Top-level panel to speed up steel producers’ plans
Financial Express

To expedite the expansion plans of steel producers within the country, steel minister Ram Vilas Paswan on Monday announced setting up of a high powered committee, having representation from ministry officials, state government officials, and representatives from both public and private steel making Companies. The committee would help accelerate the process of land acquisition, raw material linkages and remove bottlenecks if any. No timeframe, however, was spelt out to set up the committee.
“I am planning to meet the Prime Minister to seek his intervention so as to see that projects worth Rs 280,000 crore fructify. Companies have already made announcements to increase the steel production to 125 million tonne by 2011-12 from about 58 million tonne currently,” Paswan said.

If the announcements were translated into physical steel making capacity within the desired time limit, it would help bridge the gap between demand and supply of the metal. The current steel consumption is growing at 13% per annum while the production grows at 7% leaving a gap of 6% per annum. The country's steel consumption as on date stands at 59 MT as against 54 MT of production.
“The instrument is likely to resolve the problems of land acquisition, iron ore linkages, and litigation over iron ore mines. Solution to these problems would ensure translation of announcements in regard to both brown field and green field expansion of the steel Companies,” executive vice-chairman and managing director Jindal Steel and Power Ltd (JSPL) Naveen Jindal said. The minister in his meeting with leading steel producers including Steel Authority of India Ltd, Tata Steel, JSW Steel Ltd, JSPL, Rashtriya Ispat Nigam Ltd, Essar and Ispat Ltd suggested the industry to park money with the Indian Railways to install railway tracks that would smoothen the movement of finished goods and raw material for the industry.

“The money could later be adjusted against the freight for the material that Companies would move utilizing those tracks,” Paswan added. When asked how much money has the steel Companies earmarked for the proposed railways tracks, industry sources said that it could be decided only after a discussion with the officials in the ministry of railways.

Cement firms set to hike prices
Business Standard

14% proposed excise duty will make bulk cement dearer by Rs 100 a tonne.

The cement companies are set to pass on the increased excise duty on bulk cement to buyers. The a valorem duty of 14 per cent introduced on bulk cement by the government in the 2008-09 Budget will translate into a hike of Rs 5 a bag of 50 kg.

HARD FACTS

• Prices of bulk cement currently are in the range of Rs 210-215 a bag
• Earlier, the excise duty on bulk cement was at a flat rate of Rs 400 a tonne
• Bulk cement constitutes less than 3 per cent of the total cement consumption in the country
• ACC, Ambuja Cements and UltraTech are the major player in the segment

This means that the bulk buyers, mainly the builders and construction companies, will have to pay more for their cement requirements. Prices of bulk cement currently are in the range of Rs 210-215 a bag. “Due to the imposition of ad-valorem duty on bulk cement, the change in prices will be Rs 100 a tonne, or a rise of Rs 5 a bag,” said H M Bangur, president of Cement Manufacturers’ Association and CMD of Shree Cement.

Earlier, the excise on bulk cement was at a flat rate of Rs 400 a tonne, which now has an additional ad valorem. Market players said that the hike would differ region to region. Unconfirmed market reports on Monday suggested that the companies had already increased the bulk cement prices. However, when senior officials of major cement companies were contacted, they ruled out the reports. “So far, I have no knowledge of any such hike,” said Bangur. Sources in ACC also denied any such rise in bulk cement prices. At present, bulk cement constitutes less than 3 per cent of the total cement consumption in the country. ACC, Ambuja Cements and UltraTech are the Major player in the bulk cement segment. Sumeet Banerjee, managing director, ACC, said, “The industry has been burdened with some more indirect taxes such as hike in Cenvat rates for clinker and bulk cement.” Pradeep Jain, chairman, Parsvanath Developers, acknowledged the fact that rise in bulk cement prices would have its impact.

“The increased cost of cement will be compensated by the removal of import duty on steel scrap and other accessories used in construction sector,” he added. However, builders in Navi Mumbai said that the rise of Rs 5 a bag would bring an additional burden of Rs 2,500 a thousand square feet. Companies in the ready mix concrete (RMC) business are also the big consumers of bulk cement. “Since RMC players do a lot of value addition, they might not see any impact of increased excise on bulk cement,” said Bangur.

Projects such as Bandra-Worli Sea Link and Pune-Mumbai express highways push up demand for bulk cement. With increased allotment on national highways, the demand for bulk cement is expected to go up in the coming years.

MRTPC pulls up ACC, Laffarge, Birla for cement price rigging
Indian Express

The stigma over the cement industry for acting as a cartel had barely started to fade that the fair trade practices body — Monopolies and Restrictive Trade Practices Commission — on Monday pulled up seven of the country’s top cement producers, including ACC, Lafarge and Grasim, for cartelisation to increase prices in tandem.
The industry had come under fire exactly a year ago when the finance minister had levied additional excise duties on the basis of retail price of the commodity. The industry had been trying to prove its innocence ever since, but Monday’s judgement is likely to put the spotlight back on unfair trade practices.

