayan directed CBI counsel Srinivasan to ??ake notice,??conduct an enquiry and file a report on June 3.
CBI to register an FIR against nine cement companies including ACC, India Cements, Ramco Cements, Ultra Tech Cement, and Lafarge for creating artificial scarcity and increasing the price to derive gains from the public and contractors. In Tamil Nadu, a bag of cement that cost Rs 385 in July 2019 now sells at Rs 420-430. This increase in the price was not based on any increase in the cost of the manufacturing materials, it claimed.
The petition said that for unlawful gains, Cement Manufacturers??Association is continuing with their unlawful acts of creating false scarcity and increasing the price through the act of cartelisation. The price of cement is rising faster than input prices and the supply of cement to the market is controlled through a tacit agreement. The manufacturers have indulged in collusive price-fixing.
‘Cement prices may go up if input cost continues to rise’: India Cements MD N Srinivasan
N Srinivasan, Vice Chairman and Managing Director of India Cement Ltd, said that the company expects cement prices to increase if the input cost continues to rise. He said that there is improvement in demand for cement in Western and Northern Indian, where lockdown is gradually being eased.
Srinivasan said that despite the second wave, the company will stick to its capital expansion plans. He is hopeful that the lockdown restrictions will be eased by mid-June, after which pent up demand will drive sales and growth.
It is noteworthy that in the fourth quarter, the cement sector witnessed a steep hike in the prices of input materials like fuel and petroleum products. Srinivasan said that if there is an increase in the input cost, we will have to increase the price.
He further added, ?? do not think there is a need to rethink the business and expansion plan for the current financial year, which includes Rs 600 crore debt reduction unless something really drastic comes up. So our capital expenditure will continue.”
