Credai stops cement purchases from UltraTech, Lafarge

Credai has accused the two cement firms of indulging in cartelisation and malpractices

UltraTech Cement and Lafarge India have declined to comment on the charge by a national builders’ group that they’re guilty of cartelisation.

The National Capital Region chapter of the Confederation of Real Estate Developers Association of India (Credai) made the complaint. And, the combine has said its members have been told not to buy from these two companies.

UltraTech said this was an industry issue and would not comment. An email query to Lafarge India did not elicit a response.

Credai said: "This decision has been taken to help fair price determination of key raw materials required for the realty sector.” Getambar Anand, its president, said their move was in response to the arbitrary rises in prices by cement companies.

“In one and half months, cement companies have raised prices by Rs 100 a bag (50 kg). Inflation is not increasing but these companies are going on and on. After taking advances, they have stopped supplies," he charged. “If they increase prices, how can we give affordable housing? We are talking to other companies on the pricing. If we do not find a solution, we will not mind importing from Pakistan. We want a fixed price for some time.” Credai officials say UltraTech and Lafarge did not deliver cement to its members at the decided prices, despite getting advance payment. If no change in this situation, they said, their members could go on strike and also petition the Competition Commission of India (CCI).

Builders have made these allegations earlier, too, of cement companies forming a cartel and fixing prices.

CCI had in June 2012 decided the charges had merit and penalised several of the top manufacturers, with a combined fine of nearly Rs 7,000 crore. Lafarge, UltraTech, ACC, Ambuja Cements, JK Cement, Madras Cements and India Cements were among these.

However, the companies had denied the charges and petitioned the Competition Appellate Tribunal, where the matter is still pending.

The tribunal had told the companies to deposit 10 per cent of the penalties but stayed CCI's order. The companies had petitioned the Supreme Court but the latter had refused to interfere with the interim ruling.