Swiss giant Holcim’s India units and more than a dozen other cement manufacturers colluded to raise prices and restrict supplies for years, which included regularly inspecting one another to ensure there was no breach of the agreements, according to a federal antitrust probe.
The investigations arm of the Competition Commission of India (CCI) has held top leadership – CEOs or managing directors – of Holcim units ACC and Ambuja, market leader UltraTech and 17 other firms such as Shree Cement and Dalmia Cement liable for antitrust violations.
The investigation report, issued last month is the penultimate but most significant stage of the CCI probe that started in 2019. The report, which is not public, will now be reviewed by CCI’s top three officials who have powers to impose fines and will give companies a last chance to defend themselves.
Potentially, the cement giants could be fined millions of dollars. Together, the 20 companies control more than three-quarters of the over 500 million tonne installed cement capacity in India, the world’s second-largest producer after China.
The report said executives of the companies discussed coordinated price hikes in Zoom calls and in-person meetings at company guest houses, with some officials using personal mail to communicate with rivals. WhatsApp messaging was also extensively used.
Overall, the CCI investigation report concluded the cement companies colluded in 13 states in eastern and southern India, with more than 50 industry executives involved in “cartelisation” activities in an “extremely organized manner”.
The CCI report said the Cement Manufacturers Association, an industry body, “facilitated and penetrated the anti-competitive conduct in the cartel” by collating and sharing pricing details among companies. Cement companies have been accused of price-fixing for over a decade. In 2016, the CCI imposed a $800 million fine on 10 companies for fixing prices, including the Holcim units and UltraTech, but the decision has been challenged since then at the Supreme Court.
In the 2016 ruling, the CCI had said the manufacturers association helped companies collude, and ordered it to “disengage and disassociate itself from collecting” prices or production-related details. Although cement prices vary across India, CCI’s report showed they moved in the same direction.
The CCI report said cement executives decided on price increase plans down to the district level of each state, splitting companies into categories like “Group A” for large firms, and recommending lower prices for “Group B” smaller peers.
