Indian cement makers have stopped sharing their sales statistics with the industry body, Cement Manufacturers' Association (CMA), as an immediate implication of the much-hyped Competition Commission of India (CCI) order of a hefty penalty of Rs 6,300 crore last month.
Sources told Business Standard that Aditya Birla group's UltraTech, Jaiprakash Associates, Shree Cements, India Cements and Madras Cements among others have not yet provided their production and dispatches number for June. Normally, by 10th of every month CMA publishes sector's monthly numbers on its website but this time it has not.
"All those companies whose name emerged in the CCI order have abstained from sharing their monthly statistics and others too have followed the same," confirmed an official from CMA who did not wish to be named.
Swiss major Holcim's Indian companies - ACC and Ambuja Cements, were the first one to disassociate themselves from CMA back in 2009. Since then, they have been providing their statistics to the stock exchanges. Interestingly, both these companies were also in CCI's defaulters' list.
In its 20th June order, CCI had said that the cement makers should 'cease and desist' from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Further, it had stated : CMA should disengage and disassociate itself from collecting wholesale and retail prices through the member cement companies and also from circulating the details on production and dispatches of cement companies to its members.
A spokesperson of Aditya Birla group, said that the management has decided not to disclose the monthly cement numbers. The company will share statistics on a quarterly basis now onwards.
However, no disclosures have not gone well with the industry analysts. According to them, it would be difficult to track the sector in such circumstances. "How would we know the demand growth trajectory and take our calls on the companies," asks a research head of a Mumbai-based brokerage.
Agrees other experts. "Now, we would have to wait for companies' quarterly results where they would have to announce their sales numbers. So, it would now be a quarterly phenomenon than a monthly one," adds vice president of local broking firm.
Some of them even raised objections at CCI's order which asked them not to collect sales numbers too. "If such data is not provided, cement industry being a part of core sector how would government be able to come with its industrial production data," explains the research head.
Though companies are working on detail road-map to contest the competition watchdog's order, they termed the verdict unfortunate and without evidences. They argue that capacity utilisation dipped because country witnessed addition of majority of the fresh capacities during 2009-2011.
"They should have taken notice of the fact that any new (cement) plant cannot produce 100 per cent in the first two years. In the first year, the utilisation level ranges between 30-50 per cent which further graduate to 70-80 per cent in 2-3 years time-frame before going full stream," adds chief executive officer of large cement company.
Currently, India's cement sector has an overall capacity of 330 million tonne per annum. UltraTech, ACC, Ambuja, Jaiprakash, India Cements and Shree Cement control over half of the market.