MRTPC found that the producers, through their apex industry body Cement Manufacturers Association (CMA), “acted in concert” to raise prices in Jabalpur. In its order, the commission asked the manufacturers to stop and desist from such practices, while letting off another major manufacturer — Gujarat Ambuja Cement. Issuing a cease and desist order to the manufacturers found guilty of rigging prices, it has asked them “to refrain from indulging in any sort of arrangement through the instrumentality of CMA or otherwise fixing selling price of the cement in the market.”

A three-member MRTPC bench, headed by chairman Justice O P Dwivedi, also directed the cement manufacturers to file affidavits of compliance of its order within eight weeks. The other cement producers pulled up include Parisim Cement, Larsen and Toubro, Satna Cement, Jaypee Cement, Diamond Cement and Maihar Cement.
The commission did not, however, find allegation of suspension of production satisfactorily proved as during the cross-examinations company officials gave different versions. Interestingly, CMA and some producers denied of any such meeting, but Larsen and Toubro admitted that such meeting was held.

On this the commission observed, “The respondents have made evasive and mutually contradictory statements regarding the meeting...conduct raises strong suspicion that in meeting some decisions were taken which they do not want to disclose.”
It also noticed that there was ample evidences to show that prices in December 2000 and January 2001 was Rs 30 higher than the rates in November 2000. Rejecting CMA and producers contention, MRTPC said,” cartels need not to be proved beyond reasonable doubt. According to the complaint by Cement Wholesalers Association of Jabalpur, a 50-kg bag which was sold at a price of Rs 90 in November 2000, was inflated to Rs 141 in December.

It was also alleged that on November 24, 2000, when the government under the Foreign Trade Act made Bureau of India Standard (BIS) approval mandatory for sale of cement, the producers stopped their production between November 27 to December 4, 2000, and January 12 to January 19, 2001, taking advantage of the fact that cement import could not be possible without BIS certification as importers would take some time in getting certification, they alleged.

Minutes of a CMA meeting on July 6, 2000, at Jabalpur were produced before the Commission, attended by officials of seven producers. There they decided to control the flow of cement in the market by suspending output and dispatches to dealers for five days. They had also fixed the price between Rs 107 to Rs 109. When contacted, the cement manufacturers refused to comment.

MRTPC pulls up cement companies for cartelisation
Hindustan Times

Cement companies' troubles with Monopolies and Restrictive Trade Practices Commission (MRTPC) continued with the fair trade regulator finding some of the top cement manufactures guilty of cartelisation, the second time in less than three months.

A three-member MRTPC bench, headed by chairman O P Dwivedi, found the Cement Manufacturers Association (CMA) and firms like ACC, L&T, Laffarge, Grasim and Jay Pee Cement, guilty of cartelisation while raising prices in Jabalpur in 2000 and 2001. The bench said they "acted in concert to raise the prices of cement bags" during the months of July and December in 2000, and also in January 2001 with the CMA providing a "common platform" for the purpose. "We therefore issue a 'cease and desist order'," the Bench said, directing the respondents to "refrain from indulging in any sort of arrangement through the instrumentality of CMA or otherwise for fixing selling price of the cement in the market."

It asked them to file affidavit of compliance within 8 weeks from the order, issued on February 29. Alarmingly for cement companies, the rundown with MRTPC comes just months after it pronounced many of them guilty of cartelisation in a separate parallel case, though there the order had come more than 17 years after the matter was taken up by the Commission. After the last order of December 20 last year, the cement companies knocked the doors of the Supreme Court for a reprieve, which refused any immediate stay though sparing them from filing the affidavit of compliance immediately. Senior counsel O P Dua, who represented the complainants in the present case, said they quoted two specific instances while presenting the current case before the MRTPC in 2001.

"The first were minutes of a CMA meeting held at Jabalpur in July 2000 where it was decided to hold despatch from dump as well as from factory for 5 days after which the rates were fixed at Rs 107 and Rs 109," he said. In the other instance, there was a signed letter that informed of a decision taken at a CMA meeting in January 2001 to jointly raise cement prices in some parts of Madhya Pradesh, Dua said. MRTPC asked the manufacturers not to indulge in such practices again, while letting off another major manufacturer Gujarat Ambuja Cement. Other cement producers held guilty include Parisim Cement, Satna Cement, Diamond Cement and Maihar Cement.

After the last order against the cement companies, the government had said it would look into the issue of cartelisation. "Cartelisation affects consumers, we will look into it," commerce and industry minister Kamal Nath had said.